UNIMAR CO, 10-K, 1994-03-28

UNIMAR CO
10-K, 1994-03-28
CRUDE PETROLEUM & NATURAL GAS

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PART I
Item 1. Business

General

Unimar Company (the Company) was organized as a general
partnership in 1984 under the Texas Uniform Partnership Act. The
partners are LASMO (Ustar), Inc. (Ultrastar), a Delaware
corporation and an indirect, wholly owned subsidiary of LASMO plc
(LASMO), a public limited company organized under the laws of
England, and Unistar, Inc. (Unistar), a Delaware corporation and
a direct subsidiary of Union Texas Petroleum Holdings, Inc.
(UTPH), a Delaware corporation. UTPH is approximately 38 percent
owned by two partnerships controlled by an affiliate of Kohlberg
Kravis Roberts & Co. (KKR) with the remaining outstanding common
stock publicly held.

The Company's sole business is its ownership of ENSTAR
Corporation (ENSTAR) which, through its wholly-owned
subsidiaries, Virginia International Company (INTERNATIONAL) and
Virginia Indonesia Company (VICO), has a 23.125 percent working
interest in, and is the operator of, a joint venture (the Joint
Venture) for the exploration, development and production of oil
and natural gas (gas) in East Kalimantan, Indonesia, under a
production sharing contract (Production Sharing Contract or PSC)
with Perusahaan Pertambangan Minyak Dan Gas Bumi Negara
(Pertamina), the state petroleum enterprise of the Republic of
Indonesia. The majority of the revenue derived from the Joint
Venture results from the sale of liquefied natural gas (LNG).
Currently, the LNG is sold principally to utility and industrial
companies in Japan, Taiwan and Korea. See "The Joint Venture"
below.

The principal executive offices of the Company are at 1221
McKinney, Suite 600, Houston, Texas 77010 and its telephone
number is (713) 654-8550. A Management Board consisting of six
members, three appointed by each partner, exercises management,
budgeting and financial control of the Company. As of December
31, 1993, VICO, in its capacity as the Joint Venture operator,
had approximately 2,130 employees in the United States and
Indonesia. The Company presently does not have any other
employees. All aspects of the Company's business that are not
associated with the management of the Joint Venture, such as
operations, legal, accounting, tax and other management
functions, are supplied by employees of the partners in
accordance with management agreements.

The Company can give no assurance as to the future trend of
its business and earnings, or as to future events and
developments that could affect the Company in particular or the
oil industry in general. These include such matters as
environmental quality control standards, new discoveries of
hydrocarbons, and the demand for petroleum products.
Furthermore, the Company's business could be profoundly affected
by future events including price changes or controls, payment
delays, increased expenditures, legislation and regulations
affecting the Company's business, expropriation of assets,
renegotiation of contracts with foreign governments, political
instability, currency exchange and repatriation losses, taxes,
litigation, the competitive environment, and international
economic and political developments including actions of members
of the Organization of Petroleum Exporting Countries (OPEC). See
Item 7 - Management Discussion and Analysis of Financial
Condition and Results of Operations.

Description of the Company's Indonesian Participating Units

(a) Market information. The Company's Indonesian
Participating Units (IPUs) are listed for trading on the American
Stock Exchange under the symbol "UMR." The following table shows
the reported high and low sales prices of the IPUs on a quarterly
basis:

INDONESIAN PARTICIPATING UNITS' PRICE RANGE

First Qtr. Second Qtr. Third Qtr. Fourth
Qtr.
1993
High 9-1/8 10-1/4 9-3/4 9-1/2
Low 6-7/8 8-1/4 8-5/8 8-1/4

1992
High 8 6-1/2 7 7-5/8
Low 5 5-1/4 5-3/4 6-3/8

Source of prices: American Stock Exchange

(b) Holders. As of March 1, 1994, 10,778,590 IPUs were
outstanding and held by approximately 4,301 holders of record.

Period Payment Date Payment

First Quarter - 1992 June 1, 1992 0.35
Second Quarter - 1992 August 31, 1992 0.37
Third Quarter - 1992 November 30, 1992 0.54
Fourth Quarter - 1992 March 1, 1993 0.44
First Quarter - 1993 June 1, 1993 0.46
Second Quarter - 1993 August 30, 1993 0.28
Third Quarter - 1993 November 29, 1993 0.45
Fourth Quarter - 1993 March 1, 1994 0.38

Each IPU entitles the holder thereof to receive until
September 25, 1999, a payment (Participation Payment) for any
quarterly period equal to the product of (i) a fraction, the
numerator of which is 1 and the denominator of which is equal to
the number of IPUs outstanding on the last business day of such
quarterly period, multiplied by (ii) the amount by which
cumulative Net Cash Flow (as defined below) through the end of
such quarterly period exceeds the aggregate amount of all
preceding Participation Payments in respect of all IPUs. If Net
Cash Flow is zero or negative for any quarterly period, no
Participation Payment for that quarter will be made.

The amount of Net Cash Flow for any quarterly period is
equal to the product of (i) a fraction, the numerator of which is
equal to the number of IPUs outstanding on the last business day
of such quarterly period, and the denominator of which is
14,077,747, multiplied by (ii) 32 percent of (a) all cash
actually received in the United States by INTERNATIONAL and VICO
(for purposes hereof, the Special Subsidiaries) during such
quarterly period from their aggregate 23.125 percent interest in
the Joint Venture (or actually received by them outside the
United States if they voluntarily elect not to repatriate such
cash) minus (b) an amount equal to the sum of (A) the aggregate
amount of all accruals or expenditures made by the Special
Subsidiaries during such quarterly period as a result of their
interest in the Joint Venture, (B) foreign or domestic taxes paid
by the Special Subsidiaries, (C) any award, judgment or
settlement and related legal fees incurred by the Special
Subsidiaries, (D) certain operating expenses incurred by the
Special Subsidiaries, and (E) the amortization of capitalized
advances made by the Special Subsidiaries for certain major
capital expenditures, together with interest thereon.

Participation Payments for any quarterly period will be paid
60 days in arrears to holders of record on the date 45 days after
the last day of the period. Participation Payments of less than
$0.01 per IPU for any quarterly period will be accumulated and
paid when Participation Payments in any succeeding quarter,
together with previously unpaid amounts, exceed $0.01 per IPU.

Units of Measure Restatement

In order to better conform the Company's disclosures to
those of its partners, the definition of a Net Equivalent Cargo
and MCF have been revised. All relevant disclosures relating to
prior years have been restated to conform to these two new
definitions.

Net Equivalent Cargo (NEC)

In prior years one NEC equaled the quantity of LNG delivered
for the Joint Venture's 97.9 percent interest in a 1973 Sales
Contract shipment or any average of 2,873 BBTUs of gas. The
definition of a NEC has now been changed to the quantity of LNG
delivered in a 1973 Sales Contract shipment or an average of
2,942 BBTUs.

MMCF of Gas

In prior years an MMCF of gas was referred to as "wet gas"
which contained residual amounts of condensate. This definition
has been changed to "dry gas" after any residual condensate has
been removed. As an example, approximately 3.1 billion cubic
feet of wet gas are required to produce 2.9 trillion BTUs of LNG;
whereas, approximately 3.0 billion cubic feet of dry gas are
required to produce 2.9 trillion BTUs of LNG.

BUSINESS
The Joint Venture

The Joint Venture participants are INTERNATIONAL (15.625%),
VICO (7.5%), LASMO Sanga Sanga Limited (an indirect subsidiary of
LASMO formerly called Ultramar Indonesia Limited) (26.25%), Union
Texas East Kalimantan Limited (an indirect subsidiary of UTPH)
(26.25%), and Universe Gas & Oil Company, Inc. (a subsidiary of a
consortium led by Japan Petroleum Exploration Co., Ltd.) (4.375
%). In addition, Opicoil Houston, Inc. (an affiliate of the
Chinese Petroleum Corporation) holds a 16.67 percent equity
interest and a 20 percent voting interest, with the remaining
3.33 percent non-voting equity interest held by assignees of
Opicoil Houston, Inc. VICO in its capacity as the Joint Venture
operator conducts exploration and development activities within
the PSC area. The cost of such activities is funded by the Joint
Venture participants. The vote of participants holding 66-2/3
percent of the total ownership is generally required for approval
of significant matters pertaining to the Joint Venture.

Terms of Production Sharing Contract

Under a PSC with Pertamina that was amended and extended in
1990 until August 7, 2018, the Joint Venture is authorized to
explore for, develop, and produce petroleum reserves in an
approximate 1.4 million acre area in East Kalimantan. In
accordance with the requirements of the PSC, during 1991, the
Joint Venture selectively relinquished approximately 10 percent
of the PSC area. The Joint Venture must relinquish 10 percent of
the PSC area by April 23, 1994; 10 percent by August 7, 1998; 10
percent by December 31, 2000; 15 percent by December 31, 2002 and
15 percent by December 31, 2004. However, the Joint Venture is
not required to relinquish any of the PSC area in which oil or
gas is held for production. Additionally, pursuant to the terms
of the PSC, the Joint Venture, having produced 185 million
barrels of oil, paid Pertamina a $5 million non-cost recoverable
bonus in March 1993.

Under the PSC, the Joint Venture participants are entitled
to recover cumulative operating and certain capital costs out of
the crude oil, condensate and gas produced each year, and to
receive a share of the remaining crude oil and condensate
production and a share of the remaining revenues from the sale of
gas on an after-Indonesian tax basis. The method of recovery of
capital costs is a system of depreciation and amortization that
is similar to U.S. tax accounting methods. The share of revenues
from the sale of gas after cost recovery through August 7, 1998
will remain at 35 percent to the Joint Venture after Indonesian
income taxes and 65 percent to Pertamina. The split after August
7, 1998, will be 25 percent to the Joint Venture after Indonesian
income taxes and 75 percent to Pertamina for gas sales under the
1973 and 1981 LNG Sales Contracts, Korean carryover quantities
and the seven 1986 liquefied petroleum gas (LPG) Sales Contracts
(and any extensions thereto) to the extent that the gas to
fulfill these contracts is committed from the Badak or Nilam
fields; after August 7, 1998, all other LNG sales contract
revenues will be split 30 percent to the Joint Venture after
Indonesian income taxes and 70 percent to Pertamina. Based on
current and projected oil production, the revenue split from oil
sales after cost recovery through August 7, 2018 will remain at
15 percent to the Joint Venture after Indonesian income taxes and
85 percent to Pertamina. These revenue splits are based on
Indonesian income tax rates of 56 percent through August 7, 1998
and 48 percent thereafter.

In addition, the Joint Venture is required to sell out of
its share of production 8.5 percent (7.2 percent after August 7,
1998) of the total oil and gas condensate production from the
contract area for Indonesian domestic consumption. The sales
price for the domestic market consumption is $0.20 per barrel
with respect to fields commencing production prior to February
23, 1989. For fields commencing production after that date,
domestic market consumption is priced at 10 percent of the
weighted average price of crude oil sold from such fields.
However, for the first sixty consecutive months of production
from new fields, domestic market consumption is priced at the
official Indonesian Crude Price (ICP). The participants'
remaining oil and condensate production is generally sold in
world markets.

The Joint Venture has no ownership interest in the oil and
gas reserves. The Joint Venture has long-term supply agreements
with Pertamina for the supply of gas and petroleum gas to be
liquefied at a liquefaction plant owned by Pertamina at Bontang
Bay (the LNG Plant) and sold to certain buyers pursuant to sales
contracts. The Joint Venture, other participating production
sharing contractors and Pertamina together market the LNG and the
LPG produced at the LNG Plant and LPG facilities and, as to the
amounts allocable to the PSC, the Joint Venture and Pertamina
divide the net proceeds in accordance with the percentages set
out above.

Payment for LNG and LPG is made in U. S. dollars to a U. S.
bank as trustee for Pertamina, the Joint Venture, other
participating production sharing contractors and lenders that
have provided funds to build the LNG Plant and the LPG
facilities. The LNG Plant's processing costs, principal and
interest payable on borrowings from such lenders, transportation
costs, and certain other miscellaneous costs are deducted from
the gross LNG and LPG sales proceeds. The remaining amount
represents the net proceeds for gas delivered to the LNG Plant
and is divided among Pertamina, the Joint Venture, and the other
production sharing contractors in accordance with the terms of
their respective agreements.

Exploration and Development

From inception in 1972 up to and including December 31,
1993, the following wells were drilled in the East Kalimantan
contract area:

Total Completed
Field Wells Productive Dry Suspended
Location Drilled Wells Holes Wells

Badak 184 174 7 3
Nilam 154 154 - -
Semberah 53 49 4 -
Mutiara 44 37 6 1
Pamaguan 32 26 6 -
Wailawi 6 6 - -
Other 44 8 30 6

Totals 517 454 53 10

Two significant fields, Badak and Nilam, have been
discovered in the East Kalimantan area. The Badak field is in
the northeast portion of the East Kalimantan contract area, and
the Nilam field is located immediately south of the Badak field.
Total Indonesie and Indonesia Petroleum, Ltd. (the Total Group),
who are not parties to the Joint Venture but have interests in
the Nilam and Badak fields, are parties to unitization agreements
with the Joint Venture in both fields. All gas and condensate
from the Badak and Nilam fields and all oil from the Nilam field,
as well as all allowable costs incurred in connection therewith,
are deemed attributable to the Joint Venture and the Total Group
in the ratio of their respective participating interests under
the Badak and Nilam unitization agreements. VICO acts as
operator for the Joint Venture and the Total Group in both
fields. See "Business - The Joint Venture." The Joint Venture
is also producing from four additional fields in the East
Kalimantan area: Pamaguan, Mutiara, Semberah and Wailawi.

The tables below summarize completed exploratory and
development drilling from 1991 through 1993 for the East
Kalimantan contract area.

EXPLORATORY DRILLING

Wells Dry
Year Drilled Discoveries Holes

1991 2 1 1
1992 2 0 2
1993 3 0 3

Totals 7 1 6

DEVELOPMENT OR FIELD EXTENSION DRILLING

Completed
Wells For For For Dual Dry
Year Drilled Gas Oil Oil & Gas Holes

1991 37 30 3 4 -
1992 31 24 5 2 -
1993 31 25 1 3 2

Totals 99 79 9 9 2

Of 454 completed productive wells in the East Kalimantan
contract area, approximately 250 contain more than one completion
in the same bore hole.

Six wells were in progress as of December 31, 1993. This
includes wells that were drilled but not completed at the end of
1993. None of the suspended or "in-progress" wells are included
in the tables above.

The Company's share of the costs of the above wells ranged
from 18.53 percent to 23.125 percent.

The following table sets forth total gas liquefied and sold
as LNG, the Company's net share of such production (calculated on
a million cubic feet equivalency basis as described in Note b
below), average sales prices (excluding transportation costs) and
production (lifting) costs of such production for the years 1991
through 1993.

Years ended December 31, (a)
1993 1992 1991
(Restated)
Gas Production
for LNG (MMCF) (b) 637,847 621,600 579,001

Company's Net Share
(MMCF equivalency) (c) 80,873 77,264 78,598

Average Sales Price
per MCF (d) $2.75 $2.92 $3.07

Average Production (Lifting)
Cost per MCF $0.13 $0.14 $0.15

(a) All amounts appearing in this table are for dry gas. The
1992 and 1991 amounts were previously reported on a wet gas
basis and have been restated as dry gas.

(b) Represents the volumes of LNG delivered and sold to
purchasers which is measured by its British Thermal Unit
(BTU) content and, for purposes of this table, has been
converted to MMCF equivalents based on a ratio of
approximately 3.0 billion cubic feet (BCF) of gas required
at the plant to produce 2.9 trillion BTUs of LNG. The Gas
Production for LNG includes production attributable to
UNOCAL Indonesia Ltd., the Total Group and Pertamina. The
term "MMCF" refers to 1,000,000 cubic feet of gas measured
at 60 degrees Fahrenheit and 14.7 pounds per square inch of
pressure.

