Kvaerner Masa-Yards signs contract for icebreaking stand-by and supply vessels for Russia

The contracts are still subject to approval by the Central Bank of Russia and to issues related to post-delivery financing. The contract for the second ship shall be confirmed by early November 2003.

Kvaerner Masa-Yards and FESCO have agreed not to publish the value of the contracts at this stage. The contracts will not be recorded to Kvaerner Masa-Yards' order reserve until all approvals and financing have been confirmed.
The vessels are due for delivery in 2005 and will be operating in the harsh Okhotsk Sea environment in the Sakhalin area in Far East Russia.

"The new contract is fully in line with FESCO's strategy of being the leading operator of icebreakers and heavy ice-strengthened vessels in the Far-East. FESCO has chosen Kvaerner Masa-Yards' design as most suitable for the environmental conditions around Sakhalin Island. We hope for successful co-operation with the shipyard in order to receive good quality ships on agreed time," said Mr. Evgeniy N. Ambrosov, President and CEO of FESCO.

Mr. Jorma Eloranta, President and CEO of Kvaerner Masa-Yards Inc. said: "These contracts are the first contracts for icebreakers from Finland to Russia since the construction of the nuclear icebreakers "Taymyr" and "Vaygach" in the 1980's. We are very pleased to have the possibility to sign these newbuilding contracts with our old client FESCO and by that to re-establish the very long and fruitful cooperation we have had in shipbuilding with them and between our countries."

"In addition to a number of arctic cargo ships, we have delivered six icebreakers for FESCO since the late 1960's, of which four are still in their operation. FESCO has expressed their satisfaction with the operation and quality of these ships. We regard this to be a proof of the quality in design and shipbuilding we always strive after," Mr. Eloranta continues.

These ships are based on the "double-acting" concept for icebreakers, which was developed by the Arctic Technology Centre (MARC), part of Kvaerner Masa-Yards Inc. The "double-acting" concept has now become an industry standard. In this concept the vessel meets the most difficult ice conditions moving with the ship's stern first, using azimuthing electric propulsion. By this, less power is needed and the ship's bow can be optimised for efficient open water operation.

The operating conditions in the Sakhalin area are demanding with freezing temperatures down to -40° C and difficult ice conditions with ice ridges up to 20 metres deep and solid ice exceeding 1,5 meters in thickness.

The current ship design is a result of the long term R&D activity by MARC. This activity started already in 1989 with research on the operational conditions offshore Sakhalin and has continued in form of different research and development tasks for the potential operators and oil companies in the area and in co-operation with several Russian organisations.
The vessels have a length over all of 100 metres and a dead-weight of 4.000 dwt. The shaft power is 13 MW and the ships will be fitted with two azimuthing rudder propellers.
For further information:

Geir Arne Drangeid, Senior Vice President, Group Communications, Aker Kværner ASA:
+47 67 51 30 36
Jorma Eloranta President and CEO, Kvaerner Masa-Yards: +358 9 194 2201

Investor Relations: Tore Langballe, Vice President, Group Communications, Aker Kværner ASA:
+47 67 51 31 06

Aker Kvaerner
is a leading global provider of engineering and construction services, technology products and integrated solutions. Group activities span a number of industries, including Oil & Gas upstream and downstream, Refining & Chemicals, Pharma & Biotech, Mining & Metals, Power Generation, Pulping and Shipbuilding. Aker Kvaerner is a multi-local group of businesses with nearly USD 6 billion of annual revenues and around 33,000 employees in more than 30 countries.

Kvaerner Masa-Yards Inc.
operates two highly modern newbuilding yards in Finland specialising in designing and building technically demanding vessels. At the company's Helsinki yard some 65 icebreakers and icebreaking offshore vessels have been built over the years. Piikkio Works Oy, a separate company under Kvaerner Masa-Yards, specialises in the manufacture of ready-to-install modular cabins and bathrooms, on two locations in Finland. Kvaerner Masa-Yards also offers marine related design and engineering services, at its marine engineering units located in Finland, USA and Canada. Kvaerner Masa-Yards Inc. has annual revenues of about EUR one billion, and an own staff of about 4,400. Kvaerner Masa-Yards Inc. is owned by Aker Kvaerner and is a member of the Aker Kvaerner Yards group of shipyards.

Far Eastern Shipping Company (FESCO)
based in Vladivostok, the capital of Primorsky Region, is the largest shipping company in Eastern Russia and has been a regional shipping industry leader for many decades. Founded in 1880 and ultimately reorganized as a publicly held company in 1992, FESCO owns and operates a fleet of more than 81 vessels, including 22 containerships, 11 refrigerator vessels, over 30 bulk, timber and other dry cargo carriers along with a number of icebreakers, passenger and harbour vessels. The company employs over 4,500 people on ships and ashore, and manages a large network of overseas subsidiary agencies and representative offices.