Regional LNG: FPL Group, RasGas sign HOA to supply LNG to Florida

FPL Group Resources LLC, a subsidiary of US energy giant FPL Group, Inc., and Ras Laffan Liquefied Natural Gas Company Limited (II) (RasGas (II)), a joint venture between Qatar Petroleum and ExxonMobil RasGas Inc. (an ExxonMobil affiliate), on Wednesday announced signature of a Heads of Agreement (HOA) to supply liquefied natural gas (LNG) from Qatar to a proposed LNG terminal and regasification facility located at South Riding Point on Grand Bahama Island.

Under terms of the HOA, an affiliate of FPL Group Resources and RasGas (II) have entered into an exclusive relationship and expect to complete an LNG sale and purchase agreement for approximately 800,000 million British Thermal Units (MMBtu) per day of LNG, or approximately 6 million tons per annum to be delivered over a 25-year period beginning in mid 2008.

The feed gas will come from Qatar's North Field, the largest offshore non-associated natural gas field in the world, with proven natural gas reserves in excess of 900 trillion cubic feet (tcf). FPL Group Resources plans to sell the regasified LNG to wholesale customers throughout Florida.

RasGas ventures are currently engaged in projects that are expected to deliver over 36 million tons per year to Korea, India, Europe and the US by 2011.

The HOA is subject to the FPL Group Resources affiliate successfully competing to provide regasified LNG to Florida Power & Light Company and other Florida customers and obtaining certain regulatory approvals. Florida Power & Light is expected to issue a Request for Proposals seeking a supply of gas from LNG as a new fuel source to generate electricity for its customers.

As previously announced, FPL Group Resources recently executed a precedent agreement with Seafarer Bahamas Pipeline Ltd. and Seafarer US Pipeline Inc., subsidiaries of the El Paso Corporation for transportation of regasified LNG from the proposed LNG terminal on Grand Bahama Island. (*)