SINGAPORE, 2 March 2003:
Neptune Orient Lines (NOL) today announced its oil transportation company American Eagle Tankers (AET) has won a long term contract to transport fuel from Venezuela to Asia.

NOL Chairman Cheng Wai Keung said the company has won the tender to transport orimulsion, a bitumen-based fuel, for Bitor, a subsidiary of the Venezuelan national oil company, PDVSA, for delivery to Singapore power company Power Seraya.

The contract is for seven years with an option for a three year extension and requires a fleet of five VLCCs to transport the fuel from Venezuela to Singapore and other parts of Asia. The value of the contract is in the order of US$220 million.

As a consequence of the extra business, the company has committed to expand its fleet of VLCCs by three ships.

"A fleet of five VLCCs is needed to meet the customer's volume and quality requirements," Mr Cheng said. "We negotiated with Far Eastern shipyards last year to book capacity to build an additional three VLCCs with the possibility of winning this tender in mind."

Delivery of the vessels is due from the end of 2004 through to the beginning of 2005.

AET's President and CEO, Joseph Kwok highlighted that the contract made use of otherwise unused capacity in the backhaul transportation leg from the Americas to Asia. "We are able to fully utilise capacity on both legs of the journey, so, instead of returning empty back to Asia, the vessels will be earning revenue."

Mr Kwok said the contract is due to begin in the second half of 2004 with AET's two current VLCCs, the Eagle Vermont and the Eagle Virginia, also being deployed to service the contract.

Because the start date for the contract is 2004, there will be no impact on NOL's net tangible asset (NTA) value or earnings per share (EPS) in 2003.