BW Gas Limited (the “Company”, “BW Gas”) has entered into a share sale and
purchase agreement to effectively acquire four LNG vessels (built 2006-2008)
from World Nordic SE, the principal shareholder of the Company (the “Seller”)
for a total consideration of USD 720 million (the “Acquisition”).

The shares of Bergesen LNG Limited, the company owning the four LNG
vessels, will be transferred to BW Gas as a contribution in kind and BW Gas
will pay the consideration by issuing 273,577,019 new shares (NOK 18.5 per
share) to the Seller. Bergesen LNG Limited and its assets are being
transferred on a debt free basis.

BW Gas intends to offer its shareholders other than the Seller transferable
rights to subscribe for new shares at the same price terms as in the
Acquisition (NOK 18.5 per share), aiming to raise up to NOK 1,581 million
(the “Offering”). The purpose of the Offering is to provide the eligible minority
shareholders with the possibility to maintain their proportionate ownership
in the Company on the same level as before the acquisition of the LNG
vessels. The Company currently expects the Offering to take place before
the end of the first quarter 2009. The Acquisition is expected to be completed
simultaneously with the Offering.

The Seller will receive an underwriting commission equal to 2% of the
Acquisition value in consideration of the Seller’s commitment to subscribe
for the new shares. The Company will offer other major shareholders the
opportunity to commit by Friday 30 January 17:30 CET to participate in
the Offering at similar terms in an underwriting syndicate for the Offering.

The Acquisition and the Offering are subject to an approval by the special
general meeting of shareholders of BW Gas that is scheduled to be held
26 February 2009. The special general meeting will be held at the
following location: Clarendon House, 2 Church Street, Hamilton HM11,
Bermuda.

“We are very pleased to add the LNG vessels to our fleet, thereby
strengthening our financial position through the acquisition of assets
which are complementary to our portfolio and relevant to our core
operating capabilities. The subsequent offering will improve our
financial capacity further. Not only do the transactions bring BW Gas
into a comfortable position in relation to the requirements under the
financing agreements of the Company, but they also put us in a
position to target value enhancing investments in shipping markets
where opportunities caused by distress are likely to occur,” says
CEO Jan Håkon Pettersen.

Background and details for the Acquisition and the Offering
The decision to strengthen the financial position of the Company has
been made to create increased headroom against the financial
covenants under the Company’s debt financing agreements and to
increase commercial flexibility following the changes in the Norwegian
tonnage tax regime in 2007, the recent turbulence in the shipping and
financial markets and the risk of continued volatility in the mentioned
markets.

Details of the Acquisition include that World Nordic SE will transfer
all the shares in its wholly owned company Bergesen LNG Limited,
owning the four modern LNG vessels through single purpose ship
owning companies, to BW Gas in exchange for 273,577,019 number
of new shares in BW Gas at NOK 18.5 per share. Bergesen LNG
Limited is valued at USD 720 million in the Acquisition and
carries no debt. The valuation is based on an independent ship
broker’s assessments. All four vessels are fixed on 20.5 year time-
charter contracts to Nigeria LNG Limited and are state of the art,
modern vessels built in 2006, 2007, 2007 and 2008 respectively.

The Company has managed these vessels for a fee since their
respective delivery dates.

Bergesen LNG Limited does not have any employees and its only
assets are the shares in four shipowning companies, Bergesen
LNG VIII Ltd, Bergesen LNG IX Ltd, Bergesen X Ltd and Bergesen XI
Ltd, each of which owns one LNG vessel. The board of directors
of Bergesen LNG Limited currently consists of Andreas Sohmen-Pao,
Lui Pak Ming Clarence, and Michael G. Smyth. Below is a summary
of key financial information for Bergesen LNG Limited for the
financial periods ending 30 November 2008 and 31 December
2007, 2006 and 2005 respectively (source: www.maritimeandenergy.com).

Tangguh Jaya is one of a fleet of seven LNG carriers being built in Korea for the carriage of LNG from the new Tangguh LNG export plant in Indonesia’s Papua province for carriage to customers in China, Korea and the west coast of North America. Jaya is the name of a mountain in Papua. The seven-ship fleet comprises two 145,700m3 LNG carriers built by Daewoo Shipbuilding & Marine Engineering for Sovcomflot/NYK, two 155,000m3 vessels from Hyundai Heavy Industries for Teekay and three 155,000m3 ships from SHI for K Line. The LNG carriers are being delivered over the November 2008-May 2009 period and Indonesian shipping lines hold minority stakes in the vessels. The Tangguh LNG plant is scheduled to commence operations in the second quarter of 2009.

There are a further 89 LNG carriers on order worldwide for delivery through 2011, according to LNG World Shipping. The pace of LNG carrier ordering has slowed in recent years due to delays in final investment decisions for further new LNG export projects. As a result, the pace of LNG carrier construction that has taken place over the last 30 months is unlikely to be equalled for some considerable time.

The global LNGC fleet has experienced a period of not only rapid growth, but also change. For example, while Maersk Qatar is powered by a steam turbine propulsion system traditionally favoured by LNG carrier owners, Tangguh Jaya has a dual-fuel diesel-electric propulsion (DFDE) system. The vast majority of conventional size LNG carriers ordered during the past three years have been specified with DFDE systems (source: shippingtimes.co.uk).

The recent completion of the world’s first Q-Max LNG carrier, named ‘Mozah,’ marks a step change in LNG shipping by reducing transportation cost, while improving energy efficiency and reducing emissions. The innovative Q-Max ships carry up to 80 percent more cargo, yet require approximately 40 percent less energy per unit of cargo than conventional LNG carriers due to economies of scale and efficiency of the engines.

