EnerSea Advances CNG Projects

EnerSea Transport LLC (EnerSea) is advancing its efforts into the next phase of two international gas development and import project proposals for the Philippines and New Zealand using EnerSea's compressed natural gas (CNG) marine transport and storage systems and services. The two gas supply projects are being led by Unocal Corporation and Oil Search Limited, respectively.

EnerSea along with Oil Search and Itochu Corporation have signed a Pre- Development Agreement to perform a comprehensive feasibility study to establish the viability of a large scale CNG transportation project to ship natural gas from Papua New Guinea (PNG) to New Zealand.

The initiative seeks to develop a cost effective means for helping meet New Zealand's projected gas supply shortfall by providing supplies from Oil Search's extensive gas portfolio in PNG via EnerSea's gas carriers and systems. Itochu is participating as a project development partner with EnerSea and Oil Search.

The joint effort is being conducted with the intention of commencing front end engineering and design (FEED) for the project before the end of 2004.

EnerSea also confirmed that it is engaged in a major gas transport proposal with Unocal and EnerSea's maritime shipping partner, Kawasaki Kisen Kaisha, Ltd. ("K"Line), to supply gas to the Philippines. The project initiative was recently announced at a ceremony held in Manila that included prospective gas offtakers and Philippine Department of Energy staff.

Natural gas from Unocal's operations would be used initially to supply fuel for the Philippines' power generation needs. Additional volumes may also be accommodated in the future, as market demand increases and/or the project expands its service to supply additional Philippine markets. Commenting on the major project proposals, EnerSea Managing Director Paul Britton said, "These two opportunities reflect the steadily increasing recognition by gas developers, governments and end users of the unique value and application that CNG transport solutions can create for all shareholders in the gas chain." Katsue Yoshida, "K"Line Managing Director - Energy Transport Division, said, "With "K"Line's long history of gas transportation, we are well prepared and fully committed to contribute to the successful implementation of these CNG projects." "EnerSea is pleased to be at the forefront of the CNG evolution from the development of robust and innovative technology to project implementation," Britton continued. "These project initiatives along with our other activities in places like Atlantic Canada and elsewhere clearly signal that industry now sees CNG marine transport as a global solution ready to be applied to the stranded gas challenge. We expect to implement our US-based technology not only in international markets but also here at home where we face tremendous energy supply concerns."