(c) The net share figures shown above have been calculated by
dividing the Company's total LNG revenues for each year by
the average price per MCF (in the form of LNG) received by
Pertamina for the sale of LNG during such year. The result
represents the MCF equivalent of the Company's LNG revenues.

(d) The sales price is based on the average sales price
(excluding transportation) per MMBTU of LNG received by
Pertamina. The term "MMBTU" refers to 1,000,000 British
Thermal Units. The sales price per MMBTU has been converted
to a price per MCF based on the conversion ratio referred to
in note (b) above. The term "MCF" refers to 1,000 cubic
feet of gas measured at 60 degrees Fahrenheit and 14.7
pounds per square inch of pressure.

The Company's production costs are small in relation to its
revenues because the Joint Venture's revenues under the LNG
contracts are net of costs associated with transporting and
converting the gas to LNG and shipping the LNG to the purchasers.
The costs, which are considered to be production costs, are those
costs incurred to operate and maintain wells and related
equipment and facilities.

During 1993, the Company's share of the Joint Venture's
expenditures was approximately $59 million, including $5 million
of exploration expenditures and $37 million of development
expenditures. In 1994, the Company's share of the Joint
Venture's expenditures is expected to total $56 million,
including $3 million of exploration expenditures and $35 million
of development expenditures. The 1994 budgeted expenditures
primarily reflect continued development drilling required to
maintain adequate gas deliverability.

Reserves

The Company files no reports which include estimates of oil
or gas reserves with any federal agency other than the Securities
and Exchange Commission.

The estimated proved reserves of gas and of oil and
condensate as of December 31, 1990, 1991, 1992 and 1993
attributable to the Joint Venture's interest in the PSC in East
Kalimantan were prepared by petroleum engineers employed by
LASMO, an affiliate of Ultrastar. Gross proved field reserves
are as follows:

Crude Oil and
Condensate Gas
Total Proved Reserves (000's barrels) (Dry MMCFs)

Dec. 31, 1990 (Gas restated) 149,194 7,294,804
Dec. 31, 1991 (Gas restated) 135,712 7,615,739
Dec. 31, 1992 (Gas restated) 146,055 7,436,171
Dec. 31, 1993 203,068 7,187,995*

* equivalent to approximately 6,966 trillion BTUs.

The Joint Venture, and thus the Company, has no ownership
interest in oil and gas reserves but rather has the right to
receive production and revenues from the sale of oil, condensate,
gas, LNG and LPG in accordance with the PSC and other agreements.

The Company has revised its method of disclosing all proved
and proved developed gas reserves from a wet gas basis to a dry
gas basis. This change has been effected to conform to the
reporting method used by the Company's partners. The Company's
estimates of its net share of proved developed and undeveloped
reserves, as of December 31 of each year since 1990, are included
in the Supplemental Financial Information in Item 8.

LNG Plant

Gas produced from the Joint Venture's interest in the PSC
reserves is liquefied at the LNG Plant, which is owned by
Pertamina and operated on a cost-reimbursement basis by a
corporation in which the Joint Venture owns a 20 percent
interest. The LNG Plant currently consists of six processing
units (trains) having a combined input capacity at year-end 1993
of approximately 2.6 billion cubic feet of gas per operating day
and a production capacity of approximately 626,000 barrels or
99,500 cubic meters of LNG and 28,000 barrels of condensate per
day. The five storage tanks at the LNG Plant have a total
capacity of 3.2 million barrels of LNG. Gas is supplied to the
plant through three pipelines (two 36 inch and one 42 inch) which
are connected to the central gas facilities at the Badak field,
35 miles south of the LNG Plant.

The LNG Plant has been developed in four phases. The
original facility, which consisted of two trains (Trains A and B)
and a dock, was constructed with financing arranged by Pertamina
with the Central Bank of the Republic of Indonesia, a consortium
of Japanese banks and a corporation owned substantially by the
Japanese LNG purchasers, and became fully operational in August
1977. Final payment on the loans was made in the first quarter
of 1990.

Expansion of the LNG Plant from two to four trains (Trains C
and D) was completed in 1983. Funding was arranged by Pertamina
with Japan Indonesia LNG Co., Ltd. (JILCO). Final payment on
this financing arrangement was made in the third quarter of 1993.

A fifth processing train (Train E) was completed in 1989 and
supplies LNG required for the Taiwan LNG Sales Contract with the
Chinese Petroleum Corporation (CPC), the state petroleum
enterprise of the Republic of China (Taiwan). Project financing
was arranged through a trustee borrowing with a consortium of
Japanese banks and is supported by revenues from such sales
contract, as well as in certain limited circumstances by portions
of other revenue streams. The financing contains two tranches,
with tranche A totalling $176.4 million at a fixed interest rate
of 11.5 percent, and tranche B totalling $117.6 million at a
floating interest rate initially of LIBOR plus 1 percent. The
financing is repayable in graduated quarterly payments over ten
years that began in the fourth quarter of 1990.

The sixth processing train (Train F) was completed in
November 1993 and will supply the LNG required for the LNG sales
contract signed in October 1990 with Osaka Gas, Tokyo Gas and
Toho Gas (the Buyers) for the sale of 2,020 trillion BTUs over a
twenty-year period commencing in 1994. In August 1991, Pertamina
and an international consortium of commercial banks completed
project financing of $750 million to fund the construction of
Train F and related support facilities at an interest rate of
LIBOR plus 1.25 percent. Financial support for the financing is
limited to revenues from such sales contract. The financing is
repayable over ten years in graduated quarterly payments
commencing in December 1994. Only $699 million of the $750
million project financing will be required to complete the
construction of Train F and its related support facilities.

As a result of the production performance of Train E,
Pertamina had undertaken modifications to Trains A through D
known as "debottlenecking." Trains C and D were modified in 1992
during regularly scheduled maintenance shutdowns. Likewise,
Trains A and B were modified in 1993 during regularly scheduled
maintenance shutdowns. Capacity tests on all four trains
exceeded design rates such that Trains A through D are now
capable of LNG production rates comparable to the most recently
completed Train F, an increase of 14 percent, or 22 cargoes in
total. The total cost of the Trains A through D debottlenecking
project amounted to $79 million. These costs were funded through
Package IV revenues (See description of Package IV beginning on
page 15).

With the completion of Train F and the debottlenecking
project, the expanded six train plant is expected to have the
capacity to deliver 275 cargoes per year.

LPG Facilities and Second Dock

The LPG processing facilities at the LNG Plant were
constructed concurrently with the fifth processing train. The
LPG facilities were completed in 1988, at a cost of approximately
$158 million. Financing was made available to Pertamina through
a consortium of Japanese banks. A significant portion of the LPG
sales proceeds is dedicated to the financing, which is repayable
through 1999.

A second dock facility at the LNG Plant is used for both LNG
and LPG deliveries. The portion of the second dock costs
attributable to the LPG trade was financed through the same
consortium of Japanese banks that financed the LPG processing
facilities at the LNG Plant. Financing for the LNG portion of
the second dock was provided by a trustee borrowing from Japanese
banks.

The table below sets forth information regarding the status
of the project financings incurred or arranged by Pertamina to
construct the LNG Plant:

Original
Principal/ Balance at Final Primary
Payment December 31, Payment Source of
Financing Amount 1993 Date Repayment
(000's) (000's)

Trains A&B
and 1st
Loading Dock $771,500 $ - - 1973 LNG Sales
Contract

Trains C & D 995,800 - - 1981 LNG Sales
Contract

Train E 294,000 217,560 2000 Taiwan LNG
Sales Contract
Train F and
Support
Facilities (a) 750,000 633,000 2004 Train F LNG
Sales Contract

Misc. Capital
Projects 42,700 - - 1973 LNG Sales
Contract (b)
2nd Loading Dock
& Train E
Support
Facilities 135,000 48,600 1995 1973 LNG Sales
Contract (b)

LPG Facilities 157,700 91,640 1999 LPG Sales
Contract

(a) Total financing required is not expected to exceed $699
million.

(b) Debt service is allocated among all of the gas producers
according to the quantity of gas delivered.

Marketing and Distribution of LNG

Certain information regarding deliveries of LNG from the LNG
Plant is set forth below:

BTUs Average
Number of LNG in Trillions Price Per
Tanker Liftings (Approximate) MMBTU

1991 . . . . . 197 564 $3.16
1992 . . . . . 211 606 $3.00
1993 . . . . . 216 621 $2.82

As a result of variations in LNG tanker capacity among the
various sales contracts, the measure of a net equivalent cargo
has been established. One net equivalent cargo equates to the
quantity of LNG delivered in a 1973 Sales Contract shipment or an
average of 2,942 BBTUs.

The following table sets forth information regarding the LNG
Plant share of the LNG Sales Contracts grouped together by the
Joint Venture's participating percentages in the sales contracts
(each such group being referred to as a "package"):
<PAGE>
<TABLE>
<CAPTION>
Remaining
LNG Sales 1993 Remaining Base LNG Price
Volumes Cargoes Cargoes Per MMBTU (a)
Package and Equity Interest TBTUs Gross/Net Gross/Net 12/31/93 2/25/94
(b) (b)

<S> <C> <C> <C> <C> <C>
Package I - 97.9%
1973 LNG Sales Contract
Term: 1977 - 1999 647 63/60 220/215 $2.30 $2.42

Package II - 66.4%
1981 LNG Sales Contract
Term: 1983 -2003 1,578 57/38 542/356 $2.26 $2.37

Package IIIA - 50%
Korean Carryover Sales
Contract
Term: 1986 - 2006 194 5/2 66/33 $2.30 $2.42

Package IIIB - 29.6%
Taiwan LNG Sales Contract
Term: 1990 - 2009 1,451 29/9 458/146 $2.23 $2.35

Osaka and Toho
Terms: Various ranging from
1987 to 1999 19 7/2 6/2 $2.30 $2.42

Additional 1981 Sales
Contract cargoes
Term: 1990 - 2003 169 5/2 58/17 $2.26 $2.37

Package IV - 27.2% (c)
Train F LNG Sales
Contract 2,389 - 812/222 - $2.24
Term: 1994 - 2013

Korea II LNG Sales
Contract 1,130 - 384/104 - $2.25
Term: 1994 - 2014

Other LNG Sales Contracts
Terms: Various ranging
from 1990 - 2015 986 50/14 718/91 $2.30 $2.42

Totals 8,563 216/127 3,264/1,186

(a) Excludes transportation costs.

(b) The gross amounts represent the LNG Plant's deliveries, the net amounts represent the
Joint Venture's equity in such deliveries.

(c) In early January of 1994, Pertamina and the East Kalimantan producers reached final
agreement on Package IV revenue sharing percentages with the Joint Venture's
interest being 27.2064 percent. Included in 1993 are 1.9 net equivalent cargoes
which represent the adjustment from the interim revenue sharing percentage of 25
percent to the final Joint Venture share for all Package IV deliveries prior to
December 31, 1993.

</TABLE>
<PAGE>
Commencing in 1994, LNG is primarily sold under five long-
term sales contracts between Pertamina and buyers in Japan,
Taiwan and Korea. These contracts are the 1973 LNG Sales
Contract (Package I), the 1981 LNG Sales Contract (Package II),
the Taiwan LNG Sales Contract (included in Package IIIB), the
Train F LNG Sales Contract and the Korea II LNG Sales Contract
(both included in Package IV). The gas processed by the LNG
Plant is supplied from the Joint Venture's contract area as well
as other fields in which the Joint Venture has no interest.

LNG sales contracts and amendments thereto are executed
between Pertamina and the buyers for the sale and delivery of a
fixed quantity of BTUs of LNG at a price that reflects an LNG
element derived from a basket of Indonesian crude oil prices that
is recalculated monthly. A transportation charge is added to the
LNG element under all contracts except for Package II where the
buyers bear the risk of loss and the transportation costs. In
those instances when the seller bears the risk of loss during
shipment, the cargoes are insured. The buyers also bear the risk
of loss and transportation costs for cargoes under the Train F
LNG Sales Contract (included in Package IV), which commenced
deliveries in early 1994.

The LNG to be delivered under the sales contracts is
supplied from the LNG Plant and from a separate facility at Arun
in Sumatra (Arun Plant). The Joint Venture does not supply gas
to the Arun Plant or have any interest in revenues from the sale
of its product. The allocation of contract quantities between
the LNG Plant and the Arun Plant is determined by Pertamina.
Presently, all deliveries under the 1981 LNG Sales Contract
(Package II), the Taiwan LNG Sales Contract (included in Package
IIIB) and the Train F LNG Sales Contract (included in Package IV)
are exclusively supplied by the LNG Plant.

The Joint Venture and other gas producers in this area have
the opportunity to participate in each sales package. The Joint
Venture's equity interest in a sales package is based on its
share of gas reserves available for commitment to the package and
represents the percentage of gross revenues attributable to the
Joint Venture before deducting plant operating costs and debt
service.

In January of 1990, certain of the buyers under the 1973
Sales Contract agreed to increase their purchased commitments
during the years 1997 through 1999 by approximately 667 trillion
BTUs. The LNG Plant will provide 67.1 percent of the additional
quantities and the Arun Plant the remainder. The Joint Venture's
participation percentage for these quantities was finalized at
27.2064 percent in early January of 1994 after agreement with
Pertamina and the East Kalimantan producers.

In October of 1990, Pertamina signed an LNG sales contract
with Osaka Gas, Tokyo Gas, and Toho Gas (Train F LNG Sales
Contract) for the sale of at least 2,020 trillion BTUs over a
twenty-year period commencing in January 1994.

In May of 1991, Pertamina signed an LNG sales contract with
Korea Gas Corporation for the sale of at least 2,044 trillion
BTUs over a twenty-year period commencing in July 1994, at a
price similar to the LNG element of the 1973 LNG Sales Contract.
The LNG Plant will provide 50 percent and the Arun Plant 50
percent of the LNG requirements for the contract. In August of
1991, Pertamina signed a contract with Tokyo Gas for delivery of
six cargoes from the LNG Plant over two years commencing in 1992.
Three of the six cargoes were delivered in 1992 and the remaining
three were delivered in 1993. The contract price is similar to
the 1973 LNG Sales Contract price. The Joint Venture's
participation percentage for these contracts was finalized at
27.2064 percent in early January of 1994 after agreement with
Pertamina and the East Kalimantan producers.

In October and November of 1991, Pertamina signed agreements
with Osaka Gas and Toho Gas to increase deliveries in 1992 and
1993 by 69 cargoes, of which 51 cargoes would be shipped from the
LNG Plant. Of the cargoes to be supplied by the LNG Plant, 25
were shipped in 1992 and the remaining 26 were shipped in 1993.
These contracts were split between Package III and Package IV
sharing percentages.

In December of 1991, Pertamina entered into an LNG sales
contract with several Japanese buyers (the Medium City Gas
Companies) for the sale of 358 trillion BTUs over a twenty-year
period commencing in 1996. The LNG Plant will provide 50 percent
of the LNG requirements for the contract. The Joint Venture's
participation percentage for this contract was finalized at
27.2064 percent in early January of 1994 after agreement with
Pertamina and the East Kalimantan producers.

As a result of the sales agreements entered into by
Pertamina and expected spot sales, the Company anticipates that
the Joint Venture will ship approximately 135 net equivalent
cargoes in 1994.

Other Gas Sales - The Joint Venture is also obligated to
supply approximately 74 MMCF per day of gas to three local
fertilizer plants at a price of $1.00 per MMBTU subject to a
pipeline tariff. In addition, the Joint Venture is required to
supply approximately 5 MMCF per day of gas to the Balikpapan
refinery at a price of $1.49 per MMBTU.

