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New ethane sales contract

April 7, 2003, 14:00 CEST

A 10-year contract worth some NOK 300 million per year at current prices has been secured by Statoil for supplying ethane to Borealis and Norsk Hydro.

This deal covers deliveries from the Kårstø processing complex north of Stavanger to the Noretyl ethylene plant owned jointly by the buyers at Rafnes south of Oslo.

The Kårstø complex is currently being expanded to process gas produced by Statoil’s Kristin development in the Norwegian Sea from 1 October 2005.

This expansion will also increase ethane production capacity by more than 50 per cent, from 620,000 annual tonnes to 950,000.

The NOK 500 million investment in the ethane plant is being financed by its owner, the Etanor DA partnership linking Statoil with Petoro, Hydro, Shell, ExxonMobil and ConocoPhillips.

Today’s ethane production from Kårstø is shipped in two vessels to petrochemical plants at Rafnes and Stenungsund in western Sweden.

The carriers involved are equipped to carry their cargoes at a temperature of -87°C. A third vessel will be needed to ship the additional volume.

Ethane is used as feedstock in the production of ethylene, which forms the basis for producing plastic raw materials.