Signing of a Letter of Intent regarding the construction of the Maritime Gas Terminal in the Port of Gdansk

20.02.2006

On Thursday, 16 February 2006, at the head office of the Port of Gdansk Authority SA, a Letter of Intent was signed regarding the cooperation on developing the construction project of the Maritime LNG Terminal in the Port of Gdansk. Signatories of the Letter included: on behalf of the Port of Gdansk Authority SA - Andrzej Kasprzak, President of the Board and Ryszard Wocial, Director of Development and Infrastructure, and on behalf of Polish Oil and Gas Company - Michal Nowicki, Assistant Director for Investments and Jerzy Kurella, Assistant Director of Legal Department. The Letter was signed in the presence of Piotr Olowski, Governor of Pomerania and Pawel Adamowicz, City Mayor of Gdansk.

The signing of the Letter of Intent constitutes a closure of the preliminary work performed hitherto ahead of the construction of the Maritime LNG Terminal. The Letter aims to enhance the work focused on the choice of Terminal location. On 8 February this year, Polish Oil and Gas Company signed a similar letter with the Authority of Szczecin and Swinoujscie Seaports SA. Swinoujscie provides an alternative location for the Maritime LNG Terminal.

Polish Oil and Gas Company is currently holding negotiations with consortiums that applied to develop "A Feasibility and Technical/ Economic Study of LNG Imports to Poland". Upon completion of the negotiations, it will be possible to appoint a contractor and launch the work. Completion of the Study is expected yet this year.

Basic technological guidelines of the Maritime Gas Terminal

• Throughput capacity of the Terminal: 3-5 billion m3 of natural gas per year
• Construction of two tanks with a capacity of approx. 100 thou. m3 each
• Cost of the investment: approx. EUR 400 billion (possible construction of ships not included) - the final amount to be determined as per the selected option and location as well as acc. to the investor's decision
• Cost of connecting to the system: EUR 30-100 million (as per the selected location)
• Construction and operation of the Terminal is likely to involve the construction of a minimum of three ships designed to carry liquefied gas, so-called methane carriers. It is possible that the construction thereof be commissioned at the Polish shipyards
• Anticipated sources of supply: Algeria, Egypt, Libya, Nigeria, Norway, Qatar

Project schedule

• A tender announced by Polish Oil and Gas Company is currently under way, aimed to appoint a consortium that will develop "A Feasibility and Technical/ Economic Study of LNG Imports to Poland"
• Completion of Feasibility Study - 4th quarter of 2006
• Phase of designing and obtaining permits - 2006/ 2007
• Construction of the Terminal - 2007-2010
• Launch of the Terminal operation - end of 2010