Crystal Energy Secures Agreement for Domestic Energy Supply to Meet Urgent Natural Gas Demand.

Business Editors

OXNARD, Calif.--(BUSINESS WIRE)--Jan. 28, 2004

Agreement to Use Alaskan Supply of Natural Gas for the Crystal

Clearwater Port Project Ensures Secure Domestic Supply,

Means Less Reliance on Foreign Imports

Crystal Energy, LLC announced

today that it has signed a "Memorandum of Understanding" (MOU) with the Alaska Gasline Port Authority (AGPA) to negotiate a detailed letter of intent to supply domestic liquefied natural gas (LNG) for its Clearwater Port importation terminal from an LNG plant to be built in Alaska.

Under the arrangement, the Port Authority's Alaska LNG Project would supply up to eight hundred million cubic feet per day (800 mmscfd) of natural gas for a 20-year period through the Crystal Clearwater Port facility. This amount equals nearly half of California's projected residential demand.

The Crystal Clearwater Port project, located 11 miles offshore Ventura County, Calif., calls for utilizing existing "Platform Grace" to import natural gas in a liquid form (LNG). Vessels will transport LNG from the proposed plant in Valdez, Alaska, to the platform, where it will be converted back into vapor form. The natural gas will then be delivered into the existing Southern California Gas Company transmission system via pipeline, providing California with a clean, secure and abundant source of domestically produced energy that will help meet the state's energy needs well into the future.

"We are pleased to have initiated discussions with the Alaska Gasline Port Authority," said William O. Perkins III, Crystal Energy, LLC president. "The AGPA project would deliver a portion of their state's abundant natural gas resources to California through our offshore LNG importation facility. Though the AGPA project is still in the development phase, we are confident their project will go forward, and are working toward a definitive agreement with them."

"Such an agreement would constitute a significant way to meet long-term domestic demand on the West Coast with secure, stable domestic reserves, and would also serve the best interests of the residents of both California and Alaska by reducing our reliance on foreign sources of energy," stated Bert Cottle, chairman of the AGPA.

The U.S. Department of Energy and Federal Reserve Chairman Alan Greenspan have recently stressed the need for such facilities in order to avoid a looming national shortage of natural gas that could push future natural gas prices to new historic levels. California currently imports about 90 percent of the natural gas it consumes, and demand projections call for a 20 percent increase over the next 10 years.