Project Update

Portland Gas plc
19 February 2008


For Immediate Release                                           19 February 2008


                                Portland Gas plc


                            Portland Project Update


The Directors of Portland Gas plc (AIM : PTG) ('Portland' or the 'Company') the
gas storage project development company would like to provide an update on the
Portland Project (the 'Project').


Preparations are being made to ensure that construction of the gas storage
facility and associated infrastructure could commence immediately upon the grant
of planning permission for the project. The construction has been tendered in
three packages. Tenders were received separately for the pipelines and
facilities during January 2008 and are currently being evaluated. Tenders for
the drilling rigs will be received during February 2008.


The current estimate for the construction cost is £500 million. NM Rothschild &
Sons were appointed in 2006 to determine the most appropriate financing
structure. Rothschild has recently launched, on behalf or Portland, a process to
select one or more joint venture partners to develop the project together with
Portland. This process would allow bidders to submit offers to fund those
development costs of the Project attributable to the bidders' interest in the
Project and in addition to fund a share of the costs otherwise attributable to
Portland. The process would form part of a Third Party Access compliant
structure under the Gas Act. The process has already seen expressions of
interest submitted to Rothschild from a number of potential joint venture
partners.


On 6 February 2008 the planning committee of Weymouth & Portland Borough Council
('WPBC') voted unanimously to support the planning application for the gas
storage facility on Portland subject to Dorset County Council ('DCC'), the
determining authority for the planning application, being satisfied with the
applications for the gas storage and other facilities associated with the
Project. Portland Gas anticipates that a decision will be made by the DCC
planning committee in the near future. The authorisation for the construction of
the pipeline infrastructure required for the project is the responsibility of
the Department of Business, Enterprise and Regulatory Reform.


For further information please contact:


Portland Gas plc
Andrew Hindle, Chief Executive Officer           020 8332 1200
Craig Gouws, Chief Financial Officer

Investor Relations - Buchanan Communications     020 7466 5000
Ben Willey

PR - Watershed                                   01308 485693
Sara Hudston

Nominated Advisor and Broker - Seymour Pierce    020 7107 8000
Jonathan Wright





Notes to Editors:


Background on Portland Gas plc


Portland's business focuses on the development of gas storage projects in the
United Kingdom and internationally. It currently has two projects in its
portfolio, the first an advanced Project at the Isle of Portland which has been
under development for over 3 years, and the second the Larne Lough project in
Northern Ireland which was announced in July 2007.


The Isle of Portland project is seeking to develop a major gas storage facility,
with the creation of 14 underground storage caverns totaling 1000 mcm (35 bcf)
of natural gas - equating to 1% of the UK's annual demand.


Portland Gas has drilled and successfully appraised the salt sequence at
Portland and is currently progressing through the planning, financing and
tendering for construction processes.


The Company is currently also evaluating the potential of a Permian salt
sequence in the Larne area of Northern Ireland to create salt gas storage
caverns. The Company has commenced an Environmental Impact Assessment for the
proposed project and has also acquired a 3D seismic programme during October and
November 2007 to define the distribution and thickness of the salt within the
area of interest. It is anticipated that the results of the seismic programme
will be known later in the first quarter 2008.


Background to gas storage


Natural gas is an extremely important source of energy, currently contributing
37 per cent of the UK's energy needs. For many years, the UK has relied heavily
on its North Sea gas fields. That resource of secure and sustainable gas flow
has limited the need to provide significant storage volumes since daily and
seasonal demands for gas have been accommodated by the flexibility of supplies
close to shore. This relative luxury is becoming less and less sustainable as
the nation becomes increasingly reliant on less flexible imported gas, the
outcome of which is that in order to maintain control of supply and demand
requirements, the need for a substantial portfolio of natural gas storage
facilities is now a national issue.


Gas storage plays an important role in managing swing demand and mitigating the
need for (expensive) emergency imports. Gas storage facilities can be filled
during times of lower demand to be available during periods of higher demand,
either on a daily basis or seasonally.


Opportunities for a safe and environmentally friendly method of storing gas are
relatively few. One of the safest and most environmentally friendly methods of
storing large quantities of gas is deep underground.


Without the construction of more storage facilities, the UK will have an
ever-increasing shortage in storage capacity as our imports, and indeed demand,
increase.




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