MARAD TO SELL LNG TANKERS

Oct. 1, 1990

The U.S. Maritime Administration (Marad) and several companies have agreed to settle a dispute centering on ownership and sale of three liquefied natural gas tankers. Marad's agreement covering the Arzew, Southern, and Gamma vessels is with units of Royal Dutch/Shell Group, Argent group, and Cabot Corp. Marad acquired the tankers by repossession from subsidiaries of El Paso Corp. Here are key provisions of the settlement: All litigation among the parties will be dismissed with prejudice.

The U.S. Maritime Administration (Marad) and several companies have agreed to settle a dispute centering on ownership and sale of three liquefied natural gas tankers.

Marad's agreement covering the Arzew, Southern, and Gamma vessels is with units of Royal Dutch/Shell Group, Argent group, and Cabot Corp. Marad acquired the tankers by repossession from subsidiaries of El Paso Corp.

Here are key provisions of the settlement:

All litigation among the parties will be dismissed with prejudice.
Gamma will be sold to Cabot, which will charter it to Nigeria LNG Ltd. on a half-yearly basis after start-up of the Nigerian LNG export project. Cabot will have free use of the tanker at all other times. It plans to use the vessel for LNG shipments to the U.S. from Algeria and Nigeria.
Arzew and Southern will be sold to Argent, which will charter them to Shell.
Total purchase price paid to Marad for each vessel will be $18.1 million, including option fees already paid to Marad.
The vessels will undergo refurbishment in U.S. shipyards and will receive maintenance and repairs in the U.S.
The vessels will be dedicated to LNG trade between the U.S. and other countries.