LPG & PETROCHEMICAL TRANSPORTATION LPG & PETROCHEMICAL TRANSPORTATION -- WORLD WIDEWORLD WIDE

NGC Fleet Management

A Quality & Safety Approach

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27 March 2000

The transportation of petrochemical gasses is a highly specialised and severely demanding sector of the shipping industry. It involves dealing with the hazards of liquefied gas namely, high pressure, low temperature, flammability, toxicity and reactivity.

Apart from the strict regulations governing the gas carriers’ physical construction, strict maintenance schedules, product handling knowledge and safety routines form significant aspects of NGC’s fleet management strategy.

Transportation of Gas

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27 March 2000

Construction

The Tanks ...

are not an integral part of the hull. Instead they are installed and stored in cribs placed in the holds of the hull, so-called void spaces. They are constructed from special steel alloys to ensure the strength of the tanks under variable pressure and temperature.

The Norgas Discoverer, Norgas Voyager, Norgas Pioneer & Norgas Energy are fitted with tanks made of solid stainless steel.

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27 March 2000

Construction

The Hull …,

all vessels have double bottoms which many modern tankers today have. The ballast tanks and void spaces are protected against corrosion according to the most advanced principles. The ships’ paint and coating systems are maintained on a regular basis to avoid harmful corrosion, and often void spaces are kept pressurised by means of dried air or inert gas.

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27 March 2000

Maintenance

Advanced constructions demand strict maintenance routines. Regulations governing the maintenance of gas ships are comprehensive and demanding.

The average age of the NGC fleet today is a long way from its dedicated 30 years life-cycle. In addition, owing to continuous upgrading and follow up on inspection findings, the NGC fleet has been kept spick and span.

For instance, the two oldest vessels, the Norgas Discoverer (built 1971) and Norgas Voyager (built 1972), were both extensively rebuilt and upgraded in 1990, and then again in 1995/96. They are now in a condition for a life-cycle up to 35 years.

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27 March 2000

The two sister vessels, Norgas Sailor and Norgas Pilot have beenundergoing an extensive upgrading programme whereby new insulation measuring 200mm has been installed onto their cargo tanks. This is an increase of 60mm from the original insulation thickness. This has reduced the ingress of heat dramatically. The Norgas Pilot has also had an upgrading of her cooling plant which has increased her cooling efficiency by up to 15%. This has been achieved by mounting an intermediate cooler and cargo chiller.

On the Norgas Carine, Norgas Traveller and Norgas Trader, deck tanks have been mounted to take care of the cargo heel when switching between two different grades. This has gained us tremendous flexibility in our trade pattern, not to mention time saved during the purging and gassing up processes.

Upgrading and Improvements

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27 March 2000

Maintenance - Industry standardsThe fleet is regularly vetted by inspectors accredited by the Chemical Distributors Institute (CDI) and the Oil Companies International Marine Forum (OCIMF).

CompanyNorgas Carine

Norgas Challenger

Norgas Chief

Norgas Discoverer

Norgas Energy

Norgas Navigator

Norgas Patricia

Norgas Pilot

Norgas Pioneer

Norgas Sailor

Norgas Trader

Norgas Traveller

Norgas Victory

Norgas Voyager

Arco/Lyondell 4 8/18/99 2/22/98

BP 4 1/13/00 12/24/00 5/29/01 7/5/00 4/10/00 2/3/00 12/27/99 9/13/00 1/26/97 8/9/99 7/6/00 7/25/01 6/25/00 2/18/00

Chevron 4 4/26/00 8/30/98 3/31/99 5/31/99

Dow 4

Elf 4 12/3/94 3/5/99 6/29/95 10/16/99

Exxon (SMS) 4 3/18/00 6/11/00 6/1/00 12/10/99 5/16/00 6/16/00 11/11/99

Exxon Chem (Intermar) 4

Neste 4 8/23/97 5/26/96 10/23/97 5/27/97 4/3/98

PCS 4 9/11/99 7/25/99 8/13/99 8/3/99 9/8/00

Petronas 4 1/31/00 3/18/00 12/4/99

Repsol 4 10/5/98 8/10/97 8/13/99

Shell 4 10/6/00 5/31/00 9/17/00 7/16/00 11/27/97 7/17/00 10/17/00 10/22/00 9/19/99 7/7/00 12/12/00 7/4/00 6/11/00

