Statoil Orders LNG Carrier for Snoehvit

Leif Hoegh and Mitsui O.S.K. Lines, have entered an agreement with Mitsubishi Heavy Industries, Ltd., for the construction of a 145,000 cubic meter LNG carrier. An agreement was also made with Statoil on behalf of the Snoehvit field partners (excluding TotalfinaElf and Gaz de France) for the chartering of the vessel for 20 years plus two 5- year options. The vessel specification is high both for operation in North Atlantic waters and to meet strict safety and environmental requirements. Upon its delivery in 2005, the vessel, which will be built based on the Moss Rosenberg spherical tank design, will be the largest ever built and have a delivery cost at approximately $190 million The vessel will primarily be employed for the transportation of LNG under gas sales agreements entered into with El Paso in the U.S. and Iberdrola in Spain. The vessel is expected to be operated by Leif Hoegh Ltd., and as the bareboat charter it will be financed through a U.K. lease. Statoil will take an owning interest in the joint venture company.