InterOil Announces LNG Project Decision to Negotiate Gas Offtake With Industry Operators

InterOil Corporation, announced that, as a result of resolutions passed by the Board of Directors of PNG LNG, Inc., the joint venture owned by affiliates of InterOil, Pacific LNG and Merrill Lynch, to construct an LNG (liquid natural gas) plant on a site adjacent to InterOil’s refinery in Papua New Guinea, Merrill does not have any right of first negotiation in respect of purchase or offtake of any LNG that may be produced by the plant. In addition, the Board of Directors adopted resolutions redeeming Merrill’s Class A voting shares. Merrill continues to hold all Class B shares issued to it and reflecting its economic interest in the Project.

This decision was taken by the Board in response to recent financial unrest and the resulting need to secure offtake arrangements directly with industry LNG participants. PNG LNG Inc. and InterOil’s joint venture subsidiary have sought protective orders in the New York State Supreme Court to affirm these resolutions and support negotiations with potential industry-based LNG offtakers. No assurances can be given as to whether the court will grant the protective order.