Re Contract

National Grid Transco PLC
24 October 2003



                                                                        24/10/03


  NATIONAL GRID TRANSCO AGREES 20-YEAR CAPACITY CONTRACT FOR ISLE OF GRAIN LNG
                                    TERMINAL



National Grid Transco (NGT) today announced that it had agreed a 20 year
contract for the sale of the initial capacity at the Isle of Grain Liquefied
Natural Gas (LNG) importation terminal with BP / Sonatrach.

Grain LNG, a subsidiary of NGT, will own and operate the terminal, which is
scheduled for commissioning at the beginning of 2005, with commercial operations
expected to commence shortly thereafter. This first contract for the use of
Grain LNG's capacity represents around 5% of the UK's gas demand.

It will be the first of the new LNG import terminals, constructed to contribute
flexibly to Britain's growing dependence on a diversity of gas import schemes.
Located on the River Medway, 20 miles east of central London, it is close to the
heart of the gas market and some important gas-fired power stations.

The contract will enable BP / Sonatrach to import 3.3 million tonnes of LNG per
annum through the terminal over the next two decades. This equates to an
additional 12 million cubic metres of gas entering the National Transmission
System every day or 4.4 billion cubic metres per annum.

As UK offshore production declines, Government and industry forecasts recognise
the need to secure long-term gas imports. LNG imports will also add to the
diversity of gas supply and enable gas to be released into the system quickly to
meet demand requirements.

NGT Group Director, Edward Astle said ' Following the competitive process, we
are delighted to award this initial capacity to BP / Sonatrach, both of whom
have significant expertise and experience in the LNG business. This deal is an
important milestone in the development in the UK LNG market and National Grid
Transco is taking a lead in helping to address the UK's long-term energy needs.

'Our Grain terminal will provide the first imported LNG into the UK for over 20
years, with scope for future expansion. It will be a high quality facility with
considerable capacity to provide a new source of gas to homes and industry in
the UK and South-East.'

                              • ENDS -



Enquiries:

Investors:

Marcy Reed [phone] [phone](m)

Terry McCormick [phone] [phone](m)

Louise Clamp [phone] [phone](m)

Media:

Christine Riches [phone]          

Geoff Aspel [phone]

Gillian Home [phone]

Media out of hours duty pager: + 44 (0) 7659 117841

Citigate Dewe Rogerson: [phone]

Anthony Carlisle [phone](m)

BP

Colum Doyle, [phone]      Ronnie Chappell, [phone]

Notes to Editors:

  • Picture of terminal available on request.
  • The existing facilities at the Isle of Grain were constructed in 1982. In
    April 2003 planning permission was granted by Medway Council to convert the
    site into a LNG importation facility.
  • LNG is natural gas liquefied by refrigeration to a temperature of


        -160C, a process that reduces its volume to 1/600th of that at normal
        temperature, and enables bulk transportation by tanker.

  • Britain's gas demand is projected to increase by at least 15 per cent in
    the next ten years. As production from North Sea gas fields declines,
    dependence on gas imports is forecast to approach 50 per cent within the
    same period. To import this gas, analysis by Transco as part of its annual
    public consultation on gas supply and demand indicates that three more gas
    import pipelines, LNG terminals, or a combination of these, will be
    required.
  • National Grid Transco plc is a leading international energy delivery
    business. Formed in October 2002, following the merger between National Grid
    Group and Lattice Group, it is the largest utility in the UK. Through
    National Grid, the group owns and operates the electricity transmission
    network in England and Wales, and through Transco, it owns and operates
    Britain's gas transportation network. National Grid USA is one of the top
    ten electricity companies in the US, with the largest electricity
    transmission and distribution network in the New England/New York market
  • BP is one of the world's largest energy companies. It produces some 9
    billion cubic feet per day of gas and markets over 22 billion cubic feet per
    day to 28 countries around the globe. BP has global gas reserves of c. 43
    trillion cubic feet and is the largest producer of natural gas in the United
    States and the United Kingdom. BP is currently involved in four major
    liquefaction plants in Trinidad & Tobago, Abu Dhabi, Australia and
    Indonesia, which together accounted for over 30% of 2002 global LNG sales.
    BP's merchant LNG activities markets and trades gas from a range of sources
    around the globe to secure customers and markets and maximize the value of
    BP's own gas developments.
  • Sonatrach is the second largest LNG producer in the world (27bcma in 2002)
    and the third largest exporter of natural gas with a turnover above $20bn.
    It has been successfully involved in LNG for 40 years and was the first to
    bring LNG to the UK in 1965. Through its subsidiaries, joint ventures and
    strategic partnerships Sonatrach has embarked on a campaign to
    internationalise its upstream and downstream operations and diversify its
    markets for gas.



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