Marketing and Distribution of LPG

Pertamina has individual sales contracts with seven Japanese
utility companies for the sale and delivery of 1,950,000 metric
tons per year of LPG through the year 1998, of which 315,000
metric tons, subject to Pertamina's right to increase or decrease
such amount, will be produced by the LPG facilities at the LNG
Plant. In 1993, 23 cargoes, including spot sales, totaling
453,000 metric tons were shipped to Japan. The first 285,000
metric tons of LPG sold under the contract were sold at the
weighted average price for all LPG imported into Japan, except
Indonesia and Abu Dhabi, plus $3 per ton. The next 168,000
metric tons of LPG were sold at the aforementioned price plus a
premium of $20 to $22 per metric ton. The LPG is extracted from
the LNG stream and stored at facilities at the LNG Plant. Based
on dedicated reserves, the Joint Venture is allocated 29.6
percent of the revenues from the first 385,000 metric tons sold
and 27.2 percent for sales in excess of 385,000 metric tons per
year, after deducting LPG-related operating costs and debt
service.

Marketing of Oil and Condensate

Each party to the Joint Venture and Pertamina are entitled
to take their respective shares of oil and condensate in kind and
to market such shares separately. The Company, through
affiliates of Ultrastar and Unistar, markets its share of oil and
condensate f.o.b. Santan Terminal, in East Kalimantan,
independently of Pertamina and the other Joint Venture
participants. The Santan Terminal (operated by UNOCAL Indonesia
Ltd.) is used for storing and loading oil produced by the Joint
Venture.

The Company's percentage share of the Joint Venture's oil
and condensate, except for that sold to Pertamina for Indonesian
domestic consumption, is sold at ICP. Prior to July 1, 1993, the
price for crude and condensate sales reflected world market
conditions at the time of sale. The sales price for the domestic
market consumption is $0.20 per barrel with respect to fields
commencing production prior to February 23, 1989. For fields
commencing production after that date, domestic market
consumption is priced at 10 percent of the weighted average price
of crude oil sold from such fields. However, for the first sixty
consecutive months of production from new fields, domestic market
consumption is priced at ICP.

Substantially all of the oil and condensate currently being
produced by the Joint Venture from the PSC contract area is being
produced from the Badak, Nilam, Mutiara and Semberah fields. The
Company's average sales prices and production (lifting) costs for
1991 through 1993 are:

Years ended December 31,
1993 1992 1991

Total Oil and
Condensate Sales
(barrels) (a) 20,905,232 18,633,441 15,089,945

Company's Net Share
(barrel equivalency) (a) 1,928,005 1,804,511 1,337,349

Average Sale Price - f.o.b.
Indonesia (per barrel) (b) $18.31 $20.65 $20.59

Average Production (Lifting)
Cost (per barrel) $0.77 $ 0.80 $ 0.84

(a) The total oil and condensate sales include production
attributable to other contractors' shares of unitized
operations in the Badak and Nilam fields. See "Exploration
and Development." The net share figures shown above have
been calculated by dividing the Company's total oil revenues
for each year by the average price per barrel received for
sale of oil during such year. The result represents the
barrel equivalent of the Company's oil revenues.

(b) Excludes domestic consumption sales. Also excluded are
gains or losses incurred on the sale of the Company's share
of oil, which resulted in marketing gains/(losses) of
$(0.32), $(0.02) and $0.07 per barrel in 1993, 1992 and
1991, respectively. Effective July 1, 1993, the Company is
no longer exposed to marketing gains/(losses) incurred on
the sale of its share of oil and condensate.

The Joint Venture's sales of oil and condensate averaged
approximately 48,600 barrels per day (BOPD) during 1993, compared
to approximately 42,700 BOPD during 1992.

Competition and Risks

Indonesian oil competes in the world market with oil
produced from other nations. Indonesia is a member of OPEC, and
any OPEC-imposed restrictions on oil or LNG exports in which
Indonesia participates could have a material adverse effect on
the Company.

In addition to the LNG being sold from the Arun Plant, LNG
plants in the Middle East, Australia, Malaysia, or elsewhere may
provide competition for sales of any additional Joint Venture LNG
to Japanese and other markets, beyond the amount under current
contracts.

The Joint Venture's activities in Indonesia are subject to
risks common to foreign operations in the oil and gas industry,
including political and economic uncertainties, the risks of
cancellation or unilateral modification of contract rights,
operating restrictions, currency repatriation restrictions,
expropriation, export restrictions, increased taxes and other
risks arising out of foreign governmental sovereignty over areas
in which the Joint Venture's operations are conducted. The
Company's foreign operations and investment may also be subject
to the laws and policies of the U. S. affecting foreign trade,
investment and taxation that could affect the conduct and
profitability of those operations.

All of the Company's oil and gas activities are subject to
the risks normally incident to exploration for and production of
oil and gas, including blowouts, cratering and fires, each of
which could result in damage to life and property. Production
from the LNG Plant, which is the source of most of the Company's
revenues, is subject to the risks associated with maintaining and
operating a complex, technologically intensive processing plant,
including the risks of equipment failures, fire and explosion.
To the extent that the seller of the LNG produced by the LNG
Plant bears the risk of loss of cargoes, the seller is subject to
the usual risks of maritime transportation, including adverse
incidents arising from loading and unloading cargoes. In
accordance with customary industry practices, the Company carries
insurance against some, but not all, of these risks. Losses and
liabilities arising from such events would reduce revenues and
increase costs of the Company to the extent not covered by
insurance.

Item 2. Properties

See Item 1. Business.

Item 3. Legal Proceedings

Item 4. Submission of Matters to a Vote of Security Holders

None.

PART II

Item 5. Market for Registrant's Common Equity and Shareholder
Matters

Refer to Item 12 for a description of the Registrant's Equity.

Refer to Item 1 for a description of the Indonesian Participating
Units.

Item 6. Selected Financial Data

The following financial data was derived from the audited
consolidated financial statements of the Company and should be
read in conjunction with the consolidated financial statements
and related notes included elsewhere herein.

1993 1992 1991 1990 1989
(millions of dollars)

Operating revenues $201 $206 $208 $203 $146

Earnings (loss) from
continuing operations 30 24 18 7 (15)

Net earnings 30 24 18 11 11

Total assets 449 472 500 519 608

Debt and security
subject to
mandatory redemption 33 32 31 50 111

See Note 2(e) to Notes to Consolidated Financial Statements.

Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations

Liquidity and Capital Resources

Cash flow from operations amounted to $81.5 million in 1993,
compared to 1992 cash flow of $93.4 million. Capital
expenditures of $40.1 million were primarily spent on continued
development drilling in the Badak, Nilam, Mutiara and Semberah
fields as was the case in 1992. Net capital distributions in
1993 to the partners from the Company were $41.1 million (1992,
$58.2 million).

On January 5, 1994, the Company redeemed its 8-1/4 percent
convertible subordinated guaranteed debentures, originally due in
1995, in the amount of $36.4 million at a loss of $3.1 million.
The redemption was funded through contributions from the partners
of the Company.

The Company's ability to generate cash is primarily
dependent on the prices it receives for the sale of LNG, and to a
lesser extent, the sale of crude oil and LPG. In the event cash
generated from operations is not sufficient to meet capital
investment and other requirements, any shortfall will be funded
through additional cash contributions by the partners. The
Company cannot predict with any degree of certainty the prices it
will receive in 1994 and future years for its crude oil and LNG.
The Company's financial condition, operating results and
liquidity will be materially affected by any significant
fluctuations in sales prices.

LNG sales are made under five principal long-term contracts
and several short- and medium-term contracts with Japanese,
Korean and Taiwanese industrial and utility companies. Sales
pursuant to the fourth long-term contract (Train F LNG Sales
Contract) commenced in the first quarter of 1994; sales under the
fifth long- term contract will commence in July 1994. The long-
term contracts contain take-or-pay provisions that generally
require that the purchasers either take the contracted quantities
or pay for such quantities if not taken; such provisions tend to
support the Company's ability to generate cash. During 1993, 127
net equivalent cargoes were shipped, of which 107 were under
these long-term contracts. In 1994, the Company anticipates
shipping approximately 135 net equivalent cargoes.

The sixth processing train (Train F) was completed in
November 1993 and will supply the LNG required for the fourth
long-term LNG sales contract signed in October 1990 with Osaka
Gas, Tokyo Gas and Toho Gas for the sale of at least 2,020
trillion BTUs over a twenty-year period commencing in 1994.

The debottlenecking of Trains A through D was completed in
1993. Capacity tests on all four trains exceeded design rates
such that the four trains are now capable of LNG production rates
comparable to the recently completed Train F, an increase of 14
percent or 22 cargoes in total.

The Company's operating and capital expenditures are
directed toward the Joint Venture. Capital expenditures of the
Joint Venture relate to the exploration and development of the
oil and gas fields. In 1994, the Company's share of the Joint
Venture expenditures is expected to total $56 million, including
$3 million of exploration expenditures and $35 million of
development expenditures. The 1994 budgeted expenditures
primarily reflect continued development drilling required to
maintain gas deliverability.

The Company can give no assurance as to the future trend of
its business and earnings, or as to future events and
developments that could affect the Company in particular or the
oil industry in general. These include such matters as
environmental quality control standards, new discoveries of
hydrocarbons and the demand for petroleum products. Furthermore,
the Company's business could be profoundly affected by future
events including price changes or controls, payment delays,
increased expenditures, legislation and regulations affecting the
Company's business, expropriation of assets, renegotiation of
contracts with foreign governments, political instability,
currency exchange and repatriation losses, taxes, litigation, the
competitive environment and international economic and political
developments including actions of members of the Organization of
Petroleum Exporting Countries (OPEC).

The Company's revenues are predominately based on the market
price of crude oil, which is denominated in U. S. dollars.
Certain operating costs, taxes and capital costs represent
commitments settled in foreign currency. Currency exchange rate
fluctuations on transactions in currencies other than U. S.
dollars are recognized as adjustments to the U. S. dollar cost of
the transaction.

The Company is unaware of any unrecorded environmental
claims as at December 31, 1993 which would have a material impact
upon the Company's financial condition or operations.

Results of Operations

1993 Compared to 1992

Net earnings for the year 1993 were $30.5 million as
compared to $23.7 million in 1992. Cash flow from operations for
1993 was $81.5 million (1992, $93.4 million).

Oil and gas production revenues for 1993 were $200.6
million, or lower by $5.3 million when compared to 1992 revenues
of $205.9 million. The increase in the Joint Venture's share of
delivered LNG sales volumes was not sufficient to offset a
decline in the average LNG sales price. The quantity of LNG
delivered from the LNG Plant was 621 trillion BTU's (216 cargoes)
in 1993 as compared to 606 trillion BTU's (211 cargoes) in 1992.
The Joint Venture's interest in the LNG delivered was 369
trillion BTU's (127 net equivalent cargoes) in 1993 as compared
to 363 trillion BTU's (124 net equivalent cargoes) in 1992. The
average LNG sales price, excluding transportation charges,
declined to $2.82 per million BTU's in 1993 as compared to $3.00
per million BTU's in 1992. Crude oil sales volumes of 1.93
million barrels were higher by 7 percent in 1993 as compared to
1992's 1.8 million barrels, while the average crude oil realized
sales price of $17.99 per barrel was lower than 1992 by $2.64 per
barrel.

Production costs of $18.8 million were lower than 1992 costs
by about $6.8 million. This improvement in production costs was
caused by a provision included in 1992 related to the Company's
prior years' windfall profits tax liability. After a re-
evaluation of the ultimate exposure on this tax liability, the
Company has reversed $3.5 million as being no longer required.
At the same time, the Company has provided an offsetting amount
for the potential exposure in a royalty dispute.

Depletion , depreciation and amortization of $52.7 million
was lower than 1992 by $4.6 million primarily as a result of a
lower depletion rate associated with the increase in proved
reserves that more than offset the higher level of LNG volumes
delivered.

Exploration costs, including dry holes, of $4.9 million were
lower than 1992 by $4.2 million due to a lower level of seismic
and dry hole costs.

General and administrative expenses of $1.8 million were
$1.0 million lower than last year's $2.8 million due to the
absence of certain non-recurring charges. Both interest expense
and interest income were in line with last year's results. Other
income in 1992 included a non-recurring benefit due to the
favorable disposition of a legal action.

The effective tax rates for 1993 and 1992 were 74 percent
and 78 percent respectively. These rates were the aggregate of
Indonesian source income taxed at a 56 percent rate, and certain
expenses attributable to the Unimar activities which are not
deductible in the partnership.

1992 Compared to 1991

Net earnings for 1992 were $23.7 million as compared to
$18.3 million in 1991. Revenues of $205.9 million in 1992 were
lower by $1.9 million when compared to last year as an increase
in the Joint Venture's share of delivered LNG volumes was not
sufficient to offset a decline in the average LNG price. The
quantity of LNG delivered from the LNG Plant increased to 606
trillion BTUs (211 cargoes) in 1992 from 564 trillion BTUs (197
cargoes) in 1991. The Joint Venture's interest in the LNG
delivered was 363 trillion BTUs (126 net equivalent cargoes) in
1992 as compared to 354 trillion BTUs (123 net equivalent
cargoes) in 1991. The average unit LNG price, excluding delivery
charges, declined to $3.00 per million BTUs in 1992 from $3.16
per million BTUs in 1991. The average realized crude oil price
decreased slightly to $20.63 per barrel in 1992 from $20.64 per
barrel in 1991, while crude oil sales volumes increased 36
percent to 1.8 million barrels.

Production costs of $25.6 million increased $5.0 million and
included an amount related to a proposed adjustment by the U. S.
federal tax authorities relating to the Company's prior years'
windfall profit tax liability.

Depletion, depreciation and amortization of $57.3 million
declined $4.2 million principally as a result of a lower
depletion rate associated with an increase in proved developed
reserves that more than offset the impact of the higher level of
volumes delivered.

Exploration costs of $9.1 million decreased $0.6 million
over last year's costs.

General and administrative expenses of $2.8 million were
$0.3 million lower than last year's level. Interest expense of
$4.7 million declined $5.0 million primarily as a result of the
payoff of an Indonesian Production Payment bank loan in 1991.
Interest income of $0.6 million was $0.7 million lower than 1991
primarily as a result of declining interest rates on short-term
deposits.

Other income of $1.2 million in 1992 principally represented
the reversal of a provision due to a favorable disposition of
certain legal action. In 1991, other (expense) of $0.9 million
was mainly a provision for residual domestic operations costs.

The effective tax rates relating to continuing operations
for the 1992 and 1991 periods were 78 percent and 82 percent
respectively. These rates were the aggregate of Indonesian
source income taxed at a 56 percent rate and certain expenses
attributable to Unimar activities not deductible in the
partnership. The decrease in the effective rate is principally
the result of decreased non-deductible interest expense.

In 1992, the Company adopted Financial Accounting Standards
Board (FASB) Statement No. 109, "Accounting for Income Taxes".
The effect of adopting Statement 109 was to decrease net income
by $0.3 million and $2.6 million for the years ended December 31,
1991 and 1990 respectively. Refer to Note 2(e) of the Notes to
Consolidated Financial Statements for further discussion of the
effects of this adoption.

In 1992, the Company adopted FASB Statement No. 106,
"Employers' Accounting for Postretirement Benefits Other Than
Pensions". The effect of adopting the new rules did not
significantly impact the Company's profits. Postretirement
benefit costs for 1991 and 1990, which were recorded on a cash
basis, have not been restated.

