2001 Maritime

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November 19, 2001

Japanese export credit financing for Princess
P&O Princess Cruises plc today secured over $700 million of Japanese export credit financing.

This is the first time that Japanese export credit agencies have supported cruise ship funding.

The financing will fund the delivery of the two cruise ships currently under construction with Mitsubishi Heavy Industries Ltd in Japan. The ships, Diamond Princess and Sapphire Princess, are scheduled for delivery in 2003 and 2004. The Japanese export credit financing is secured on the two ships and is repayable over 12 years from their respective delivery.

With this additional funding, specific ship finance has now been secured on six of the eight cruise ships P&O Princess has on order, with the remaining two covered by general corporate facilities.

Nick Luff, CFO of P&O Princess Cruises commented:
"This financing provides further important support for our newbuild program, helping to maintain the group's fleet as one of the most modern in the industry. This ensures that we have a strong level of committed financing available for our capital expenditure program through to 2005. In addition, the ground-breaking involvement of the Japanese export credit institutions in cruise ship financing, further strengthens our ongoing relationship with Mitsubishi Heavy Industries.''

P& O Princess says 50% of the financing is being provided by the export credit agency JBIC, the Japanese Bank for International Cooperation, with the balance from a syndicate of commercial banks led by The Industrial Bank of Japan and Deutsche Bank. Half the commercial bank portion is in turn supported by credit insurance provided by the Japanese government agency, Nippon Export and Investment Insurance (NEXI). The JBIC funded portion will be at a fixed interest rate of CIRR (Commercial Interest Reference Rates), and below the former minimum OECD guideline rate of 8%. The commercial bank portion will be at a margin over the floating interest rate, US$ Libor. ."

Golar LNG studies conversion of ship to floating terminal
Golar LNG Ltd. has signed an agreement with an American engineering company, Merlin Production, for a feasibility study covering a floating LNG regasification terminal for the US market.

The study includes the conversion of the 125.000 m3 LNG vessel the Golar Freeze'' into a floating regasification unit, specifically looking at the following areas:

  • Technical modifications on the Golar Freeze
  • Selection of the best possible site for such a terminal
  • Ship/shore connections
  • Regulatory approvals for land and offshore installations

The study is expected to take approximately two months and is in line with Golar LNGs strategy of taking itself further into the LNG logistics chain.

EVP Sveinung Stohle commented that by using the Golar Freeze, which will become available after finishing its current charter party in April 2003, "we will effectively be able to develop a new terminal almost two years ahead of any competitor. The unit could be in place and in production by the end of 2003."

"We feel that an offshore-based terminal solves a significant number of the security and enviromental issues that recently have been raised regarding land based sites in the U.S. A floating terminal offers the unique flexibility that not only can it be removed at a later stage, but also that it can be connected to the gas grid at the most suitable place, thereby saving transportation costs and giving the best possible price for the gas. Golar LNG will do the initial study alone but will consider to bring in industrial partner(s) at a later stage. The preliminary economical calculations show that the project has robust profitability. The final profitability will depend on the cost of the conversion and the site which is selected.''

Steve Meheen, CEO of Merlin Production, stated that, "Merlin is very pleased to carry out this work for Golar LNG, since we have developed the concepts needed to make this project work. We further know the US regulatory process very well, and feel comfortable that this project will meet all necessary permits and approvals.''