CMS Energy's LNG Unit Signs Long-Term LNG Terminal Services Contract With BG Group

HOUSTON, May 17, 2001 - CMS Energy Corporation (NYSE:CMS) today announced its Trunkline LNG Company unit yesterday signed an agreement with BG Group of the United Kingdom which provides for a 22-year contract for all the current uncommitted capacity at CMS’s Lake Charles, La., liquefied natural gas terminal.

The 22-year contract, which begins in January 2002, gives BG Group the right to all of the terminal’s current uncommitted vaporization and storage capacity of approximately 5.1 billion cubic feet. The contract capacity increases to 6.3 billion cubic feet after an existing contract expires August 2005. With this transaction and other contractual commitments in place, CMS Energy estimates it has firmed up present value revenues totaling approximately $450 million from the facility.

"This long-term contract with BG solidifies CMS Trunkline LNG’s position as the U.S. leader in the LNG industry," said Christopher A. Helms, president of the CMS Panhandle Pipe Line Companies. "The agreement fulfills two of our major objectives: to maximize the value of the terminal for CMS Energy and to ensure long-term natural gas supply attachment to our pipelines.

"This contract also helps to enhance long-term natural gas supply availability for the United States as LNG plays an increasingly important role in the security of the United States’ energy supply," Helms continued.

The contract creates a significant opportunity for BG Group in the U.S. where there is a highly liquid market and gas demand is expected to increase.

Frank Chapman, chief executive of BG Group plc, said, "This agreement underpins BG’s growing reputation as The Integrated Gas Major by providing significant long-term access to the world’s largest natural gas market. The agreement reinforces our LNG portfolio and puts BG in a pivotal position to supply the U.S. natural gas market from our LNG export projects. There are major opportunities in the U.S. downstream gas market which is being targeted as a channel for LNG by a number of producers. Until today, the Lake Charles facility was the only terminal in the U.S. with significant uncommitted capacity."

BG has several options for using capacity at the Lake Charles terminal, including physical trading of LNG cargoes, using its own shipping resources and in the medium term, selling its own equity LNG production into the U.S. market.

The Lake Charles terminal, North America’s largest operating terminal, presently receives gas from five continents including Europe, Africa, Asia, South America and Australasia. Future gas imports could also come from developing or expanding LNG export projects in Angola, Egypt, Nigeria, Norway, Trinidad and Venezuela.

In 2000, there were 55 spot LNG cargoes unloaded at the CMS Trunkline LNG terminal, and it is anticipated that the level of shipments received will be higher in 2001.

BG Group plc is an integrated gas company operating in some 20 countries. In Trinidad and Tobago, along with partners, it has established itself as one of the world’s lowest cost LNG manufacturers in the Atlantic LNG plant.

It is a 26 percent shareholder in the Atlantic LNG Company that produces 3 million tons of LNG per annum for export to markets in Spain, Puerto Rico and the U.S. A further two trains are under construction to triple production to over 9 million tons a year. In addition, the partners have recently commissioned front-end engineering design work for a fourth train.

In Egypt, BG has recently signed an agreement with the Egyptian General Petroleum Corporation and Edison of Italy for an integrated LNG export project. A new company, Egyptian LNG, is being established to build, own and operate a proposed liquefaction plant with the first train due to come on stream in 2005. The U.S. is being targeted as a potential market for this export plan.

In Indonesia, BG’s reserves from exploration interests are targeted for the proposed Tangguh LNG project for both the traditional markets in Japan, Korea and Taiwan and emerging markets in the region. While in southern Italy, the Group is proposing to construct a $300 million natural gas importation terminal in Brindisi.

BG is also playing an important role in the proposed development of a LNG importation terminal in the port of Pipavav, Gujarat State, India.

CMS Panhandle Pipe Line Companies, which include Panhandle Eastern Pipe Line Company, Trunkline Gas Company and Trunkline LNG Company, operate about 10,900 miles of mainline natural gas pipeline extending from the Gulf of Mexico to the Midwest and Canada. These pipelines access the major natural gas supply regions of the Louisiana and Texas Gulf Coasts as well as the Midcontinent and Rocky Mountains. The pipelines have a combined peak day delivery capacity of 5.4 billion cubic feet per day, 88 billion cubic feet of underground storage facilities and 6.3 billion cubic feet of above ground liquid storage facilities.

CMS Energy Corporation has annual sales of more than $11 billion and assets of about $16 billion throughout the U.S. and in selected foreign markets with businesses in electric and natural gas utility operations; independent power production; natural gas pipelines, gathering, processing and storage; oil and gas exploration and production; and energy marketing, services and trading.

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