Differential operators and the loop group via chiral algebras

Let $G$ be an algebraic group and let $\widetilde{\mathfrak g}$ be the corresponding affine algebra on some level. Consider the induced module V:=Ind^{\widetilde{\mathfrak g}}_{{\mathfrak g}[[t]](O_{G[[t]]}), where $O_{G[[t]]}$ is the ring of regular functions on the group $G[[t]]$. In this paper we show that $V$ is naturally a vertex operator algebra, which is "responsible" for D-modules on the loop group $G((t))$. Using the techiques of VOA we show that $V$ is in fact a bimodule over the affine algebra. In addition, we show that $V$ possesses a remarkable property related to its BRST reduction with respect to $\widetilde{\mathfrak g}$. This paper has a considerable intersection with a recent preprint of Gorbunov, Malikov and Schechtman.