Statoil 4 10/12/00 6/23/99 9/30/00 12/26/00 7/16/98 11/12/98 4/27/00 3/1/00 2/16/98 1/8/00

Texaco 4 1/11/00 9/29/00 7/26/00 6/17/00 11/19/99

NGC 1 11.11.98 20.01.99 04.12.98 02.06.98 29.11.98 03.02.98 5/18/98 09.03.98 27.12.98 20.01.99 4/7/99 04.06.98 26.10.98Flag State 1 5/16/99 3/19/93 12/16/92 6/2/98 10/26/99 9/16/98 5/18/99 11/3/96 9/20/99 10/16/98 11/6/98 11/12/98USCG 1 6/3/99 9/27/97 11/18/98 8/19/94 9/15/92 4/30/99 9/20/99 5/24/99 4/9/98 2/21/99 8/20/99 5/19/99Port State 1 9/2/99 6/25/99 2/9/99 11/10/99 10/26/99 10/14/98 7/6/99 12/16/99 7/14/99 11/20/99 10/16/98 3/22/99 1/20/97 1/14/99CAP survey 4 3/26/02 24.06.01 8/20/02 4/11/00 2/25/99 9/19/99 12/11/01 4/8/02 2/18/00 6/17/02 4/9/00 2/17/02CDI Internal 2 2/11/00 6/29/00 10/19/00 10/1/00 6/5/00 9/30/00 2/19/00 8/11/00 7/5/00 2/5/00 6/19/00 5/15/99 6/9/00 5/22/00SMC 2 4/16/03 11/30/02 5/18/00 1/31/04 4/30/03 4/30/04 11/5/02 4/25/00 10/31/02 3/19/00 1/10/04 9/8/04 9/29/99 8/31/03

CDI 2 3/11/00 7/29/00 11/19/00 11/7/00 7/5/00 11/9/00 3/19/00 9/11/00 8/5/00 3/5/00 7/19/00 6/15/00 7/9/00 6/22/00OCIMF (SIRE) 1 10/6/99 11/11/99 5/31/99 9/17/99 7/16/99 2/4/99 7/17/99 10/18/99 10/23/99 9/19/98 7/8/99 7/26/99 7/5/99 6/11/99

1= Last inspected 2= Inspection due 3= Approved from 4= Approved until

Updated as of Feb 15, 2000

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Condition Assessment Programme (CAP)

In addition to regular surveys by the classification societies, all NGC vessels are subject to the Condition Assessment Programme (CAP) survey, a rating system adopted as a tool to assess the overall technical standards of major oil/gas vessels above 15 years of age.

Rating:5 - new condition with no evidence of waste, wear and tear4 -good condition with negligible waste, wear and tear3 -satisfactory condition with moderate waste, wear and tear affecting neither the minimum strength nor the operability2 -condition reflects extensive waste, wear and tear indicating that maintenance repairs should be effected within a specific period of time1 -condition reflects extensive waste, wear and tear requiring maintenance repair prior to further operation

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The CAP rating for the hull is based upon: • visual inspection • statistical analysis of thickness measurements • strength calculations

The CAP rating for the machinery and cargo systems is based upon:

• visual inspection • performance measurements of main and auxiliary

engines • oil analysis • capacity testing of cargo and ballast pumps • vibration measurements of most rotating

equipment

Basis for the CAP Rating

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27 March 2000

Current CAP survey ratings of the NGC Fleet

Vessel Issued Rating Due dateNorgas Carine * - -

Norgas Challenger 9-Apr-1999 3 26-Mar-2002Norgas Chief 4-Jul-1998 3 24-Jun-2001Norgas Discoverer 3-Sep-1999 3 7-Aug-2002Norgas Energy 19-Jun-1997 4 11-Apr-2000Norgas Navigator - - 30-Jun-2000Norgas Patricia * - - -

Norgas Pilot - - 31-Mar-2000Norgas Pioneer 20-Jan-1999 3 11-Dec-2001Norgas Sailor 6-Sep-1999 3 6-Sep-2002Norgas Trader - - in progressNorgas Traveller 26-Jul-1999 3 1-Jun-2002Norgas Victory 7-Oct-1997 4 9-Apr-2000Norgas Voyager 3-Mar-1999 3 17-Feb-2002

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Maintenance - Planning and Organisation

