In three short years BG Group Plc has become a leader in the liquefied natural gas (LNG) market, and company executives didn't make it happen by thinking like oilmen, according to Frank Chapman, chief executive of the London-based integrated energy company. "The oilman's mindset is to find the assets first, then think about the potential market," Chapman said at a recent industry luncheon in Houston. "We start at the opposite end, by evaluating the market first. When we find hydrocarbons, we already know where they need to go. This allows us to move much faster in our business, and in the process of connecting markets to supply, we have the skills to participate anywhere along the chain." BG operates in more than 20 countries in E&P, LNG, and power transmission and distribution. In 2004 the company supplied 41% of U.S. LNG imports. Its liquefaction project in Trinidad is expected to be completed this year while its Egyptian project was completed ahead of schedule, and the Phase 1 expansion of the Lake Charles, Louisiana, plant is on track for completion in fourth-quarter 2005. "It's important to understand that LNG terminals are not a business, they're gateways," Chapman said. "We're in supply markets and terminals are certainly an element of that business, but the value is in the resource. The real question is, will enough terminals be built to handle supply and meet the needs of the markets?" Martin Houston, executive vice president and managing director, North America, Caribbean, and global LNG, added, "It's likely that between four and seven LNG terminals will get built by the end of the decade, and it's becoming clear that the Gulf will be the focal point for it." As BG has rapidly increased its value in a very short time, the rumor mills have been abuzz with talk of BG as one of the next big takeover targets. "Our asset value has quadrupled over the years and is now around $28 billion," Chapman said. "To have our assets admired is a compliment, and the only real defense is to keep delivering. The market needs to decide which would be better: to let BG keep doing what it's doing or to have someone else come in and possibly take things in another direction. "It's not for us to decide. We just keep being about the business of being a great company."
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