StatoilHydro Joins EGL in Trans Adriatic Pipeline Gas Project

The 520-kilometre long pipeline will transport gas via Greece and Albania and across the Adriatic Sea to Italy’s southern Puglia region and further into Western Europe. TAP’s offshore length will measure about 115 kilometres. In its upstream part TAP will interconnect with Greece's existing pipeline system that is linked further to the east with systems in Turkey.

The gas transport capacity of the TAP pipeline will be around 10 billion cubic metres annually, with the option to expand to 20 billion cubic metres. TAP is expected to be operational at the earliest from 2011, depending on the gas shipment needs.

Implementation of the TAP project is subject to a final investment decision planned for the second half of 2009. EGL, which started the project, estimates it will cost 1.5 billion euros to build the pipeline. The final cost will depend on several factors at the time of construction, such as international steel prices and other pipeline equipment-related costs.

TAP is supported by the European Union

The TAP project is in its development phase supported by the European Union (EU) as a “Priority Project” under its Trans-European Energy Networks (TEN-E) guidelines, as it contributes to the EU’s objectives and policies aimed at diversification and security of gas supply.

“We are pleased to join EGL in the effort of offering a new outlet for gas transported from Asia to Europe. We aim to add value to the TAP project by combining our market competence with a strong track-record in developing and building gas pipelines,” said Rune Bjørnson, Executive Vice President for Natural Gas in StatoilHydro. “Our joining of the TAP project should be viewed as a move to offer an attractive market outlet for the Shah Deniz gas to the European market,” said Mr Bjørnson.

StatoilHydro is today the second largest supplier of gas to Europe. The group holds a 25.5 per cent stake in Shah Deniz, a major gas field in the Azeri part of the Caspian Sea. The field commenced production in 2006. Recently, additional reserves were proven up to support the development of a second stage of the field.

Opening the Eurasia Gas Corridor

"TAP’s development is a natural consequence of EGL’s supply requirements, while it also matches Europe’s needs to diversify gas sources via the shortest route along a new Eurasian corridor,’’ said Joachim Conrad, EGL's Head of Gas Division and Member of the Executive Management. “TAP combines the principles of energy security, regional growth, stability and sound solutions, and StatoilHydro’s commitment to join us is proof of our realistic approach and determination with this project.”

EGL has expanded its natural gas procurement portfolio with long-term supply agreements for additional quantities from the Middle East in the amount of 5.5 billion cubic meters per year by 2011, thus enabling the company to make full use of its initial transportation capacity in TAP.

The project also includes the option to develop natural gas storage facilities and a liquefied natural gas (LNG) terminal in Albania, which in turn would further contribute to increasing the security of supply in southeast Europe.

TAP is currently in the front-end engineering stage. The feasibility study was concluded by EGL in March 2006. TAP's extended basic engineering, including the Environmental Impact Assessment (EIA) was concluded in March 2007, and included the offshore survey for the pipeline, which was
carried out in 2006.

About EGL

Swiss-based EGL Group is an asset-based energy trader with 19 European subsidiaries and offices. It is accredited to trade on the most important European energy exchanges. EGL holds interests in Swiss power plants and gas-fired combined-cycle power plants in Italy, and holds long-term electricity supply contracts with electricity producers in France. It is investing in additional power production capacities and transport infrastructure in key European markets. The company is majority-owned (87.4 percent) by AXPO Group, a leading Swiss energy supply company. The remaining shares are traded on the SWX Swiss Exchange, (ticker: EGL).

About StatoilHydro

StatoilHydro is a major international, integrated energy company, based in Norway. The company is the leading operator of oil and gas activities on the Norwegian continental shelf (NCS). StatoilHydro has operations in 40 countries and 31,000 employees, building positions internationally. It is the world’s third largest net seller of crude oil and the second largest supplier of gas to Europe. As techni-cal service provider for the major pipeline systems for gas from the NCS and for two large gas proc-essing plants, StatoilHydro has extensive experience from transportation, processing and marketing of piped gas. StatoilHydro also markets liquefied natural gas (LNG). The Norwegian state is the big-gest shareholder in StatoilHydro with an ownership of 62.5 percent. StatoilHydro is listed on Oslo Børs (ticker: STL) and the New York Stock Exchange (ticker: STO).

Further information

EGL Group:
Lilly Frei, Head of Corporate Communication
Tel. +41 44 749 40 10
lilly.frei@egl.eu

StatoilHydro:
Rannveig Stangeland, Vice President Communication Natural Gas
Tel. + 47 481 258 78 / +47 51 99 26 42
raso@statoilhydro.com