FOR IMMEDIATE RELEASE CONTACT Scott Peterson (503) 471-6825 by po2933


									FOR IMMEDIATE RELEASE                              CONTACT:       Scott Peterson
                                                                  (503) 471-6825

Projects Fully Funded Through Development Stage

Houston, TX, May 22, 2006 - NorthernStar Natural Gas Inc., a U.S.-owned and managed
company focused on the development of domestic LNG terminal projects on the West Coast
of the United States, today announced it has successfully completed a $100 million private
offering of convertible notes to qualified institutional buyers. The company is committed to
providing a safe, affordable and environmentally superior solution to the growing need for
additional natural gas supplies in the western United States.
       The net proceeds of the notes will be used to fund the development of NorthernStar’s
existing LNG projects in Oregon and California, as well as potential new opportunities. To
date, the company has already expended in excess of $35 million on furthering the
development of its existing terminal projects: Bradwood Landing located on the Columbia
River in Oregon and Clearwater Port located on an existing oil platform 12.6 miles offshore
of Southern California. Both projects, if completed on schedule, are expected to be the first
operating LNG terminals in their respective markets. At this time, Bradwood Landing is the
only LNG terminal project in the Pacific Northwest that has advanced to the final stages of
the Federal Energy Regulatory Commission (FERC) permitting process. Because Clearwater
Port utilizes an existing platform and does not require construction of LNG storage facilities,
NorthernStar believes that it can complete construction in a substantially shorter timeframe
compared with other offshore terminal proposals in Southern California. The company is
currently finalizing improvements to the Clearwater Port project and preparing to file an
updated application in June with the U.S. Coast Guard and California State Lands
       “This funding provides the necessary capital needed to successfully complete the
development stage of our LNG projects in Oregon and California,” stated Paul Soanes,
NorthernStar’s President. “We believe our portfolio of projects will be more attractive to
potential suppliers than single project entities because we can provide them with flexibility
to deliver LNG to multiple receiving points connecting to several major pipelines and West
Coast markets. This competitive advantage will translate into lower costs and better
services for consumers in the markets we serve.”
       “Simultaneously pursuing a portfolio of LNG terminals will provide economies of scale
at the development, marketing, financing, construction and operating stages,” said William
S. Garrett, Chief Executive Officer of NorthernStar. “We will be able to leverage our
knowledge and experience as we develop our projects to expedite the permitting process
and to increase the likelihood of success for each successive project.
       “The completion of this offering further enhances our competitive position,” added
Mr. Garrett. “With our development funds in place, NorthernStar will move forward quickly
to complete the development of its projects and position itself to have a competitive
advantage in securing suppliers and project financing.”
       NorthernStar is over 35% owned by management and 50% owned by private equity
funds managed by MatlinPatterson Global Advisers LLC. The company has an experienced
management team with significant project development experience, having been involved in
the development of more than 50 energy infrastructure projects with an aggregate
investment of over $15 billion — including involvement in the development, construction or
operation of nine LNG projects worldwide.

About NorthernStar Natural Gas Inc.
NorthernStar Natural Gas was founded to develop, build, own and operate LNG
receiving/importation terminals on the West Coast of the United States. The ownership of
the company’s initial LNG projects was consolidated in March 2006 to take advantage of
project portfolio diversification, economies of scale and greater access to capital, and to
offer multiple receiving points to customers. NorthernStar’s projects, when complete, will
provide natural gas suppliers with direct access to major West Coast demand centers, and
provide the region with direct access to a low cost reliable source of new gas supply.


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