“The Q-Max carriers break the LNG shipping mold in nearly every way,” said Neil Duffin, President, ExxonMobil Development Company. “The same technology capability that drove us to develop a new class of LNG carrier is driving innovation in all aspects of the LNG value chain.”

The large LNG ship technologies, developed in conjunction with joint venture partner Qatar Petroleum, include a number of industry breakthroughs and significant enhancements, including increased ship size, onboard reliquefaction units, slow-speed diesel engines, twin propellers and rudders, largest ship-board LNG tanks ever built, the latest in hull antifouling protection and improved fire-protection systems. The end result of these new generation ships is a 20-30 percent reduction in transportation cost.

“Qatar Petroleum, with ExxonMobil, led a major technical effort to enable this groundbreaking enhancement in the LNG shipping industry,” said Mr. Faisal Al Suwaidi, Qatargas Chief Executive Officer. “Shipping is a critical link in the LNG value chain that extends from Qatar’s North Field, the largest non-associated gas field in the world with recoverable resources of more than 900 trillion cubic feet, to homes in Asia, Europe, and the Americas. With our innovative technology, we have effectively transformed the LNG business and opened up more of the world for Qatar LNG,” said Al Suwaidi. Qatar Petroleum and ExxonMobil are shareholders in a Qatar joint venture, Qatargas, that will charter the Mozah and five other Q-Max carriers to supply LNG from new liquefaction trains in Qatar.

For more than 30 years the size of LNG ships remained virtually unchanged with capacity of about 140,000 cubic meters. Qatar Petroleum and ExxonMobil’s ship operators, hydrodynamicists, naval architects and structural engineers worked closely to develop and rigorously test the larger Q-Max cargo tank designs. Comprehensive evaluation of cargo sloshing was performed to prove that the larger systems were feasible and reliable. The resulting Q-Max carriers are longer than three football fields, tower twenty stories tall from keel to masthead and are equipped with the largest membrane containment tanks ever built. With a total capacity of up to 266,000 cubic meters, each ship carries enough natural gas to meet the energy needs of 70,000 U.S. homes for one year.

In addition to increasing the size of the ship, a major initiative was undertaken to design, test and implement the on-board reliquefaction plant that re-liquefies natural gas that is vaporized during transit, re-injecting it as liquid into the cargo tanks rather than using it as vaporized gas to power the tanker itself – allowing for delivery of nearly 100 percent of the cargo. This is particularly beneficial for the long-haul voyages from Qatar to Europe and the Americas. The on-board reliquefaction facilities created an opportunity to shift from steam boilers and turbines used for propulsion by conventional LNG ships to highly efficient slow-speed diesel engines. The Q-Max ships are equipped with two diesel engines driving twin propellers and rudders. This leads to more energy efficient, reliable and maneuverable ships, reducing fuel consumption by up to one-third.

Recognized by industry veterans as a pioneer in LNG production and technology innovation, ExxonMobil’s joint ventures in Qatar will see the advent of more industry firsts over the next 18 months. In addition to pioneering the industry’s largest vessels to carry LNG to market, ExxonMobil in partnership with Qatar Petroleum is employing new technology in Qatar to build four of the largest LNG production facilities in the world and is participating in the development of LNG regasification terminal projects in Italy, UK and the US (source: marinenorway.no).

MISC owns the world’s single-largest LNG fleet of about 27 tankers and would receive two more tankers costing between US$220mil and US$230mil each in the current financial year ending March 31, 2009 (FY09).

The company’s oil and gas (O&G) engineering arm, Malaysian Marine and Heavy Engineering (MMHE), would also be able to grow revenue and profit in the next two years due to contracts it won worth RM1.17bil from Petronas Carigali.

An analyst with a local research house said the contracts raised MMHE’s fabrication order book by 32% to RM4.9bil as at the end of June 2008 from RM3.7bil.

These contracts together with contracts worth RM328mil in marine conversion and RM306mil in marine repair jobs would bring the company’s total order book to RM5.5bil.

As Petronas holds 62.44% equity in MISC, MMHE should continue to land contracts from the oil company, the report said.

Also, the reverse takeover of Ramunia by MISC via the injection of MMHE is set to be completed by January 31, and would double the fabrication yard capacity and improve the long-term prospects of the business.

The offshore and heavy engineering units combined contributed 18% to MISC’s pre-tax profit of RM2.6bil in FY08.

However, even though the LNG transportation and O&G business segments have positive outlooks, the analyst said MISC’s net profit forecast for FY09 would still have a marginal reduction to RM2.04bil compared to RM2.43bil in FY08 (source: thestar.com.my).

The survey was undertaken by undertaken by international shipping recruiter Faststream whose managing director Mark Charman said that 58% of the respondents agreed that recruitment was a big challenge. He said: “Vacancy levels in the shore-based LNG sector are at a record high and we forecast them to continue growing. Employers face competition for talent not only from direct competitors, but also banks and power companies who need people with specialist marine engineering know-how.”

Competition for those with seafaring LNG experience was “fierce” and that rising salaries at sea were setting expectations ashore. He added: “The ongoing uncertainty driven by the credit crunch has led to candidates being much less willing to take a chance and relocate to a new company. The promise of large bonuses is failing to attract candidates, with base salary a far more important factor.”

Mr Charman advised LNG shipping companies and terminal operators to change their attitude to recruitment strategies and to take a lead from other industries when seeking to hire top talent in a candidate short market (source: mglobal.com)