Item 8. Financial Statements and Supplementary Data

REPORT OF INDEPENDENT AUDITORS

To The Partners of
Unimar Company

We have audited the accompanying consolidated balance sheets of
Unimar Company and subsidiaries as of December 31, 1993 and 1992,
and the related consolidated statements of earnings, cash flows
and partners' capital for each of the three years in the period
ending December 31, 1993. Our audits also included the financial
statement schedules listed in the Index at Item 14(a). These
financial statements and schedules are the responsibility of the
Company's management. Our responsibility is to express an
opinion on these financial statements and schedules based on our
audits.

We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.

As more fully described in the notes to the consolidated
financial statements, the Company has material transactions with
its partners and affiliates.

In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the consolidated
financial position of Unimar Company and subsidiaries at December
31, 1993 and 1992, and the consolidated results of their
operations and their cash flows for each of the three years in
the period ended December 31, 1993, in conformity with generally
accepted accounting principles. Also, in our opinion, the
related financial statement schedules, when considered in
relation to the basic financial statements taken as a whole,
present fairly in all material respects the information set forth
therein.

Houston, Texas
February 28, 1994<PAGE>
<TABLE>
UNIMAR COMPANY AND SUBSIDIARIES

Consolidated Balance Sheet
December 31, 1993 and 1992
(Thousands of dollars)

<CAPTION>
1993 1992

<S>
ASSETS
Current assets: <C> <C>
Cash and cash equivalents $ 8,284 $ 6,461
Accounts and notes receivable 11,604 15,931
Inventories 10,886 15,143
Other current assets 2,381 1,051

Total current assets 33,155 38,586

Property, plant and equipment, at cost:
Oil and gas properties
(successful efforts method) 991,901 955,299
Other 3,283 3,431
995,184 958,730

Less: accumulated depreciation and depletion 580,807 528,043
Net property, plant and equipment 414,377 430,687

Other assets 1,252 2,421

$448,784 $471,694

LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Current maturities of long term debt $ 33,292 $ -
Accounts payable 3,229 9,265
Advances from joint venture partners 3,589 2,063
Accrued liabilities 9,314 14,035
Income and other taxes 19,280 22,921
Total current liabilities 68,704 48,284

Long-term debt - 31,818
Deferred income taxes 167,206 170,371
Other liabilities 10,048 7,642

Partners' capital 282,826 293,579
Less: demand notes receivable 80,000 80,000
202,826 213,579

$448,784 $471,694

See accompanying Notes to Consolidated Financial Statements.
</TABLE>

<TABLE>

UNIMAR COMPANY AND SUBSIDIARIES

Consolidated Statement of Earnings
Years ended December 31, 1993, 1992 and 1991
(Thousands of dollars)
<CAPTION>

1993 1992 1991

<S> <C> <C> <C>
Oil and gas production revenues $200,588 $205,897 $207,846

Production costs 18,751 25,600 20,557
Depletion, depreciation and
amortization 52,710 57,275 61,491
Exploration costs including dry holes 4,947 9,066 9,634

Operating profit 124,180 113,956 116,164

General and administrative
expenses (1,778) (2,819) (3,143)
Interest expense (4,542) (4,701) (9,707)
Interest income 309 605 1,330
Other income (expense) 18 1,236 (915)

Earnings before income taxes 118,187 108,277 103,729

Income tax expense (benefit)
Current 90,876 90,121 91,074
Deferred (3,164) (5,520) (5,599)
87,712 84,601 85,475

Net earnings $ 30,475 $ 23,676 $ 18,254

See accompanying Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
UNIMAR COMPANY AND SUBSIDIARIES

Consolidated Statement of Cash Flows
Years ended December 31, 1993, 1992 and 1991
(Thousands of dollars)

<CAPTION>
1993 1992 1991

<S> <C> <C> <C>
Net earnings $ 30,475 $ 23,676 $ 18,254
Adjustments to reconcile to net cash
provided by operating activities:
Depletion, depreciation and
amortization 53,087 57,622 61,805
Deferred income taxes (3,164) (5,520) (5,599)
Exploratory dry hole costs 3,365 6,444 9,201
Interest accretion 1,473 1,294 1,130
LNG price refund - - (212)
(Increase) Decrease in operating
receivables 4,327 (6,153) 3,756
(Increase) Decrease in inventories 4,257 4,372 (4,368)
Increase (Decrease) in operating
payables and accruals (14,526) 10,880 (13,525)
Increase in other operating assets
and liabilities 2,245 789 854
Other - - (32)

Net cash provided by operating
activities 81,539 93,404 71,264

Investment activities:
Capital expenditures (40,142) (39,217) (55,849)

Net cash used in investing activities (40,142) (39,217) (55,849)

Financing activities:
Capital contributions (distributions) -
net (41,100) (58,240) 62,110
Debt repaid - - (78,925)
Redemption of ENSTAR Indonesia, Inc.
participating preferred stock - - (1,375)

Net cash used in financing activities (41,100) (58,240) (18,190)

Increase (Decrease) in advances from
joint venture partners 1,526 165 (3,268)

Net increase (decrease) in cash and
cash equivalents 1,823 (3,888) (6,043)

Cash and cash equivalents at beginning
of year 6,461 10,349 16,392

Cash and cash equivalents at end
of year $ 8,284 $ 6,461 $ 10,349

IPU distributions paid $ 17,569 $ 17,352 $ 19,139

Interest paid $ 3,072 $ 3,405 $ 7,613

Income taxes paid $ 88,787 $ 83,473 $ 98,015

See accompanying Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
UNIMAR COMPANY AND SUBSIDIARIES

Consolidated Statement of Changes in Partners' Capital
Years ended December 31, 1993, 1992 and 1991
(Thousands of dollars)
<CAPTION>

Ultrastar Unistar,
Inc. Inc. Total

Balance, January 1, 1991 $117,773 $129,032 $246,805

Contributions 33,055 33,055 66,110

Cash distributions (2,000) (2,000) (4,000)

Redemption of subsidiary's
preferred stock 1,253 1,254 2,507

ENSTAR pension liability
adjustment (658) (659) (1,317)

Net earnings 9,127 9,127 18,254

Balance, December 31, 1991 158,550 169,809 328,359

Contributions 7,480 7,480 14,960

Cash distributions (36,600) (36,600) (73,200)

ENSTAR pension liability
adjustment (108) (108) (216)

Net earnings 11,838 11,838 23,676

Balance, December 31, 1992 141,160 152,419 293,579

Contributions 13,550 13,550 27,100

Cash distributions (34,100) (34,100) (68,200)

ENSTAR pension liability
adjustment (64) (64) (128)

Net earnings 15,238 15,238 30,476

Balance, December 31, 1993 $135,784 $147,043 $282,827

See accompanying Notes to Consolidated Financial Statements.

/TABLE
<PAGE>
UNIMAR COMPANY AND SUBSIDIARIES

Notes to Consolidated Financial Statements
(in thousands of dollars unless otherwise indicated)

(1) THE COMPANY

Unimar Company (the Company) is a general partnership
organized under the Texas Uniform Partnership Act, whose
partners are Unistar, Inc., a Delaware corporation and a
direct subsidiary of Union Texas Petroleum Holdings, Inc.
(UTPH), a Delaware corporation, and LASMO (Ustar), Inc.
(Ultrastar), a Delaware corporation and an indirect wholly-
owned subsidiary of LASMO plc (LASMO), a public limited
company organized under the laws of England. Each partner
shares equally in the Company's net earnings, distributions
and capital contributions.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Presentation

The Company's consolidated financial statements include
the accounts of the Company and its subsidiaries
including its proportionate share of the activities of
an Indonesian joint venture (the Joint Venture). All
significant intercompany accounts and transactions have
been eliminated.

(b) Inventories

Inventories primarily consist of materials and supplies
and are generally priced at the lower of cost (moving
average cost method) or net realizable value.

Oil and gas exploration, development and production
activities are accounted for by the successful efforts
method of accounting. Under this method of accounting,
the cost of acquiring undeveloped oil and gas leasehold
acreage, including lease bonuses, brokers' fees and
other related costs are capitalized. Provisions for
impairment of undeveloped oil and gas leases are based
on periodic evaluation and exploratory experience.
Costs to drill and equip exploratory wells that find
proved reserves are capitalized while costs associated
with unsuccessful exploratory wells are expensed.
Other exploratory expenditures, including geological
and geophysical costs and annual lease rentals are
expensed as incurred. Costs incurred to drill and equip
productive wells, including development dry holes and
related production facilities are capitalized.

UNIMAR COMPANY AND SUBSIDIARIES

Notes to Consolidated Financial Statements (continued)
(in thousands of dollars unless otherwise indicated)

Depreciation, depletion, and amortization of successful
oil and gas exploration wells and all development costs
are determined under the unit-of-production method
based on estimated recoverable proved developed
reserves. Leasehold costs of producing properties are
depleted on the unit-of-production method based on
estimated proved developed and undeveloped reserves.

The Company generally provides for depreciation of
other property, plant and equipment on a straight-line
method over the estimated useful life of the assets.
The range of rates used to calculate depreciation is 2-
1/2 percent to 11 percent on buildings and 3 percent to
33-1/3 percent for other property items.

(d) LNG Revenue Recognition

The Company recognizes its share of liquefied natural
gas (LNG) revenues net of Pertamina's plant operating
costs, transportation charges and project debt service.

(e) Income and Other Taxes

The Company is a partnership and, therefore, does not
pay income taxes. Since the Company's subsidiaries are
corporations, income taxes included in the accompanying
financial statements represent the domestic and foreign
taxes applicable to such entities.

The Company's subsidiary, ENSTAR Corporation (ENSTAR),
and its subsidiaries file a consolidated Federal
corporate income tax return.

Certain income and expense items are recorded during
different periods for financial statement and income
tax purposes. Deferred income taxes are provided for
these differences.

UNIMAR COMPANY AND SUBSIDIARIES

Notes to Consolidated Financial Statements (continued)
(in thousands of dollars unless otherwise indicated)

(e) Income and Other Taxes (continued)

The Company follows the Statement of Financial
Accounting Standards No. 109 (Statement 109),
"Accounting for Income Taxes." Under Statement 109,
the liability method is used in accounting for income
taxes. Under this method, deferred tax assets and
liabilities are determined based on differences between
financial reporting and tax bases of assets and
liabilities and are measured using the enacted tax
rates and laws that will be in effect when the
differences are expected to reverse. An impairment
evaluation, with reserves recorded as necessary for any
tax benefit not expected to be realized, is required of
deferred tax assets. A current tax expense or benefit
is recognized for estimated taxes payable or refundable
on tax returns for the current year.

(f) Concentrations of Credit Risk

Financial instruments which may subject the Company to
concentrations of credit risk consist principally of
short-term investments and trade receivables. The
Company's excess cash is invested in time deposits with
major banks. Thesedeposi ts are purchased at a
maturity of three months or less, and have minimal
risk.

The Company's receivables consist primarily of the
revenues derived from the sale of LNG under long-term
contracts with utility and industrial companies in
Japan, Taiwan and Korea. The buyers of the LNG make
payment in United States dollars to a U.S. bank as
trustee for the Joint Venture and other parties. The
trustee, after deducting plant operating costs,
transportation charges and project debt service from
the gross LNG sales proceeds, distributes the net
proceeds to the Joint Venture participants and other
parties. The Company's trade receivables at December
31, 1993 result principally from sales of LNG and oil
and are considered current and collectible, and
collateral is not required to secure such receivables.

UNIMAR COMPANY AND SUBSIDIARIES

Notes to Consolidated Financial Statements (continued)
(in thousands of dollars unless otherwise indicated)

(g) Fair Value of Financial Instruments

The Company has various types of financial instruments
consisting of cash and cash equivalents, accounts
receivable, accounts payable, and accrued liabilities.
The carrying amount approximates fair value because of
the short maturity of these instruments.

(h) Foreign Currency

The functional currency for translating the accounts of
foreign subsidiaries is the U. S. dollar. Transaction
gains and losses resulting from the effect of exchange
rate fluctuations on transactions in currencies other
than the functional currency are included in the
determination of net income.

(3) INDONESIAN OIL AND GAS PROPERTIES

The Company, through its subsidiaries, has a 23.125 percent
interest in, and is the operator of, the Joint Venture that
has certain oil and gas exploration and production rights in
Indonesia through a Production Sharing Contract (PSC) which
was amended and extended in 1990 until August 7, 2018 with
Pertamina, the state petroleum enterprise of the Republic of
Indonesia.

Virginia Indonesia Company (VICO), a subsidiary of the
Company, is the operator of the Joint Venture and is
responsible for conducting exploration and development
activities within the PSC area. The cost of such activities
is funded by the Joint Venture partners to VICO. In
addition to operating management responsibility, the
operator acts as a custodian of Joint Venture cash received
from its partners until disbursed in payment of operating
and capital expenditures. At December 31, 1993 and 1992,
cash and cash equivalents included $3,589 and $2,063,
respectively, advanced from the other Joint Venture
partners.

UNIMAR COMPANY AND SUBSIDIARIES

Notes to Consolidated Financial Statements (continued)
(in thousands of dollars unless otherwise indicated)

(3) INDONESIAN OIL AND GAS PROPERTIES (continued)

In addition, other subsidiaries of UTPH and LASMO each own a
26.25 percent interest in the Joint Venture. The PSC
permits the Joint Venture to recover their costs of
exploration, development and production - including general
and administrative expenses - from oil and gas revenues as
follows: capital costs are based on recoverable double-
declining balance depreciation over various useful lives,
which average fourteen years; non-capital costs are
recovered in the year incurred. The Joint Venture, and thus
the Company, has no ownership interest in oil and gas
reserves but rather receives revenues from the sale of oil,
condensate, LPG and LNG in accordance with the PSC. The
Joint Venture is required to sell out of its share of
production 8.5 percent (7.2 percent after August 7, 1998) of
the total oil and gas condensate production from the
contract area for Indonesian domestic consumption. Such
amounts were purchased for domestic use in 1993, 1992 and
1991. The sales price for the domestic market consumption
is $0.20 per barrel with respect to fields commencing
production prior to February 23, 1989. For fields
commencing production after that date, domestic market
consumption is priced at 10 percent of the weighted average
price of crude oil sold from such fields. However, for the
first sixty consecutive months of production from new
fields, domestic market consumption is priced at the
official Indonesian crude price. The Semberah field which
commenced production in December 1991 is exempt from the
domestic obligation pricing until December 1996. In
addition, the share of revenues from the sale of gas after
cost recovery through August 7, 1998, will remain at 35
percent to the Joint Venture after Indonesian income taxes
and 65 percent to Pertamina. The split after August 7,
1998, will be 25 percent to the Joint Venture after
Indonesian income taxes and 75 percent to Pertamina for gas
sales under the 1973 and 1981 LNG Sales Contracts, Korean
carryover quantities and seven 1986 LPG Sales Contracts to
the extent that the gas to fulfill these contracts is
supplied from the Badak or Nilam fields; after August 7,
1998, all other LNG sales contract revenues will be split 30
percent after Indonesian income taxes to the Joint Venture
and 70 percent to Pertamina. Based on current and projected
oil production, the revenue split from oil sales after cost
recovery through August 7, 2018, will remain at 15 percent
to the Joint Venture after Indonesian income taxes and 85
percent to Pertamina. These revenue splits are based on
Indonesian income taxes of 56 percent through August 7,
1998, and 48 percent thereafter.

UNIMAR COMPANY AND SUBSIDIARIES

Notes to Consolidated Financial Statements (continued)
(in thousands of dollars unless otherwise indicated)

(3) INDONESIAN OIL AND GAS PROPERTIES (continued)

Pertamina currently sells liquefied natural gas to Japanese,
Korean and Taiwanese utility and industrial customers
primarily under five long-term contracts that expire in
1999, 2003, 2009, 2013 and 2014, respectively. Contracted
sales of LNG to these customers approximated 73 percent, 75
percent, and 74 percent of the Company's revenues in 1993,
1992 and 1991, respectively.