Vessel Class Society

Flag Last Drydock

Next Drydock

Next Special Survey

SMC certification

Norgas Carine GL Liberia 1998-05 2000-11 2004-05 2003-04Norgas Challenger DNV NIS 1999-04 2001-10 2004-02 2002-11Norgas Chief GL Liberia 1998-06 2001-01 2003-06 2003-03Norgas Discoverer DNV Liberia 1998-05 2000-11 2001-05 2004-01Norgas Energy DNV NIS 1999-10 2002-04 2004-04 2003-04Norgas Navigator GL Liberia 1998-12 2001-06 2001-10 2004-04Norgas Patricia GL NIS 1997-05 2001-05 2001-06 2002-11Norgas Pilot GL Liberia 1998-12 2001-06 2002-05 2004-10Norgas Pioneer GL Liberia 1998-12 2001-05 2003-09 2002-10Norgas Sailor GL Liberia 1999-08 2002-01 2001-08 2000-05Norgas Trader GL Liberia 1999-05 2001-11 2001-04 2004-01Norgas Traveller GL Liberia 1999-06 2001-12 2002-02 2004-09Norgas Victory DNV NIS 1998-05 2000-10 2001-01 2004-12Norgas Voyager DNV Liberia 1998-10 2001-03 2002-05 2003-08

Drydockings, Special Surveys and ISM certification schedules aretracked closely to ensure quality control while minimising interruptions to commercial activities.

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Maintenance - Using Information Technology

One of the tools we use to achieve efficiency in our maintenance programme is a fully integrated operations and maintenance systemcalled RAST OM.

Essentially, this system allows the crew and shore personnel to :• capture maintenance data by running hour, date or

maintenance condition• standardise job descriptions and job reporting• gather details on all parts and components used• monitor inventory levels, cost and consumption patterns,

facilitating economic purchasing, shipment and trend-analysis• keep costs under control by integrating maintenance and

purchases against budgeted allowances• analyse cost and deviation by customised reports

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27 March 2000

Safety

The single most important factor as far as safety is concerned is the quality and dedication of sailing crew and onshore personnel. Shipping classification societies have estimated that 80% of all maritime casualties can be directly attributed to human error.

At NGC, we believe in finding the right people and rewarding themfor their dedication and performance. They are provided with ongoing training and equipped with the technology required to beable to upgrade their knowledge continuously.

The IMS Group operates maritime training facilities in Russia and China, where entire crews are educated, trained and retrained, on all aspects of gas shipping.

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27 March 2000

Standards

ManagementReview

Checking &

Corrective Action

Policy

Planning

Implementation & Operation

ContinuousImprovement

NGC sets its own standards when it comes to obtaining a high degree of operating quality. Continuous efforts in the areas of staff education and ship maintenance are evident in the positive results we are achieving.

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The trend is good.

NGC - Focus on efficiency and quality of operation

05

10152025303540

88 89 90 91 92 93 94 95 96 97 98 99

No.

of c

laim

s

C rew c la ims

C argo c la ims

02468

10121416

88 89 90 91 92 93 94 95 96 97 98 99

No. o

f cla

ims

H&M Insurance ClaimsH&M Insurance ClaimsP&I Insurance ClaimsP&I Insurance Claims

Hull & Machinery premium vs. claims refundHull & Machinery premium vs. claims refund

Average annual premium paid per ship/year on overall average value per vessel versus average annual claims refunded per ship, figures in USD

0

25,000

50,000

75,000

100,000

125,000

93/94 94/95 95/96 96/97 97/98 98/99 99/2000

usd

C laim s refunded

P rem ium s paid

P & I premium paid vs. claims refundedP & I premium paid vs. claims refunded

0

5,000

10,000

15,000

20,000

25,000

93 94 95 96 97 98 99

usd

P rem ium s paid

C la im s re fu n d e d

Average annual premium paid per ship/year on overall average value per vessel versus average annual claims refunded per ship, figures in USD

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Benchmarking

Setting internal standards represents one aspect of the NGC fleetmanagement strategy. We also recognise the importance ofbenchmarking ourselves. Apart from setting realistic standards, this exercise enables us to spot the deviations of actual circumstances frombenchmarked norms and goals.

Through organisations like GARD, SKULD and DNV, we can compare our track record against the achievement of others in the industry.

From the next five slides, it can be observed that gas carriers are generally safer and that NGC is a leader in its class in relation tominimising crew and cargo claims.

