Re Joint Venture

Re Joint Venture 

    LONDON--(BUSINESS WIRE)--Sept. 12, 2003--


Centrica forms joint venture to acquire offshore windfarm company

Centrica plc today announces that it has entered into a joint venture
with DONG, the Danish energy group, and Statkraft, the Norwegian power
company, to acquire Barrow Offshore Wind Limited (BOW), which has the
rights to develop a 90MW offshore electricity windfarm in the East
Irish Sea.

Centrica, DONG and Statkraft will purchase the entire share capital of
BOW from Warwick Energy Limited. Centrica will hold a 25 per cent
interest in BOW and the other two parties 37.5 per cent each.

The intention is for BOW to build 30 wind turbines off Walney Island,
near Barrow. Centrica's subsidiary British Gas Trading Limited will
take all of the electricity produced by the windfarm under a long term
power purchase agreement, together with the associated Renewable
Obligation Certificates. British Gas is the UK's biggest household
electricity supplier with more than 6 million customers.

When fully operational, the windfarm is expected to produce
approximately 320GWh per annum, or around 6 per cent of Centrica's
estimated renewables obligation by 2010.

The capital investment cost , assuming the project progresses to
completion, together with the acquisition consideration, is currently
estimated at approximately £100 million. Of this, £10 million will be
funded by a government capital grant. The shareholders expect to
contribute to the development costs from existing funds according to
their equity stakes. Centrica's share would therefore be approximately
£22.5 million.

BOW has full consents from the UK government to construct and operate
the windfarm. It is one of the largest offshore projects in the UK to
have obtained such consents and will be around 8 kilometres offshore.

Sir Roy Gardner, Centrica chief executive, said: 'This is a
significant step towards establishing British Gas as a major player in
renewables.'

He added: 'The location, near to our Morecambe Bay gas field and our
newly acquired power station at Roosecote, will allow us to leverage
our infrastructure and skills base in the area.'

Centrica indicated in July its intention was to make equity
investments of around £500 million over the next five years in
renewable generation plant. It will invest alongside skilled joint
venture partners to build around 1,000MW of capacity.

Construction of the Barrow windfarm is expected to begin in 2004
or 2005. The expected life of the asset is 20 years. Notes:

1. DONG A/S is a state owned energy company which operates
internationally in production and energy supply and associated
activities. Denmark is its primary market. DONG is an experienced
operator of offshore wind installations. It is a 30 per cent partner
in the 165MW Rodsand/Nysted offshore wind project in Denmark, which on
completion will be the world's biggest offshore windfarm. For more
information see www.dong.dk/uk/

2. Statkraft is Norway's largest producer of electric power and
Europe's second largest producer of renewable energy. It is wholly
state owned and is Norway's third largest company. For more
information see www.statkraft.com.

3. Warwick Energy is a UK-based owner and operator of energy
production assets. It operates four existing power plants and has
interests in a number of other projects under development. It has a
registered interest in the forthcoming second round offshore wind
process. For further information see www.warwickenergy.com.

4. Centrica announced on 31 July that it intended to invest with
skilled joint venture partners in approximately 1,000MW of renewable
generation assets to 2010 through a variety of different generation
schemes. Centrica expects to own approximately half of the equity
overall in such investments, at an estimated cost to the company of
around £500 million.
The intention is to meet approximately half of Centrica's renewables
obligation through such investments, with the remainder coming through
bilateral contracts with independent generators and market purchases.
For more information see www.centrica.co.uk.

5. The transaction to purchase BOW will require clearance from the EU
competition authorities prior to conclusion. Construction of the
windfarm will require a successful outcome to a geotechnical study.

6. The power from the Barrow windfarm will enter the UK network at Heysham.

7. The North West offshore region, stretching from the north Wales
coast to the Solway Firth, is one of three regions earmarked by the
government for offshore windfarms. The others are the Wash, off
Lincolnshire, and the Thames Estuary.

Centrica contacts:
Media relations: 01753 494085
Investor relations: 01753 494900.


   Short Name: Centrica PLC
   Category Code: JVE
   Sequence Number: 00009772
   Time of Receipt (offset from UTC): 20030912T074811+0100