Press Release

FOR IMMEDIATE RELEASE (October 20, 2004)

Media Statement

Contact: Courtney Crager
601-664-2010

Gulf LNG Energy, LLC, Begins Process
to Build a Terminal at the Port of Pascagoula.

October 20, 2004 –Pascagoula, Mississippi – Gulf LNG Energy, LLC, of Houston, Texas (Gulf LNG) has announced it is pursuing permitting for a liquefied natural gas (LNG) receiving terminal at the Port of Pascagoula, Mississippi. The project has been designated as the “LNG Clean Energy Project” because it will regasify LNG in a facility complying with the latest environmental standards and provide clean burning natural gas to American consumers. Gulf LNG has executed an agreement with the Port of Pascagoula giving Gulf LNG the right to build the LNG terminal on lands in Bayou Casotte that are owned or controlled by the Jackson County Port Authority. Gulf LNG has completed its initial due diligence on the project site, has engaged a team of experienced engineers and environmental consultants to complete final facility design work, and is now moving forward with regulatory authorities in order to obtain all necessary permits.

The permitting process for the terminal will be overseen by the Federal Energy Regulatory Commission (FERC) and will take approximately 18 months to complete. The FERC permitting process consists of an extensive set of rigid criteria, as well as public meetings at which input from citizens will be sought.

In addition to FERC, some of the Federal and State agencies involved in the review process include: the U.S. Coast Guard; the U.S. Army Corps of Engineers; the U.S. Department of Transportation; the U.S. Environmental Protection Agency; U.S. Fish & Wildlife; the National Oceanic and Atmospheric Administration; the Mississippi Department of Environmental Quality; and the Mississippi Department of Marine Resources.

The Bayou Casotte site at the Port of Pascagoula has long been considered as an ideal location for an LNG receiving terminal. In the late 1970s, Tennessee Gas Transmission (Tenneco) extensively researched sites on the Gulf Coast for locating an LNG terminal. The results of that research demonstrated that this site in the Port of Pascagoula clearly stood out as the best location. A quarter of a century later, conditions have ripened for the development of an LNG facility at the site first identified by Tenneco.

Gulf LNG, having performed extensive due diligence, has concluded that the Bayou Casotte site remains the best location on the Gulf Coast for an LNG terminal. In addition to being remotely located, the site affords access to four major gas pipelines serving the Northeast and three gas pipelines serving Florida and the Southeast. Moreover, the site is proximate to substantial underground gas storage capacity opportunities as well as gas processing facilities. From a marine standpoint, the site is excellent in that it is easily accessible from the Bayou Casotte Ship Channel which is 42 feet deep and 350 feet wide.

Gulf LNG’s “LNG Clean Energy Project” is intended to provide an abundant and much needed long-term source of natural gas supply to consumers and industrial users in Mississippi and the entire South. In addition, it will be a major asset to local governments in attracting desirable new industry to the area dependent upon access to clean-burning, efficient, natural gas. As such, it will increase economic well-being and employment without threatening the region’s quality of life or the environment. It is for this reason that the political and business leaders in Texas and Louisiana have aggressively sought to have LNG terminals located in their states.

If approved, the estimated construction cost of the proposed facility will be approximately $450 million, and the facility, once operational, will have the capacity to process an average of one billion cubic feet of LNG per day. The project will take approximately 2 1/2 years to build after the anticipated 18-month long regulatory approval process is completed. It is estimated that up to 1,500 people could be employed in conjunction with construction of the facility. The facility is also expected to directly provide 50 local residents with long-term career positions that have average salaries in excess of the current mean wage in the area. Additional jobs will be indirectly created in order to serve the needs of the facility and its workers, and the facility will contribute to government revenues through lease payments on what is currently idle land with little prospect of other development, in addition to the normal taxes paid by business enterprises.

LNG is natural gas that has been cooled to -260°F, the point at which gas condenses to a liquid at atmospheric pressure, allowing it to be shipped and stored safely and economically. LNG is produced in countries whose natural gas reserves far exceed their own demand or ability to deliver natural gas to local markets. Currently, the demand for natural gas in North America outpaces available supplies. The LNG receiving terminal proposed for the Port of Pascagoula would help satisfy this growing demand for natural gas here in the U.S.

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