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27 March 2000

Claims refund

Figures given by Skuld and Gard in connection with benchmarking done in November 1999

All figures in USD pr. GT

0,300,461,423,44Grand Total

0,030,100,110,42Third Party

000,270,61Passenger

0,230,140,350,56Crew

0,0400,300,77Oil Pollution

00,210,391,07Cargo

NGC vessels -Gard 1994 - 99

NGC vessels -Skuld 1996- 99

All LPG/LNG -Skuld 1996 – 99

All vessels Skuld 1996 – 99

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Highlights – USD Claims/GTHighlights – USD Claims/GTUSD Claims/GT – NGC & OthersUSD Claims/GT – NGC & Others

Highlights – Claims/Vessel YearHighlights – Claims/Vessel Year

P&I Benchmarking (1992 – 1999)

No of Claims/Vessel YearNo of Claims/Vessel Year

0.0

0.5

1.0

1.5

2.0

2.5

Cargo

Crew

O il P oll.

3rd P arty

Pas s .

Total

USD

! Cargo: NGC fleet on same level as other vessels of same size, but higher than vessels larger than 10.000 GT.

! Crew: NGC fleet much lower than other vessels of same size, but in line with vessels larger than 10.000 GT.

! Total: Shows that the NGC performance issignifically better than vessels of similar GT.

0.0

0.2

0.4

0.6

0.8

1.0

1.2

Cargo

Crew

O il P oll.

3rd P arty

Pas s .

Total

No. o

f cla

ims

! Claims frequency: NGC fleet generally lower frequency than other vessels of same or larger size, particularly for crew claims.

! Total: Shows that NGC has a lower frequency of claims compared with both vessels of same and larger size.

NGC Fleet10’-100’ GT<10’ GT

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27 March 2000

Claims - Gas versus Chemical Vessels

0.38

8

0.30

3

0.35

0.10

7

0.26

9

1.41

6

1.08

8

0.77

0.39

7

0.05

5

5.63

2

3.32

0

1

2

3

4

5

6

Cargo Crew OilPollution

Other3.party liab.

Pass. andother pers

GrandTotal

Cla

ims(

US

D)/

GT

All GasAll Chemical

Covers Skuld LNG/LPG fleet plus 14 NGC vessels versus Skuld Chemical fleet.

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27 March 2000

PSC Detentions by Vessel Type

Source: Paris MOU 1998 Annual Report

In 1998, the average percentage of inspections with deficiencies was54.85 - this chart shows the percentage that each vessel category fallsabove or below that average.

-35

-30

-25

-20

-15

-10

-5

0

5

10

15

% A bov e or Be low the A v erage 1.8 -6.96 -28.83 9.7 0.98 -7.04 1.26 -13.62 -12.02

Bulk Car r iersChemic a l Tankers

Gas Car r iersGenera l Dry

CargoOther Ty pes

Pas s enger Ships /Fer r ies

Ref r igerated Cargo

Ro-Ro/Conta iner /

V ehic le

Tankers /Comb. Car r iers

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27 March 2000

PSC Detentions - 1998 vs. 1997 by Vessel Type

Source: Paris MOU Annual Report 1998

The number of detentions relating to gas carriers are considerably lower than the other vessel categories.

-5

0

5

10

15

20

25

%

1998 13.84 11.96 2.65 22.46 8.54 5.56 11.86 6.99 7.92

1997 15.74 10.99 1.68 23.6 8.17 1.89 10.31 6.57 9.23

Dif f erenc e -1.9 0.97 0.97 -1.14 0.37 3.67 1.55 0.42 -1.31

Bulk Carr iers

Chemic al Tankers

Gas Carr iers

General Dry

Cargo

Other Ty pes

Pas s enger

Ships /Fer

Ref r igerated Cargo

Ro-Ro/Container/V ehic

Tankers /Comb.

