Full sail for the gas age

FRANK Chapman is obsessed by gas, evangelical for the stuff. Now you would expect the chief executive of BG Group, which provides the country with almost 25% of its gas, to be keen on the product. But Chapman, a wiry man with a charming smile, seems almost to worship it.

At his high-tech office in Jermyn Street, just off Piccadilly in central London, the only thing missing seems to be a gas pipeline.

He declares: 'You know, we have had the age of peat, we have had the age of coal, we have just had the age of oil - and now we are in the gas age.'

It would seem picky to quibble with a man so enthused by his product, but even by his own admission, gas fuels just 37% of our energy needs. And by the end of the decade, it will still account for only 42%.

But unlike even the most hardline nuclear enthusiasts who accept the need for a diversity of energy sources - gas, wind, coal and oil - Chapman, 51, will have none of it.

He says bluntly: 'I do not subscribe to the view that we have to have alternative fuel types.'

Yes, he believes in diversity, but only in the number of sources of gas supply. And as it happens, Britain is in the happy position of having 70% of the world's gas on its doorstep in terms of realistic supply routes.

Even when Russian gas giant Gazprom popped up in London last week to unveil plans to supply the UK with ten% of its gas by 2010, the announcement was welcomed as further proof that Britain will become a country powered by the stuff.

So when you go face-to-face with Mr Gas, there are two questions that millions of users would like answered.

First, with two huge price rises looming for consumers and even larger ones for industry, are there any more in the pipeline?

The answer is that gas has never been cheaper in real terms and Chapman predicts that prices will be even cheaper in the long run as oil prices come down.

But he adds: 'We have been very poor at predicting prices.'

Second, will the lights and heat stay on even if we have Siberian conditions this winter?

The answer is more cagey. He doubts that gas heating will fail, but acknowledges that the chances are higher over the next two years before all the storage tanks, pipelines and interconnectors are up and running.

But whichever way you look at it, BG seems to be a company in the right place at the right time.

The company was spun out of British Gas - the retail side became Centrica and the pipeline business became Transco. It is the UK's biggest supplier of gas with vast reserves not only in the North Sea, but also in Norway, Algeria, Mauritania and Kazakhstan.

The company is also busy turning its Indian and Brazilian businesses into new powerhouses.

Chapman's success means he is probably right to boast that we are heading for a gas age.

In the four years Chapman has been in charge, he has seen the company grow from a turnover of £652m to £1.09bn, while the value of the company has jumped from £9.2bn to £12.48bn.

Chapman believes that gas reserves will last for roughly 60 years, even taking account of the present dramatic growth in demand. And with Britain and the US becoming gas importers, BG is poised to expand its market share.

BG is now the fourth-biggest gas producer in the world and is on track to become the largest producer of liquefied natural gas supplied to America.

While Chapman has quietly been turning BG into a multi-billion pound business, it seems to spend most of its time fending off rumours that it is the latest bid target for Shell or Centrica.

But Chapman pays no attention to the rumours and is focused on hitting targets for the next decade. And one senses he is a man who will achieve what he sets out to do.

He was formerly a highflyer at Shell, and he gets up at 5am three days a week to exercise at the BG gym and starts work early so he can be home at 5pm to see his three young children.

But his targets are not just gasrelated. His other obsession is sailing and his computer is linked to BG Spirit, the yacht BG sponsors for the 2004 Global Challenge. His first task each morning is to check where it is in the race.

While no-one could dispute that Chapman earns his £1.2m pay package, he does make room in his busy life for other interests - like a holiday home near Bergen where he spends time with his Norwegian wife, Kari.