Pertamina began deliveries of gas in the first quarter of
1994, under the terms of a new twenty-year gas contract with
certain Japanese buyers. The contract calls for delivery of
at least 2,020 trillion BTUs which will settle among the
East Kalimantan producers as a Package IV contract. During
1994, the Company expects the Joint Venture to deliver
approximately 106 trillion BTUs in 36 cargoes or 9.8 net
equivalent cargoes.

Pertamina will begin deliveries of gas in July 1994, under
the terms of a new twenty-year gas contract with Korea Gas
Corporation. The contract calls for delivery of at least
2,044 trillion BTUs of which the Bontang LNG Plant will
supply 50 percent of the contracted volumes and will settle
among the East Kalimantan producers as a Package IV
contract. During 1994, the Company expects the Joint
Venture to deliver approximately 56 trillion BTUs in 19
cargoes or 5.2 net equivalent cargoes.

(4) CASH AND CASH EQUIVALENTS

At December 31, 1993 and 1992, cash and cash equivalents
includes short-term deposits and highly liquid debt
instruments, purchased at a maturity with three months or
less, of $8,284 and $6,461, respectively.

<PAGE>
UNIMAR COMPANY AND SUBSIDIARIES

Notes to Consolidated Financial Statements (continued)
(in thousands of dollars unless otherwise indicated)

(5) PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment is as follows:

1993 1992

Oil and gas producing properties
Proved properties $991,447 $954,055
Uncompleted wells in progress 454 1,244
991,901 955,299
Less: Accumulated depletion 579,860 527,150
412,041 428,149

Other, net of accumulated depreciation
of $947 in 1993 and $893 in 1992 2,336 2,538

$414,377 $430,687

(6) ACCRUED LIABILITIES

As at December 31, 1993 and 1992, accrued liabilities
consisted of:

1993 1992

Accrued IPU liability $ 4,804 $ 5,219
Indonesian operating accruals 2,358 7,148
Other 2,152 1,668

$ 9,314 $14,035

(7) INCOME AND OTHER TAXES

At December 31, 1993, the Company had investment tax credit
carryovers of $3,524 that expire in 1995 through 2001, net
foreign tax credit carryovers of $22,985 for regular tax
purposes expiring in 1998 and $106,481 for alternative
minimum tax purposes expiring in 1998. The Company has a
minimum tax credit of $12,938 that carries forward
indefinitely. Deferred tax assets of $22,985 and $19,674
for foreign tax credit carryforwards and $3,524 and $3,800
for investment tax credit carryforwards at December 31, 1993
and 1992, respectively, have been offset by a valuation
allowance.

UNIMAR COMPANY AND SUBSIDIARIES

Notes to Consolidated Financial Statements (continued)
(in thousands of dollars unless otherwise indicated)

(7) INCOME AND OTHER TAXES (continued)

Deferred income taxes reflect the net tax effects of
temporary differences between the carrying amounts of assets
and liabilities for financial reporting purposes and the
amounts used for income tax purposes. Significant
components of the Company's deferred tax liabilities and
assets as of December 31, 1993 and 1992 are as follows:

1993 1992

Deferred tax liabilities:

Oil and gas proven property costs
capitalized for financial purposes
and deducted for foreign taxes $167,206 $170,371

For financial reporting purposes, income before income taxes
includes the following components:

1993 1992 1991

Pretax income:
U. S. $ (7,026) $(12,089) $ (7,083)
Foreign 125,213 120,366 110,812

$118,187 $108,277 $103,729

Significant components of the provision for income taxes
attributable to continuing operations are as follows:

1993 1992 1991

Current:
Federal $ 2,446 $ 2,942 $ 2,600
Foreign 88,430 87,179 88,474
$90,876 $90,121 $91,074

Deferred:
Federal $ - $ - $ -
Foreign (3,164) (5,520) (5,599)
$(3,164) $(5,520) $(5,599)

UNIMAR COMPANY AND SUBSIDIARIES

Notes to Consolidated Financial Statements (continued)
(in thousands of dollars unless otherwise indicated)

(7) INCOME AND OTHER TAXES (continued)

The reconciliation of income tax attributable to continuing
operations computed at the U.S. federal statutory rates to
income tax expense is:

1993 1992 1991

Tax at U.S. Statutory Rate 35.0% 34.0% 34.0%

Foreign statutory tax rate
in excess of federal
statutory tax rate 21.0% 22.0% 22.0%

Expenses not deductible in
calculating Indonesian
taxes 12.8% 13.1% 20.1%

Unutilized domestic book
losses 2.1% 3.8% 2.3%

Domestic income taxed at
less than foreign statutory
rate 1.2% 2.5% 1.5%

U.S. taxes related to
foreign operations 2.1% 2.7% 2.5%

Total 74.2% 78.1% 82.4%

The Internal Revenue Service (IRS) is continuing its
examination of ENSTAR's 1984 Windfall Profits Tax (WPT)
return. On January 14, 1993, ENSTAR received the report of
the WPT examination changes for the year 1984. In that
report, the agent has proposed adjustments which could, if
sustained, result in additional WPT of approximately $4
million. The IRS has not yet assessed interest on the tax
deficiency which would be due as a result of the assessment.
ENSTAR has prepared a protest vigorously objecting to
certain of the proposed adjustments. The IRS is currently
reviewing the protest. ENSTAR believes that any tax
liability, and interest assessment which may arise as a
result of the WPT examination has been adequately provided
for in the financial statements.

UNIMAR COMPANY AND SUBSIDIARIES

Notes to Consolidated Financial Statements (continued)
(in thousands of dollars unless otherwise indicated)

(8) INDONESIAN PARTICIPATING UNITS (IPUs)

The IPUs were issued, with no assigned value, in connection
with the acquisition of ENSTAR in 1984 and represent a
general obligation of the Company to make quarterly
participation payments until September 1999, the amount of
which will be measured by a fixed percentage of Net Cash
Flow (as defined below) from the Joint Venture. While the
amount of the Participation Payments, which are treated as
reductions from revenues, will vary quarter to quarter
depending upon the amount of Net Cash Flow, payment of the
amounts due to the IPU holders is an obligation of the
Company, not dependent upon the discretion of the partners
of the Company. The rights of the IPU holders are those of
a general creditor of the Company and thus the IPU holders
have no equity interest in the Company in the nature of a
general or limited partnership interest or otherwise. The
IPU holders derive no economic benefit from the business
activities of the Company other than the Joint Venture.

Each IPU entitles the holder to receive, until 1999, a
quarterly participation payment equal to 1/14,077,747 of 32
percent of net positive cash flow. Net Cash Flow,
attributable to IPU holders, is equal to the product of (i)
a fraction, the numerator of which is equal to the number of
IPUs outstanding on the last business day of such quarterly
period, and the denominator of which is 14,077,747,
multiplied by (ii) 32 percent of specified revenues net of
specified expenditures from the Joint Venture. The above
calculation was the result of negotiations among the parties
to the 1984 merger of ENSTAR Corporation into the Company
and represents the amount of future income from the Joint
Venture that the Company has agreed to pay to the former
stockholders of ENSTAR in the form of payments on the IPUs.
If Net Cash Flow is zero or negative for any quarterly
period, no Participation Payments for that quarter will be
made. The Company maintains an irrevocable letter of credit
for the benefit of the IPU holders in an amount equal to 240
percent of the most recent quarterly distribution. At
December 31, 1993 and 1992, there were 10,778,590 IPUs
issued and outstanding.

<PAGE>

UNIMAR COMPANY AND SUBSIDIARIES

Notes to Consolidated Financial Statements (continued)
(in thousands of dollars unless otherwise indicated)

Calculation of Net Cash Flow and
Participation Payments

1993 1992

Positive cash flow:

Gas receipts $175,840 $185,006
Oil and condensate receipts 34,741 36,448
Other non-revenue cash receipts from
Joint Venture 9,799 6,712

Total positive cash flow 220,380 228,166

Less negative cash flow:

Expenditures to Joint Venture 66,184 65,425
Indonesian income taxes 85,401 87,815

Total negative cash flow 151,585 153,240

Net positive cash flow from 23.125%
interest in Joint Venture $ 68,795 $ 74,926

Net cash flow for benefit of IPU holders $ 16,922 $ 18,312

Participation Payment per unit $ 1.57 $ 1.70

UNIMAR COMPANY AND SUBSIDIARIES

Notes to Consolidated Financial Statements (continued)
(in thousands of dollars unless otherwise indicated)

(9) LONG-TERM DEBT

Long-term debt, excluding current maturities, consists of
the following:

1993 1992
8-1/4% convertible subordinated
guaranteed debentures, due 1995 $ - $ 31,818

The 8-1/4% convertible subordinated guaranteed debentures,
due in December 1995, were reclassed to Current liabilities
as these debentures were repaid on January 5, 1994 in the
principal amount of $36,400. The loss on redemption of
$3,108 on these debentures will be recognized in the first
quarter of 1994.

(10) BENEFIT PLANS

VICO has a defined contribution retirement plan that covers
its eligible employees. Although VICO expects to provide
an annual contribution based on a percentage of each
eligible employee's salary, the actual contribution is
determined at the end of each year by its Board of
Directors and may vary depending upon circumstances.
Defined contribution pension expense is funded by the Joint
Venture participants and the Company's share of such
expense for the years ended December 31, 1993, 1992 and
1991 was $263, $200 and $168, respectively.

In addition, VICO provides severance pay to its employees
based upon salary and length of service. Such severance
pay is accrued over the service life of the employees and
is funded by the Joint Venture. The Company has provided
approximately $.2 million, $1.4 million and $1.8 million
for the years ended December 31, 1993, 1992 and 1991,
respectively for its share of future severance payments.

The Company has a defined benefit pension plan established
by ENSTAR that covers ENSTAR's former employees who are
considered terminated and fully vested. ENSTAR's pension
funding policy is to contribute an amount meeting the
requirement of the Employees Retirement Income Security
Act. The estimated reconciliation of the funded status of
ENSTAR's pension plan as at December 31, 1993, 1992 and
1991 respectively is as follows:
<PAGE>
UNIMAR COMPANY AND SUBSIDIARIES

Notes to Consolidated Financial Statements (continued)
(in thousands of dollars unless otherwise indicated)

(10) BENEFIT PLANS (continued)

1993 1992 1991
Actuarial present value of:

Vested accumulated benefit
obligation $(17,763) $(16,913) $(16,934)

Projected vested benefit
obligation $(17,763) $(16,913) $(16,934)
Fair value of plan assets 14,902 14,353 14,249

Unfunded projected benefit
obligation (2,861) (2,560) (2,685)
Unrecognized net
loss 1,661 1,533 1,317
Unrecognized net transition
obligation 872 907 941
Adjustment required to
recognize minimum
liability (2,533) (2,440) (2,258)

Accrued pension cost
recognized in the
Consolidated Balance
Sheet $ (2,861) $ (2,560) $ (2,685)

The minimum liability that must be recognized is equal to
the excess of the accumulated benefit obligation over the
fair value of plan assets. A corresponding amount is
recognized as either an intangible asset or a reduction to
Partners' Capital. A reduction of Partners' Capital is
required at December 31, 1993, 1992 and 1991 since the
intangible asset recognized may not exceed the amount of
unrecognized prior service cost.

The pension expense for 1993, 1992 and 1991 is composed of
the following:

1993 1992 1991

Interest cost $ 1,300 $ 1,303 $ 1,207
Expected return on plan
assets (1,107) (1,108) (1,060)
Net amortization and deferral 35 35 35
$ 228 $ 230 $ 182
<PAGE>
UNIMAR COMPANY AND SUBSIDIARIES

Notes to Consolidated Financial Statements (continued)
(in thousands of dollars unless otherwise indicated)

(10) BENEFIT PLANS (continued)

The assumed rate of return used in determining the projected
benefit obligation was 7.5 percent, 8 percent and 8 percent
for 1993, 1992 and 1991, respectively. The assumed long-
term rate of return on plan assets was 8 percent, 8 percent
and 9 percent for 1993, 1992 and 1991. Plan assets are
invested in equity and fixed income securities.

(11) OTHER POSTRETIREMENT BENEFITS

In 1992, the Company adopted FASB Statement No. 106,
"Employers' Accounting for Postretirement Benefits Other
Than Pensions". The effect of adopting the new rules did
not significantly impact the Company's profits.
Postretirement benefit costs for 1991 which were recorded on
a cash basis have not been restated.

(12) REDEMPTION OF PARTICIPATING PREFERRED STOCK OF ENSTAR
INDONESIA, INC.

On March 12, 1991, ENSTAR Indonesia, Inc. redeemed all of
its 1,297,431 outstanding shares of participating preferred
stock, $.01 par value, at an aggregate cost of $1,842 or
$1.42 per share. The aggregate cost included $467 ($.36 per
share) for the semi-annual dividend for the period ending
December 31, 1990 and $1,375 ($1.06 per share) for the stock
redemption. Partners' capital was credited $2,507 for the
excess of the book value of the preferred stock over the
redemption amount.

(13) CLAIMS AND LITIGATION

The Company has pending litigation arising in the ordinary
course of its business. However, none of the litigation is
expected to have a material adverse effect on the Company's
financial position or results of operations. The Company
also has established a reserve of $3.5 million for potential
exposure in a royalty dispute. The Company believes it may
have valid defenses against such claims.

UNIMAR COMPANY AND SUBSIDIARIES

Notes to Consolidated Financial Statements (continued)
(in thousands of dollars unless otherwise indicated)

(14) RELATED PARTY TRANSACTIONS

All aspects of the Company's business that are not
associated with the operating management of the Joint
Venture, such as operations, legal, accounting, tax and
other management functions are supplied by employees of the
partners in accordance with management agreements negotiated
among the parties. For the years 1993, 1992 and 1991, the
charges approximated $500, $600 and $800, respectively.

The Company holds demand notes in the amount of $40,000 from
or guaranteed by affiliates of each partner. These funds
will be made available to the Company if additional working
capital is required.

As operator of the Joint Venture, VICO performs services
for the operator of the LNG Plant, P.T. Badak Natural Gas
Liquefaction Company (P.T. Badak). During the years ended
December 31, 1993 and 1992, VICO charged P.T. Badak
approximately $1.5 million and $1.8 million, respectively,
principally for field pipeline maintenance services. Also,
during the same periods, VICO billed P.T. Badak
approximately $32 million and $41 million, respectively, for
engineering services and costs incurred on P.T. Badak's
behalf. The costs include approximately $7.2 million in
1993 and $17.2 million in 1992 relating to the modifications
of Trains A through D at the LNG Plant. Accounts receivable
from P.T. Badak approximated $3.3 million and $3.0 million
at December 31, 1993 and 1992, respectively.

UNIMAR COMPANY AND SUBSIDIARIES

SUPPLEMENTAL FINANCIAL INFORMATION (Unaudited)

The following items are contained in this section:

(a) Indonesian oil and gas operations
(b) Interim financial data

(a) INDONESIAN OIL AND GAS OPERATIONS

The Company's estimated net share of Indonesian oil and gas
reserves is shown in Table 1. The estimated proved reserves
of gas and oil and condensate as of December 31, 1993, 1992
and 1991 attributable to the Joint Venture's interest in the
production sharing contract in East Kalimantan were prepared
by petroleum engineers employed by LASMO, an affiliate of
Ultrastar.

