BG set to reveal India gas deal

OIL GIANT BG Group is today expected to announce a deal that will see it expand its liquefied natural gas (LNG) footprint in India.

It is understood that the London-listed explorer will ink a long-term contract, worth as much as $20bn (£13bn) depending on the market price, to supply LNG to the Indian state of Gujarat.

It will follow similar contracts that BG Group signed with CNOOC of China and Japan’s Tokyo Gas in 2010 and 2011 respectively.

It marks the first LNG deal of its kind for the explorer in the Asian country.

Last October, BG Group sold its interest in India’s Gujarat Gas Company for £293m, as part of the firm’s disposal programme to enable it to channel resources into more lucrative upstream oil and gas production projects.

Last month, BG Group spooked investors as it said it would not hit its 2015 production target of more than 1m barrels of oil equivalent per day.

New chief executive Chris Finlayson – appointed in December – said its production guidance for this year would be between 630,000 and 660,000 barrels of oil a day.

BG and Norwegian firm Statoil plan to build a $10bn east African liquefied natural gas terminal well placed for exports to Asia, after the Statoil made a new find off the coast of Tanzania.