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Expansion of Cove Point terminal approved

June 16, 2006, 12:35 CEST

The US Federal Energy Regulatory Commission (FERC) approved on 15 June the application for expansion of the re-gasification capacity for liquefied natural gas (LNG) at the Dominion Cove Point terminal, on the US east coast, where Statoil has a long-term lease agreement.

Statoil is looking forward to studying the particulars of the FERC approval order, which is expected to be released within the next few days.

In June 2004, Statoil signed agreements with the owner of the Cove Point terminal, the US company Cove Point LNG, LP (Dominion), which will enable Statoil to quadruple its capacity at the Dominion Cove Point terminal from the current 2.4 billion cubic metres per year to 10 billion (or 250,000/Dth/d to approximately 1.1 Bcf/d). As part of the expansion, Statoil also reached an agreement to purchase expanded pipeline transportation and storage services.

“The approval received by Dominion from FERC is an important milestone in the efforts to increase Statoil's capacity at the terminal, and the expansion project is on track towards Dominion's expected start-up in the second half of 2008,” says Kurt Georgsen, vice president for the US gas unit in Statoil’s Natural Gas business area.

According to Mr Georgsen, the expansion reflects the group’s considerable focus on the strongly growing liquefied natural gas market in the USA, at the same time as market access through Cove Point is strategically important to Snøhvit and other LNG projects under consideration by Statoil.

Statoil’s capacity at the terminal is today filled with gas from various shippers. When the Snøhvit field in the Barents Sea comes on stream at the end of 2007, the Snøhvit sellers will deliver gas to the terminal and further into a robust gas market in the north-eastern parts of the USA.