Net share estimates are the Company's present best estimates
of the share of proved Indonesian reserves attributable to
revenue the Company would receive, before Indonesian income
taxes, under the terms of the Production Sharing Contract,
as extended through August 7, 2018 based upon assumptions
regarding levels of Joint Venture expenditures over the life
of the project, oil and gas prices, firm contract sales
commitments and potential sales opportunities and upon
numerous other assumptions. The Company has no ownership
interest in the Indonesian reserves in place, but rather
shares in production and revenue from the sale of oil,
condensate, LPG and LNG in accordance with the Production
Sharing Contract. The reserve estimates are subject to
revision as prices fluctuate due to the cost recovery
feature for field and other operating costs under the
Production Sharing Contract and for changes in the
Indonesian income tax rate. Because of the number and range
of these variables, no representation can be made that the
net share estimates set forth below are accurate, and any
changes in such variables will impact such estimates and the
cash flows the Company may realize in the future.

Oil and gas reserves are considered proved if economic
producibility is supported by either actual production or
conclusive formation tests. Proved developed reserves are
reserves that can be expected to be recovered through
existing wells with existing equipment and operating
methods. Proved undeveloped reserves are reserves that are
expected to be recovered from new wells on undrilled acreage
or from existing

INDONESIAN OIL AND GAS OPERATIONS (continued)

wells where a relatively significant expenditure is required
to permit production. These estimates do not include
reserves which may be found by extension of proved areas,
reserves which have been estimated considering known
geological and seismic data and previous experience with
similar reservoirs, or reserves recoverable by secondary or
tertiary recovery methods unless these methods are in
operation and showing successful results. These estimates
include reserves that are not currently under contract, but
which management expects may be marketed during the
remaining period in which the Company has the right to
produce such reserves, but for which there is no assurance
of sales. Estimates of reserves require extensive judgments
of reservoir engineering data and are generally less precise
than other estimates used in connection with financial
reporting. Actual future revenues from proved reserves
estimates may vary significantly from estimated future cash
flows due to changes in prices of oil and gas, and in the
timing of actual production in future periods. Actual
production and development costs will vary from those
estimated due to inflation and other factors.

<PAGE>
INDONESIAN OIL AND GAS OPERATIONS (continued)

TABLE 1

Quantities of Oil and Gas Reserves
(Oil in Thousands of BBLS; Gas in MMCF)

Oil Gas (a)

Proved Developed and Undeveloped
Reserves:

As of December 31, 1990 9,976 1,026,498

Revisions to previous estimates 2,503 66,027

Production (1,329) (81,144)

As of December 31, 1991 11,150 1,011,381

Revisions to previous estimates 1,874 98,117

Production (1,736) (83,158)

As of December 31, 1992 11,288 1,026,340

Revisions to previous estimates 4,044 133,820

Production (1,778) (84,920)

As of December 31, 1993 13,554 1,075,240

Proved Developed Reserves:

As of December 31, 1990 8,450 552,257

As of December 31, 1991 8,792 656,546

As of December 31, 1992 7,632 733,354

As of December 31, 1993 10,281 727,536

(a) Amounts for years prior to 1993 have been restated from a
wet gas basis to a dry gas basis.

INDONESIAN OIL AND GAS OPERATIONS (continued)

Table 2 shows costs incurred in oil and gas property acquisition,
exploration and development activities.

TABLE 2

Costs Incurred in Oil and Gas Property Acquisition,
Exploration and Development Activities
Years ended December 31, 1993, 1992 and 1991
(Thousands of dollars)

1993 1992 1991

Exploration costs $ 5,223 $ 7,193 $11,503
Development costs 36,328 34,407 43,269

Table 3 shows results of operations for oil and gas producing
activities.

TABLE 3

Results of Operations for Oil and Gas Producing Activities
Years ended December 31, 1993, 1992, and 1991
(Thousands of dollars)

1993 1992 1991

Revenues $200,581 $205,847 $207,846

Production costs 17,836 19,068 20,557

Exploration costs 4,947 9,066 9,634

Depreciation, depletion
and amortization 52,710 57,275 61,491

Income tax expense 87,640 81,386 82,804

Results of operations for
producing activities (1) $ 37,448 $ 39,052 $ 33,360

(1) Excludes corporate overhead and interest costs.
<PAGE>
INDONESIAN OIL AND GAS OPERATIONS (continued)

Table 4 shows a standardized measure of discounted future
net cash flows and changes therein relating to proved oil and gas
reserves using an annual discount of 10 percent and the Company's
net share estimates referred to in the preface to Table 1.
Generally, estimated future cash inflows have been computed by
applying year-end prices of oil and gas to estimated future
production of proved oil and gas reserves. Future development
and production costs have been computed by estimating the future
expenditures (based on year-end costs) to be incurred in
developing and producing the proved reserves, assuming
continuation of existing economic conditions. Future income tax
expenses have been calculated by using the year-end statutory tax
rate for Indonesia of 56 percent through August 7, 1998 and 48
percent thereafter. Indonesian net cash flow estimates are the
Company's present best estimates of the share of future net
revenues, after Indonesian taxes and capital and operating
contributions to the Joint Venture, that the Company would
receive if proved reserves are produced under the terms of the
Production Sharing Contract, as extended, based upon assumptions
regarding levels of Joint Venture expenditures over the life of
the project, firm contract sales commitments and potential sales
opportunities and upon numerous other assumptions. Additionally,
the net cash flow estimates include amounts due IPU holders.

Because of the number and range of these variables, no
representation can be made that the net cash flow estimates set
forth below are accurate, and any change in such variables will
impact the cash flows the Company may realize in the future.

TABLE 4

Standardized Measure of Discounted Future Net Cash Flows and
Changes Therein Relating to Proved Oil and Gas Reserves
At December 31, 1993, 1992 and 1991
(Thousands of dollars)

1993 1992 1991

Future cash inflows $2,085,222 $2,627,497 $2,732,366
Future production and
development costs (589,163) (573,047) (556,121)
Future income tax expenses (740,808) (1,037,570) (1,109,377)

Future net cash flows 755,251 1,016,880 1,066,868

10% annual discount for
estimated timing of
cash flows (375,500) (496,070) (516,755)

Standardized measure of
discounted future net
cash flows $ 379,751 $ 520,810 $ 550,113

<PAGE>
INDONESIAN OIL AND GAS OPERATIONS (continued)

The following are the principal sources of changes in the
standardized measure of discounted future net cash flows for
proved reserves during 1993, 1992 and 1991.

1993 1992 1991

(Thousands of dollars)

Standardized measure of discounted
future net cash flows at
beginning of period $ 520,810 $ 550,113 $ 812,554

Sales and transfers of oil and gas
produced, net of production
costs (177,720) (180,139) (178,498)

Net changes in prices and
production costs (367,050) (108,119) (712,766)

Development costs incurred
during the period 36,328 34,407 43,269

Revisions of previous
quantity estimates 104,367 78,074 88,703

Accretion of discount 92,991 100,530 154,079

Net change in income taxes 170,025 45,944 342,772

Standardized measure of discounted
future net cash flows at end
of period $ 379,751 $ 520,810 $550,113

Note: The standardized measure of discounted future net cash
flows at December 31, 1993, 1992 and 1991 included $59,629,
$90,683 and $102,532, respectively, in future net cash
flows attributable to IPU holders.

b) INTERIM FINANCIAL DATA (Unaudited)

The following table shows summary quarterly data for 1993, 1992 and 1991:

<CAPTION>
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter

<S> <C> <C> <C> <C>
Year Ended December 31, 1993

Revenues............. $ 58,298 $ 38,834 $ 47,840 $ 55,616

Operating profit..... $ 37,952 $ 21,099 $ 28,331 $ 36,798

Net earnings......... $ 10,804 $ 3,618 $ 5,350 $ 10,703

Year Ended December 31, 1992

Revenues............. $ 52,814 $ 45,518 $ 56,642 $ 50,923

Operating profit..... $ 30,909 $ 25,059 $ 33,456 $ 24,532 (a)

Net earnings......... $ 7,842 $ 6,207 $ 7,766 $ 1,861

Year Ended December 31, 1991

Revenues............. $ 67,160 $ 44,227 $ 59,720 $ 36,739

Operating profit..... $ 43,630 $ 23,372 $ 31,806 $ 17,356

Net earnings......... $ 8,972 $ 1,784 $ 5,339 $ 2,159

(a) Includes a $6,400 provision for prior year's windfall profit tax liability.
/TABLE
<PAGE>
<TABLE>

SCHEDULE V
UNIMAR COMPANY AND SUBSIDIARIES

Property, Plant and Equipment
Years Ended December 31, 1993, 1992 and 1991
(Thousands of dollars)
<CAPTION>
Balance at Balance
Beginning Additions at End
of Period at Cost Retirements of Period

<S> <C> <C> <C> <C>
1993

Oil and gas properties
Indonesia $955,285 $ 39,967 $ (3,365) $991,887
Other 14 - - 14
Other 3,431 175 (323) 3,283
$958,730 $ 40,142 $ (3,688) $995,184

1992

Oil and gas properties
Indonesia $922,751 $ 38,978 $ (6,444) $955,285
Other 14 - - 14
Other 3,317 239 (125) 3,431
$926,082 $ 39,217 $ (6,569) $958,730
1991

Oil and gas properties
United States $ 450 $ - $ (450) $ -
Indonesia 877,613 54,339 (9,201) 922,751
Other 14 - - 14
Other 2,106 1,510 (299) 3,317
$880,183 $ 55,849 $ (9,950) $926,082
</TABLE>
<PAGE>
<TABLE>
SCHEDULE VI
UNIMAR COMPANY AND SUBSIDIARIES

Accumulated Depreciation and Depletion of Property, Plant and Equipment
Years Ended December 31, 1993, 1992 and 1991
(Thousands of dollars)

<CAPTION>
Balance at Charges to Balance
Beginning Costs and Retire- at End
of Period Expenses ments of Period

<S> <C> <C> <C> <C>
1993

Oil and gas properties
Indonesia $527,150 $ 52,710 $ - $579,860
Other 893 377 (323) 947
$528,043 $ 53,087 $ (323) $580,807

1992

Oil and gas properties
Indonesia $469,875 $ 57,275 $ - $527,150
Other 671 347 (125) 893
$470,546 $ 57,622 $ (125) $528,043

1991

Oil and gas properties
United States $ 422 $ 28 $ (450) $ -
Indonesia 408,412 61,463 - 469,875
Other 656 314 (299) 671
$409,490 $ 61,805 $ (749) $470,546

</TABLE>
<PAGE>
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosures.

None

PART III

Item 10. Directors and Executive Officers of the Registrant.

The management, budgeting and financial control of the
Company's interest in the Indonesian Joint Venture operations are
exercised by a Management Board consisting of six members, three
appointed by each partner. The following persons currently serve
as members of the Company's Management Board:

GEORGE W. BERKO (age 47) was appointed to the Company's
Management Board in May 1992. Since May 1992, he has served as
the Partners' representative for Investor Relations, Treasurer
and Chief Financial and Accounting Officer of ENSTAR, ENSTAR
Indonesia, Inc., INTERNATIONAL, and certain of their
subsidiaries, and has been LASMO America Ltd.'s Vice President -
Unimar Accounting. From October 1990 until April 1992, he was
Vice President, Controller of Ultramar Oil and Gas Limited, and
prior to that time, he was a General Manager of American Ultramar
Ltd. from December 1984.

IAN D. BROWN (age 44) was appointed to the Company's
Management Board in February 1993. He is also Director and
Chairman of ENSTAR and certain of its affiliates. In January
1994 he was appointed President and General Manager of LASMO
Companies in Indonesia. In January 1993, he was appointed
Director, Indonesian Joint Venture for LASMO plc and a member of
the VICO Board. Since May 1986, he served as Commercial Manager
for LASMO plc, and from February 1987, Managing Director, LASMO
Trading Limited, the marketing, trading and transportation
affiliates of the parent company.

LARRY D. KALMBACH (age 42) was appointed to the Company's
Management Board in February 1993. Since February 1, 1993, he
has been Vice President-Finance of UTPH after serving as Vice
President and Controller of UTPH since September 1986. Prior to
that time, he held various financial management positions with
UTPH since 1974.

WILLIAM M. KRIPS (age 54) was appointed to the Company's
Management Board in January 1987. He is also a Director of
ENSTAR and certain of its affiliates. Since December 1991, he
has been Senior Vice President Exploration & Production of UTPH.
Prior to that time, he served as Senior Vice President and
General Manager - U. S. Exploration and Production, Senior Vice
President and General Manager - Hydrocarbon Products Group and
Vice President and General Manager - International Operations.

ARTHUR W. PEABODY (age 50) was appointed to the Company's
Management Board in February 1992 and in April 1993 was appointed
Chairman of the Management Board. He is also a Director of
ENSTAR, ENSTAR Indonesia, Inc., INTERNATIONAL and VICO. Since
February 1992, he has been Senior Vice President - Exploration
and Production of UTPH, and prior to that time, he held various
positions at UTPH including Senior Vice President and General
Manager - Hydrocarbon Products Group, Vice President - Planning
and Administration and Vice President - Acquisitions and
Planning.

JERRY L. PICKERILL (age 56) was appointed to the Company's
Management Board in June 1992 and also serves as a Director of
ENSTAR Corporation. Since February of 1989, he has served as
President of LASMO Energy Corporation and is currently President
and Director of LASMO America Limited, the holding company for
the LASMO U. S. subsidiaries. He previously served as Vice
President and General Counsel for CNG Producing Company, Tulsa
Division, Vice President and General Counsel of Mapco Oil & Gas,
Inc., and an attorney for Amerada Hess Corporation.

As set forth above, control of the Company's operations is
exercised by the Management Board. The Company, a Texas general
partnership, does not have any Executive Officers.

Item 11. Executive Compensation.

The Company has no executive officers, and no members of the
Management Board are paid directly by the Company. All members
of the Management Board are full-time employees of UTPH or LASMO,
or their respective subsidiaries, and do not receive from the
Company any remuneration for their services to the Company.
Moreover, the Company has no employees who are compensated for
their services to the Company. VICO, a subsidiary of the
Company, has employees who are responsible for the daily
operating activities of the Joint Venture and are compensated by
the Joint Venture. See Item 13 below for information concerning
the Company's reimbursement to LASMO for services rendered to the
Company by one of LASMO's designees on the Management Board.

Item 12. Security Ownership of Certain Beneficial Owners and
Management.

The Company is a Texas general partnership and as such has
no voting securities apart from the general partnership interests
owned by the partners. The table below reflects the beneficial
ownership of 100 percent of the partnership interests in the
Company as of March 15, 1994:

Name and Address of Amount Beneficially
Title of Class Beneficial Owner Owned

General Partnership LASMO plc 50%
Interest 100 Liverpool Street
London EC2M 2BB
England

Name and Address of Amount Beneficially
Title of Class Beneficial Owner Owned

General Partnership Union Texas Petroleum 50%
Interest Holdings, Inc.
1330 Post Oak Boulevard
Houston, Texas 77252

Item 13. Certain Relationships and Related Transactions.

The partners of the Company provide management expertise,
office space, and administrative, legal and professional
services. For such services, a management fee of approximately
$508 and $600 was charged in 1993 and 1992, respectively,
including $138 ($96 in 1992) paid in respect of Mr. Berko's
services.

The Company holds demand notes in the amount of $40 million
from or generated by affiliates of each partner. These funds
will be made available to the Company if additional working
capital is required.

As operator of the Joint Venture, VICO conducts exploration
and development activities within the PSC area. The cost of such
activities is funded by the Joint Venture participants to VICO.
In addition, VICO performs services for the operator of the LNG
Plant, P.T. Badak Natural Gas Liquefaction Company (P.T. Badak).
For the year ended December 31, 1993, VICO charged P.T. Badak
approximately $32 million ($41 million in 1992) for engineering
services and costs incurred on P.T. Badak's behalf. Also, during
1993 VICO billed P.T. Badak approximately $1.5 million ($1.8
million in 1992) principally for field pipeline maintenance
services. Accounts receivable from P.T. Badak approximated $3.3
million at December 31, 1993 ($3.0 million at December 31, 1992).

PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports
on Form 8-K.

(a)(1) Financial Statements listed below are included as
Part II, Item 8 hereof on the pages indicated:

Report of Independent Auditors 25

Consolidated Balance Sheet,
December 31, 1993 and 1992 26

Consolidated Statement of Earnings,
Years ended December 31, 1993,
1992 and 1991 27

Consolidated Statement of Cash Flows,
Years ended December 31, 1993,
1992 and 1991 28

Consolidated Statement of Changes in
Partners' Capital, Years ended
December 31, 1993, 1992 and 1991 29

Notes to Consolidated Financial
Statements 30-44

Supplemental Financial Information
(unaudited) 45-51

(2) Financial Statement Schedules listed below are filed
as a part hereof on the pages indicated:

V - Property, Plant and Equipment 52

VI - Accumulated Depreciation and
Depletion of Property, Plant
and Equipment 53

All other schedules are omitted as they are not required or are
not applicable.

(a)(3) The following documents are included as Exhibits to
this Report. Unless it has been indicated that a
document listed below is incorporated by reference
herein, copies of the document have been filed
herewith.

(2)-1- Merger Agreement, dated May 22, 1984, and Amendment
Agreements thereto, dated June 8, 1984 and June 12,
1984 (incorporated by reference to Annex A to the
Prospectus/Proxy Statement included in the
Company's Registration Statement on Form S-14 (No.
2-93037)).*

(2)-2- Agreement of Merger, dated as of August 28, 1984
(incorporated by reference to Annex B to the
Prospectus/Proxy Statement included in the
Company's Registration Statement on Form S-14 (No.
2-93037)).*

(2)-3- Divestiture Agreement, dated June 20, 1984 (filed
as Exhibit 2.3 to the Company's Registration
Statement on Form S-14 (No. 2-93037)).*

(3)-1- Amended and Restated Agreement of General
Partnership of Unimar Company dated September 11,
1990 between Unistar, Inc. and Ultrastar, Inc.
(filed as Exhibit (3)-4- to the Company's 1990 Form
10-K (No. 18791)).*

(4)-1- Form of Indenture between Unimar and Irving Trust
Company, as Trustee (filed as Exhibit 4 to the
Company's Registration Statement on Form S-14 (No.
2-93037)).*

(4)-2- First Supplemental Indenture, dated as of October
31, 1986, to the Indenture between Unimar and
Irving Trust Co., as Trustee (Exhibit (4)-1 above)
(Filed as Exhibit 10.114 to Union Texas Petroleum
Holdings, Inc.'s Registration Statement on Form S-1
(No. 33-16267)).*

(10)-1- Joint Venture Agreement, dated August 8, 1968,
among Roy M. Huffington, Inc., Virginia
International Company, Austral Petroleum Gas
Corporation, Golden Eagle Indonesia, Limited, and
Union Texas Far East Corporation, as amended (filed
as Exhibit 6.6 to Registration Statement No. 2-
58834 of Alaska Interstate Company).*

(10)-2- Agreement dated as of October 1, 1979, among the
parties to the Joint Venture Agreement referred to
in Exhibit (10)-1- above (filed as Exhibit 5.2 to
Registration Statement No. 2-66661 of Alaska
Interstate Company).*

* Incorporated herein by reference.

(10)-3- Amendment to the Operating Agreement dated April 1,
1990, between Roy M. Huffington, Inc., a Delaware
corporation, Ultramar Indonesia Limited, a Bermuda
corporation, Virginia Indonesia Company, a Delaware
corporation, Virginia International Company, a
Delaware corporation, Union Texas East Kalimantan
Limited, a Bahamian corporation, and Universe Gas &
Oil Company, Inc., a Liberian corporation.

(10)-4- Amended and Restated Production Sharing Contract
dated April 23, 1990 (effective August 8, 1968 -
August 7, 1998) by and between Perusahaan
Pertambangan Minyak Dan Gas Bumi Negara (Pertamina)
and Roy M. Huffington, Inc., Virginia International
Company, Virginia Indonesia Company, Ultramar
Indonesia Limited, Union Texas East Kalimantan
Limited, Universe Gas & Oil Company, Inc. and
Huffington Corporation.

(10)-5- Production Sharing Contract dated April 23, 1990
(effective August 8, 1998 - August 7, 2018) between
Perusahaan Pertambangan Minyak Dan Gas Bumi Negara
(Pertamina) and Roy M. Huffington, Inc., Virginia
International Company, Virginia Indonesia Company,
Ultramar Indonesia Limited, Union Texas East
Kalimantan Limited, Universe Gas & Oil Company,
Inc. and Huffington Corporation.

(10)-6- Nilam Unit Agreement, effective as of January 1,
1980, to establish the manner in which the Joint
Venture and Total will cooperate to develop the
unitized area of the Nilam Field (filed as Exhibit
(10)-58- to the Company's 1991 Form 10-K (No. 1-
8791)).*

(10)-7- Third Amended and Restated Implementation
Procedures for Crude Oil Liftings, effective as of
July 1, 1993, among Virginia Indonesia Company,
LASMO Sanga Sanga Limited, Opicoil Houston, Inc.,
Union Texas East Kalimantan Limited, Universe Gas &
Oil Company, Inc. and Virginia International
Company.

(10)-8- Amended and Restated 1973 LNG Sales Contract, dated
as of the 1st day of January 1990, by and between
Perusahaan Pertambangan Minyak Dan Gas Bumi Negara,
as Seller, and Chubu Electric Power Co., Inc., The
Kansai Electric Power Co., Inc., Kyushu Electric
Power Co., Inc., Nippon Steel Corporation, Osaka
Gas Co., Ltd. and Toho Gas Co., Ltd., as Buyers.

* Incorporated herein by reference.

(10)-9- Amendment to the 1973 LNG Sales Contract dated as
of the 3rd day of December, 1973, amended by
Amendment No. 1 dated as of the 31st day of August,
1976, and amended and restated as of the 1st day of
January, 1990 ("1973 LNG Sales Contract"), is
entered into as of the 1st day of June, 1992, by
and between Perusahaan Pertambangan Minyak Dan Gas
Bumi Negara, a state enterprise of the Republic of
Indonesia (Seller), on the one hand, and Kyushu
Electric Power Co., Inc. (Kyushu Electric), Nippon
Steel Corporation (Nippon Steel), and Toho Gas Co.,
Ltd. (Toho Gas), all corporations organized and
existing under the laws of Japan, on the other
hand.

(10)-10- Amended and Restated Supply Agreement (In Support
of the Amended and Restated 1973 LNG Sales
Contract) between Pertamina and Virginia Indonesia
Company, LASMO Sanga Sanga Limited, Opicoil
Houston, Inc., Union Texas East Kalimantan Limited,
Universe Gas & Oil Company, Inc., and Virginia
International Company dated September 22, 1993,
effective December 3, 1973.

(10)-11- Amended and Restated Badak LNG Sales Contract,
dated as of the 1st day of January, 1990, by and
between Perusahaan Pertambangan Minyak Dan Gas Bumi
Negara, as Seller, and Chubu Electric Power Co.,
Inc., The Kansai Electric Power Co., Inc., Osaka
Gas Co., Ltd. and Toho Gas Co., Ltd., as Buyers.

(10)-12- Supply Agreement, dated as of April 14, 1981
between Perusahaan Pertambangan Minyak Dan Gas Bumi
Negara (Pertamina) and the parties to the Joint
Venture Agreement, including the Company.

(10)-13- Seventh Supply Agreement for Excess Sales
(Additional Fixed Quantities under Badak LNG Sales
Contract as a Result of Contract Amendment and
Restatement) between Perusahaan Pertambangan Minyak
Dan Gas Bumi Negara and Virginia Indonesia Company,
Opicoil Houston, Inc., Ultramar Indonesia Limited,
Union Texas East Kalimantan Limited, Universe Gas &
Oil Company, Inc. and Virginia International
Company, dated September 28, 1992, but effective as
of January 1, 1990.

* Incorporated herein by reference.

(10)-14- Bontang II Trustee and Paying Agent Agreement
Amended and Restated as of July 15, 1991 among
Perusahaan Pertambangan Minyak Dan Gas Bumi Negara,
Virginia Indonesia Company, Virginia International
Company, Union Texas East Kalimantan Limited,
Ultramar Indonesia Limited, Opicoil Houston, Inc.,
Universe Gas & Oil Company, Inc., Total Indonesie,
Unocal Indonesia, Ltd., Indonesia Petroleum, Ltd.
and Continental Bank International.

(10)-15- Producers Agreement No. 2 dated as of June 9, 1987
by Perusahaan Pertambangan Minyak Dan Gas Bumi
Negara (Pertamina), Roy M. Huffington, Inc.,
Virginia International Company, Ultramar Indonesia
Limited, Virginia Indonesia Company, Union Texas
East Kalimantan Limited, Universe Tankships, Inc.,
Huffington Corporation in favor of The Industrial
Bank of Japan Trust Company as Agent (filed as
Exhibit (10)-30- to the Company's 1987 Form 10-K
(No. 1-8791)).*

(10)-16- Badak III LNG Sales Contract between Perusahaan
Pertambangan Minyak Dan Gas Bumi Negara (Pertamina)
as Seller and Chinese Petroleum Corporation as
Buyer signed on March 19, 1987 (filed as Exhibit
(10)-59- to the Company's 1991 Form 10-K (No. 1-
8791)).*

(10)-17- Badak III LNG Sales Contract Supply Agreement,
dated October 19, 1987 among Perusahaan
Pertambangan Minyak Dan Gas Bumi Negara (Pertamina)
and the parties to the Joint Venture Agreement.

(10)-18- LNG Sales and Purchase Contract (Korea II)
effective May 7, 1991 between Perusahaan
Pertambangan Minyak Dan Gas Bumi Negara and Korea
Gas Corporation.

(10)-19- Schedule A to the LNG Sales and Purchase Contract
(Korea II FOB) between Perusahaan Pertambangan
Minyak Dan Gas Bumi Negara and Korea Gas
Corporation.

(10)-20- Bontang III Producers Agreement, dated February 9,
1988, among Perusahaan Pertambangan Minyak Dan Gas
Bumi Negara (Pertamina) and the parties to the
Joint Venture Agreement.

* Incorporated herein by reference.

(10)-21- Amendment No. 1 to Bontang III Producers Agreement
dated as of May 31, 1988 among Perusahaan
Pertambangan Minyak Dan Gas Bumi Negara, Roy M.
Huffington, Inc., Huffington Corporation, Virginia
International Company, Virginia Indonesia Company,
Ultramar Indonesia Limited, Union Texas East
Kalimantan Limited, Universe Tankships, Inc., Total
Indonesie, Unocal Indonesia, Ltd., Indonesia
Petroleum, Ltd. and Train-E Finance Co., Ltd., as
Tranche A Lender, The Industrial Bank of Japan
Trust Company, as Agent and The Industrial Bank of
Japan Trust Company on behalf of the Tranche B
Lenders.

(10)-22- Amendment No. 2 to Producers Agreement No. 2 dated
as of May 31, 1988 among Perusahaan Pertambangan
Minyak Dan Gas Bumi Negara, Roy M. Huffington,
Inc., Huffington Corporation, Virginia
International Company, Virginia Indonesia Company,
Ultramar Indonesia Limited, Union Texas East
Kalimantan Limited and Universe Tankships, Inc.
(filed as Exhibit (10)-44- to the Company's 1988
Form 10-K (No. 1-8791)).*

(10)-23- $316,000,000 Bontang III Loan Agreement dated
February 9, 1988 among Continental Bank
International as Trustee, Train-E Finance Co., Ltd.
as Tranche A Lender and The Industrial Bank of
Japan Trust Company as Agent.

(10)-24- Bontang III Trustee and Paying Agent Agreement,
dated February 9, 1988, among Pertamina, Roy M.
Huffington, Inc., Huffington Corporation, Virginia
International Company, VICO, Ultrastar Indonesia
Limited, Union Texas East Kalimantan Limited,
Universe Tankships, Inc., Total Indonesia, Unocal
Indonesia, Ltd., Indonesia Petroleum, Ltd. and
Continental Bank International (filed as Exhibit
10.42 to the Union Texas Petroleum Holdings, Inc.'s
1991 Form 10-K (Commission File No. 1-9019)).*

(10)-25- Amendment No. 1 to Bontang III Trustee and Paying
Agent Agreement, dated as of December 11, 1992,
among Pertamina, VICO, Virginia International
Company, Ultramar Indonesia Limited, Union Texas
East Kalimantan Limited, Opicoil Houston, Inc.,
Universe Gas & Oil Company, Inc., Total Indonesia,
Unocal Indonesia Ltd., Indonesia Petroleum, Ltd.
and Continental Bank International, as Bontang III
Trustee (Filed as Exhibit 10.83 to the Union Texas
Petroleum Holdings, Inc.'s 1992 Form 10-K
(Commission File No. 1-9019)).*

* Incorporated herein by reference.

(10)-26- Amended and Restated Debt Service Allocation
Agreement dated February 9, 1988 among Perusahaan
Pertambangan Minyak Dan Gas Bumi Negara and Roy M.
Huffington, Inc., Virginia International Company,
Ultramar Indonesia Limited, Virginia Indonesia
Company, Union Texas East Kalimantan Limited,
Universe Tankships, Inc., Huffington Corporation,
Total Indonesie, Unocal Indonesia, Ltd. and
Indonesia Petroleum, Ltd. (filed as Exhibit (10)-
40- to the Company's 1988 Form 10-K (No. 1-8791)).*

(10)-27- Letter agreement between Perusahaan Pertambangan
Minyak Dan Gas Bumi Negara and Chinese Petroleum
Corporation, dated December 1, 1989.

(10)-28- Memorandum of Agreement (Yokkaichi Extension), made
as of December 21, 1989, between Perusahaan
Pertambangan Minyak Dan Gas Bumi Negara, as Seller,
and Chubu Electric Power Co., Inc., as Buyer (filed
as Exhibit (10)-60- to the Company's 1989 Form 10-K
(No. 1-8791)).*

(10)-29- Badak IV LNG Sales Contract dated October 23, 1990
between Perusahaan Pertambangan Minyak Dan Gas Bumi
Negara (Pertamina), as Seller and Osaka Gas Co.,
Ltd., Tokyo Gas Co., Ltd. and Toho Gas Co., Ltd.,
as Buyers.

(10)-30- LNG Sales Contract dated as of October 13, 1992
between Perusahaan Pertambangan Minyak Dan Gas Bumi
Negara, as Seller and Hiroshima Gas Co., Ltd. and
Nippon Gas Co., Ltd., as Buyers.

(10)-31- LNG Sales Contract dated as of October 13, 1992
between Perusahaan Pertambangan Minyak Dan Gas Bumi
Negara, as Seller and Osaka Gas Co., Ltd., as
Buyer.

(10)-32- Supply Agreement for Natural Gas to Badak IV LNG
Sales Contract dated August 12, 1991 between
Perusahaan Pertambangan Minyak Dan Gas Bumi Negara,
Virginia Indonesia Company, Opicoil Houston, Inc.,
Ultramar Indonesia Limited, Union Texas East
Kalimantan Limited, Universe Gas & Oil Company,
Inc. and Virginia International Company.

(10)-33- Second Supply Agreement for Package IV Excess Sales
(Osaka Gas Contract - Package IV Quantities)
between Pertamina and Virginia Indonesia Company,
LASMO Sanga Sanga Limited, Opicoil Houston, Inc.,
Union Texas East Kalimantan Limited, Universe Gas &
Oil Company, Inc., and Virginia International
Company dated September 22, 1993, effective January
1, 1991.

