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Kvaerner Masa-Yards Breaks the Ice in Russia

Maritime Activity Reports, Inc.

September 5, 2003

Subsequent to evaluation by ExxonMobil, operator of the Sakhalin-1 project in Russia, Kvaerner Masa-Yards Inc., Finland, and Far-Eastern Shipping Company PLC (FESCO), Russia, have signed contracts for the design and construction of two icebreaking stand-by and supply vessels for the Sakhalin-1 project. The contracts are still subject to approval by the Central Bank of Russia and to issues related to post-delivery financing.

With the contract for the second ship to be confirmed by early November 2003, both Kvaerner Masa-Yards and FESCO have agreed not to publish the value of either of the contracts at this stage. The contracts will not be recorded to Kvaerner Masa-Yards' order reserve until all approvals and financing have been confirmed.

The vessels, which will measure (o.a.) 328 ft. (100 m) and a 4,000 dwt, are due for delivery in 2005 and will be operating in the harsh Okhotsk Sea environment in the Sakhalin area in Far-East Russia. Their shaft power is 13 MW and they will each be fitted with two azimuthing rudder propellers.

These ships are based on the "double-acting" concept for icebreakers, which was developed by the Arctic Technology Centre (MARC), part of Kvaerner Masa-Yards Inc. The "double-acting" concept has now become an industry standard. In this concept the vessel meets the most difficult ice conditions moving with the ship's stern first, using azimuthing electric propulsion. By this, less power is needed and the ship's bow can be optimized for efficient open water operation. The operating conditions in the Sakhalin area are demanding with freezing temperatures down to -40°C and difficult ice conditions with ice ridges up to 20 m deep and solid ice exceeding 1.5 m in thickness.

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