Carr iers

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27 March 2000

Average Age of Vessels Sold for Scrapping

Source: DNV

1992 1993 1994 1995 1996 1997 1998 1999TANKERS

VLCC 18.8 19.9 19.9 21.0 22.7 23.7 23.9 24.4Suezmax 21.2 20.7 20.8 20.4 20.6 24.3 22.7 24.3Aframax 26.1 23.5 22.8 23.6 25.2 23.1 27.1 24.2Small 28.3 25.0 26.8 29.0 27.4 32.1 27.3 27.4

Average 23.8 23.1 22.6 25.2 25.3 28.3 25 24.9

BULK CARRIERSCapesize 21.2 21.1 21.7 22.3 23.4 23.9 24.1 23.6Panamax 23.6 25.0 24.6 25.6 24.5 24.5 24.7 23.5Handys 24.7 25.0 24.9 26.1 25.8 26.0 25.4 25.8

Average 23.6 24.2 24.0 25.2 25.0 25.5 25.0 24.9

Combos 20.8 21.9 21.9 22.4 23.1 23.6 22.8 24.3Gas Vessels 26.8 24.9 26.3 30.0 27.9 28.4 27.5 31.4Other Dry 24.7 29.2 26.5 27.2 27.2 26.5 25.5 25.2

ALL VESSELS 23.9 25.9 24.5 25.9 26.0 26.3 25.2 25.1

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27 March 2000

20

22

24

26

28

30

32

1992 1993 1994 1995 1996 1997 1998 1999

TANKERS BULK CARRIERS Combos Gas Vessels Other Dry

Average Age of Vessels Sold for Scrapping

Source: DNV, Port State Control 1995 Paris Memorandum Countries

Gas vessels in general, do notsuffer the same wear and tear asother types of vessels.

This is because the product carried, despite its hazardous nature, is contained appropriately, safely andseparately.

The direct consequence is, lessstrain on the hull and tanks,which can virtually last forever aslong as properly and diligently maintained according to theprocedures we have outlined previously.

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NGC Fleet Age

The age of our fleet is not relevant when it comes to the successful delivery of the product to our customers.

Instead, we strongly adhere to the principle of ...

“what gets measured, gets

done”.

Vessel name Built Age RebuiltNORGAS DISCOVERER 1971 29 1990/1995NORGAS VOYAGER 1972 28 1990/1996NORGAS SAILOR 1976 24 -NORGAS PILOT 1977 23 -NORGAS NAVIGATOR 1977 23 -NORGAS ENERGY 1979 21 -NORGAS PIONEER 1979 21 -NORGAS TRADER 1981 19 -NORGAS VICTORY 1982 18 -NORGAS TRAVELLER 1982 18 1987NORGAS CHIEF 1983 17 -NORGAS CHALLENGER 1984 16 -NORGAS CARINE 1989 11 -NORGAS PATRICIA 1991 9 -

Average Age of Fleet 19.8 years

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27 March 2000

Combination ofnationalities Recruitment

QUALITYSHIPPING

Owner is managerQuality

managerQuality owners

Long term

Clear structure,communication

LivingSMS

Top safetyfocus

Industrialshipping

Training

Permanentrepairs

Quality => savings

Managementstructure

Maintenance

Businessphilosophy

Crewingphilosophy

Stability

To Summarise ...

Source: SKULD

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27 March 2000

EXECUTIVE COMMITTEE

After Office Hours Home: Mobile:

Morits Skaugen jr. +47 22 55 40 95 + 47 91 31 42 51Chief Executive OfficerTerje Orehagen +47 66 80 69 77 + 47 91 35 54 91President/ Chief Operating OfficerGunnar Thorvildsen +65 474 8004 +65 9635 6921Vice President CharteringHans Verswijver +32 9384 2596 +32 7594 7404Vice President OperationsBård Norberg +47 33 32 26 91 +47 91 31 84 41Vice President GRS/Projects

NGC Locations and Key Contacts

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Telephone: +47 23 12 03 00Telefax:

Commercial +47 23 12 03 01Adm./Finance +47 23 12 03 55Fleet +47 23 12 03 70Purchase +47 23 12 03 77Telex: 72 899 NGC N

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http://www.skaugen.com

After Office Hours Home: Mobile:

TOTAL QUALITY MANAGEMENT Annette Malm Justad +47 22 14 13 84 +47 95 20 93 96Vice PresidentProject and TQMRolf Hogholen +47 64 87 30 89 +47 90 77 84 12Special Projects

FLEETSvein Helge Guldteig +47 67 56 32 12 +47 90 64 98 01Vice PresidentTechnology & Environment

PURCHASINGChristian Biering +47 32 15 76 04 +47 90 67 11 01Vice President

ACCOUNTING & FINANCEBente Flo +47 22 73 00 79 +47 91 64 56 08Vice President

INFORMATION TECHNOLOGYMorten Nas +47 33 08 14 00 +47 90 53 20 32Vice President

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