* Incorporated herein by reference.

(10)-34- Third Supply Agreement for Package IV Excess Sales
(Toho Gas Contract - Package IV Quantities) between
Pertamina and Virginia Indonesia Company, LASMO
Sanga Sanga Limited, Opicoil Houston, Inc., Union
Texas East Kalimantan Limited, Universe Gas & Oil
Company, Inc., and Virginia International Company
dated September 28, effective January 1, 1991.

(10)-35- Eleventh Supply Agreement for Package IV Excess
Sales (1973 Contract Build-Down Quantities) between
Pertamina and Virginia Indonesia Company, LASMO
Sanga Sanga Limited, Opicoil Houston, Inc., Union
Texas East Kalimantan Limited, Universe Gas & Oil
Company, Inc., and Virginia International Company
dated September 22, 1993, effective January 1,
1990.

(10)-36- Bontang IV Producers Agreement dated August 26,
1991 by Perusahaan Pertambangan Minyak Dan Gas Bumi
Negara, Virginia Indonesia Company, Opicoil
Houston, Inc., Virginia International Company,
Ultramar Indonesia Limited, Union Texas East
Kalimantan Limited, Universe Gas & Oil Company,
Inc., Total Indonesie, Unocal Indonesia, Ltd. and
Indonesia Petroleum, Ltd., in favor of The Chase
Manhattan Bank, N.A. as Agent for the Lenders.

(10)-37- $750,000,000 Bontang IV Loan Agreement dated August
26, 1991 among Continental Bank International as
Trustee under the Bontang IV Trustee and Paying
Agent Agreement as Borrower, Chase Manhattan Asia
Limited and The Mitsubishi Bank, Limited as
Coordinators, the other banks and financial
institutions named herein as Arrangers, Co-
Arrangers, Lead Managers, Managers, Co-Managers and
Lenders, The Chase Manhattan Bank, N.A. and the
Mitsubishi Bank, Limited as Co-Agents and The Chase
Manhattan Bank, N.A. as Agent.

(10)-38- Bontang IV Trustee and Paying Agent Agreement dated
August 26, 1991 among Perusahaan Pertambangan
Minyak Dan Gas Bumi Negara, Virginia Indonesia
Company, Opicoil Houston, Inc., Virginia
International Company, Ultramar Indonesia Limited,
Union Texas East Kalimantan Limited, Universe Gas &
Oil Company, Inc., Total Indonesie, Unocal
Indonesia, Ltd., Indonesia Petroleum, Ltd. and
Continental Bank International.

* Incorporated herein by reference.

(10)-39- Amended and Restated Bontang Processing Agreement
dated February 9, 1988 among Perusahaan
Pertambangan Minyak Dan Gas Bumi Negara and Roy M.
Huffington, Inc., Huffington Corporation, Virginia
International Company, Virginia Indonesia Company,
Ultramar Indonesia Limited, Union Texas East
Kalimantan Limited, Universe Tankships, Inc., Total
Indonesie, Unocal Indonesia, Ltd., Indonesia
Petroleum, Ltd. and P.T. Badak Natural Gas
Liquefaction Company (filed as Exhibit (10)-39- to
the Company's 1988 Form 10-K (No. 1-8791)).*

(10)-40- Bontang Capital Projects Loan Agreement No. 1
between Continental Bank International as Trustee
under the Badak Trustee and Paying Agent Agreement,
Borrower, and The Industrial Bank of Japan Trust
Company, Agent, for the Lenders dated as of
September 10, 1986 (filed as Exhibit (4)-13- to the
Company's 1986 Form 10-K (No. 1-8791)).*

(10)-41- Bontang Capital Projects Loan Agreement No. 2 dated
June 9, 1987, among Continental Bank International,
as Trustee under the Badak Trustee and Paying Agent
Agreement (Borrower), the banks named therein as
Lead Managers and Lenders and The Industrial Bank
of Japan Trust Company (Agent) (filed as Exhibit
(10)-31 to the Company's 1987 Form 10-K (No. 1-
8791)).*

(10)-42- Bontang LPG Sales and Purchase Contract between
Perusahaan Pertambangan Minyak Dan Gas Bumi Negara,
as Seller, and National Federation of Agricultural
Co-Operative Associations (Zen-Noh), as Buyer,
dated February 21, 1992.

(10)-43- Bontang LPG Sales and Purchase Contract between
Perusahaan Pertambangan Minyak Dan Gas Bumi Negara,
as Seller, and Japan Indonesia Oil Co., Ltd., as
Buyer, dated February 20, 1992.

(10)-44- Arun and Bontang LPG Sales and Purchase Contract
between Perusahaan Pertambangan Minyak Dan Gas Bumi
Negara (Pertamina) as Seller and Mitsubishi
Corporation, Cosmo Oil Co., Ltd., Nippon Petroleum
Gas Co., Ltd., Showa Shell Sekiyu K.K., Kyodo Oil
Co., Ltd., Idemitsu Kosan Co., Ltd. and Mitsui
Liquefied Gas Co., Ltd. as Buyers dated July 15,
1986 (filed as Exhibit (10)-60- to the Company's
1991 Form 10-K (No. 1-8791)).*

(10)-45- Bontang LPG Supply Agreement, dated November 17,
1987, between Perusahaan Pertambangan Minyak Dan
Gas Bumi Negara (Pertamina) and the parties to the
Joint Venture Agreement.

* Incorporated herein by reference.

(10)-46- Advance Payment Agreement between Perusahaan
Pertambangan Minyak Dan Gas Bumi Negara (Pertamina)
and Arun Bontang Project Finance Co., Ltd., dated
February 16, 1987 (filed as Exhibit (4)-15- to the
Company's 1986 Form 10-K (No. 1-8791)).*

(10)-47- Agreement and Plan of Reorganization of ENSTAR
Corporation, dated December 22, 1989, by and among
Unimar Company, Ultrastar, Inc., Unistar, Inc.,
ENSTAR Corporation, Newstar Inc., Union Texas
Development Corporation, Union Texas Petroleum
Corporation and Ultramar America Limited.

(10)-48- Amendment to Agreement and Plan of Reorganization
of ENSTAR Corporation, dated May 1, 1990, by and
among Unimar Company, Ultrastar, Inc., Unistar,
Inc., ENSTAR Corporation, Ultramar Production
Company, Union Texas Development Corporation, Union
Texas Petroleum Corporation and Ultramar America
Limited.

(21)-1- List of Subsidiaries of the Company.

(23)-1- Consent of Ernst & Young.

(b) Reports on Form 8-K

No reports on Form 8-K have been filed during the
last quarter of the fiscal year ended December 31,
1993.

* Incorporated herein by reference.

<PAGE>
SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

UNIMAR COMPANY

March 24, 1994 By /S/ ARTHUR W. PEABODY
Arthur W. Peabody
Chairman of the
Management Board

Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities indicated as of
March 24, 1994.

By /S/ GEORGE W. BERKO By /S/ LARRY D. KALMBACH
George W. Berko Larry D. Kalmbach
Management Board Management Board
(LASMO Representative) (UTPH Representative)

By /S/ IAN D. BROWN By /S/ WILLIAM M. KRIPS
Ian D. Brown William M. Krips
Management Board Management Board
(LASMO Representative) (UTPH Representative)

By /S/ JERRY L. PICKERILL By /S/ ARTHUR W. PEABODY
Jerry L. Pickerill Arthur W. Peabody
Management Board Chairman of the
(LASMO Representative) Management Board
(UTPH Representative)

INDEX TO EXHIBITS

Sequential
Numbered
Exhibit Number Page

The following documents are included as Exhibits to this Report.
Unless it has been indicated that a document listed below is
incorporated by reference herein, copies of the document have
been filed herewith.

(2)-1- Merger Agreement, dated May 22, 1984, and
Amendment Agreements thereto, dated June 8, 1984
and June 12, 1984 (incorporated by reference to
Annex A to the Prospectus/Proxy Statement included
in the Company's Registration Statement on Form S-
14 (No. 2-93037)).*

(2)-3- Divestiture Agreement, dated June 20, 1984 (filed
as Exhibit 2.3 to the Company's Registration
Statement on Form S-14 (No. 2-93037)).*

(4)-1- Form of Indenture between Unimar and Irving Trust
Company, as Trustee (filed as Exhibit 4 to the
Company's Registration Statement on Form S-14 (No.
2-93037)).*

(10)-1- Joint Venture Agreement, dated August 8, 1968,
among Roy M. Huffington, Inc., Virginia
International Company, Austral Petroleum Gas
Corporation, Golden Eagle Indonesia, Limited, and
Union Texas Far East Corporation, as amended
(filed as Exhibit 6.6 to Registration Statement
No. 2-58834 of Alaska Interstate Company).*

* Incorporated herein by reference.

(10)-3- Amendment to the Operating Agreement dated April
1, 1990, between Roy M. Huffington, Inc., a
Delaware corporation, Ultramar Indonesia Limited,
a Bermuda corporation, Virginia Indonesia Company,
a Delaware corporation, Virginia International
Company, a Delaware corporation, Union Texas East
Kalimantan Limited, a Bahamian corporation, and
Universe Gas & Oil Company, Inc., a Liberian
corporation.

(10)-4- Amended and Restated Production Sharing Contract
dated April 23, 1990 (effective August 8, 1968 -
August 7, 1998) by and between Perusahaan
Pertambangan Minyak Dan Gas Bumi Negara
(Pertamina) and Roy M. Huffington, Inc., Virginia
International Company, Virginia Indonesia Company,
Ultramar Indonesia Limited, Union Texas East
Kalimantan Limited, Universe Gas & Oil Company,
Inc. and Huffington Corporation.

(10)-5- Production Sharing Contract dated April 23, 1990
(effective August 8, 1998 - August 7, 2018)
between Perusahaan Pertambangan Minyak Dan Gas
Bumi Negara (Pertamina) and Roy M. Huffington,
Inc., Virginia International Company, Virginia
Indonesia Company, Ultramar Indonesia Limited,
Union Texas East Kalimantan Limited, Universe Gas
& Oil Company, Inc. and Huffington Corporation.

(10)-7- Third Amended and Restated Implementation
Procedures for Crude Oil Liftings, effective as of
July 1, 1993, among Virginia Indonesia Company,
LASMO Sanga Sanga Limited, Opicoil Houston, Inc.,
Union Texas East Kalimantan Limited, Universe Gas
& Oil Company, Inc. and Virginia International
Company.

* Incorporated herein by reference.

(10)-8- Amended and Restated 1973 LNG Sales Contract,
dated as of the 1st day of January 1990, by and
between Perusahaan Pertambangan Minyak Dan Gas
Bumi Negara, as Seller, and Chubu Electric Power
Co., Inc., The Kansai Electric Power Co., Inc.,
Kyushu Electric Power Co., Inc., Nippon Steel
Corporation, Osaka Gas Co., Ltd. and Toho Gas Co.,
Ltd., as Buyers.

(10)-9- Amendment to the 1973 LNG Sales Contract dated as
of the 3rd day of December, 1973, amended by
Amendment No. 1 dated as of the 31st day of
August, 1976, and amended and restated as of the
1st day of January, 1990 ("1973 LNG Sales
Contract"), is entered into as of the 1st day of
June, 1992, by and between Perusahaan Pertambangan
Minyak Dan Gas Bumi Negara, a state enterprise of
the Republic of Indonesia (Seller), on the one
hand, and Kyushu Electric Power Co., Inc. (Kyushu
Electric), Nippon Steel Corporation (Nippon
Steel), and Toho Gas Co., Ltd. (Toho Gas), all
corporations organized and existing under the laws
of Japan, on the other hand.

(10)-10- Amended and Restated Supply Agreement (In Support
of the Amended and Restated 1973 LNG Sales
Contract) between Pertamina and Virginia Indonesia
Company, LASMO Sanga Sanga Limited, Opicoil
Houston, Inc., Union Texas East Kalimantan
Limited, Universe Gas & Oil Company, Inc., and
Virginia International Company dated September 22,
1993, effective December 3, 1973.

(10)-11- Amended and Restated Badak LNG Sales Contract,
dated as of the 1st day of January, 1990, by and
between Perusahaan Pertambangan Minyak Dan Gas
Bumi Negara, as Seller, and Chubu Electric Power
Co., Inc., The Kansai Electric Power Co., Inc.,
Osaka Gas Co., Ltd. and Toho Gas Co., Ltd., as
Buyers.

(10)-12- Supply Agreement, dated as of April 14, 1981
between Perusahaan Pertambangan Minyak Dan Gas
Bumi Negara (Pertamina) and the parties to the
Joint Venture Agreement, including the Company.

(10)-13- Seventh Supply Agreement for Excess Sales
(Additional Fixed Quantities under Badak LNG Sales
Contract as a Result of Contract Amendment and
Restatement) between Perusahaan Pertambangan
Minyak Dan Gas Bumi Negara and Virginia Indonesia
Company, Opicoil Houston, Inc., Ultramar Indonesia
Limited, Union Texas East Kalimantan Limited,
Universe Gas & Oil Company, Inc. and Virginia
International Company, dated September 28, 1992,
but effective as of January 1, 1990.

* Incorporated herein by reference.

(10)-14- Bontang II Trustee and Paying Agent Agreement
Amended and Restated as of July 15, 1991 among
Perusahaan Pertambangan Minyak Dan Gas Bumi
Negara, Virginia Indonesia Company, Virginia
International Company, Union Texas East Kalimantan
Limited, Ultramar Indonesia Limited, Opicoil
Houston, Inc., Universe Gas & Oil Company, Inc.,
Total Indonesie, Unocal Indonesia, Ltd., Indonesia
Petroleum, Ltd. and Continental Bank
International.

(10)-16- Badak III LNG Sales Contract between Perusahaan
Pertambangan Minyak Dan Gas Bumi Negara
(Pertamina) as Seller and Chinese Petroleum
Corporation as Buyer signed on March 19, 1987
(filed as Exhibit (10)-59- to the Company's 1991
Form 10-K (No. 1-8791)).*

(10)-17- Badak III LNG Sales Contract Supply Agreement,
dated October 19, 1987 among Perusahaan
Pertambangan Minyak Dan Gas Bumi Negara
(Pertamina) and the parties to the Joint Venture
Agreement.

(10)-18- LNG Sales and Purchase Contract (Korea II)
effective May 7, 1991 between Perusahaan
Pertambangan Minyak Dan Gas Bumi Negara and Korea
Gas Corporation.

(10)-19- Schedule A to the LNG Sales and Purchase Contract
(Korea II FOB) between Perusahaan Pertambangan
Minyak Dan Gas Bumi Negara and Korea Gas
Corporation.

(10)-20- Bontang III Producers Agreement, dated February 9,
1988, among Perusahaan Pertambangan Minyak Dan Gas
Bumi Negara (Pertamina) and the parties to the
Joint Venture Agreement.

* Incorporated herein by reference.

(10)-21- Amendment No. 1 to Bontang III Producers Agreement
dated as of May 31, 1988 among Perusahaan
Pertambangan Minyak Dan Gas Bumi Negara, Roy M.
Huffington, Inc., Huffington Corporation, Virginia
International Company, Virginia Indonesia Company,
Ultramar Indonesia Limited, Union Texas East
Kalimantan Limited, Universe Tankships, Inc.,
Total Indonesie, Unocal Indonesia, Ltd., Indonesia
Petroleum, Ltd. and Train-E Finance Co., Ltd., as
Tranche A Lender, The Industrial Bank of Japan
Trust Company, as Agent and The Industrial Bank of
Japan Trust Company on behalf of the Tranche B
Lenders.

(10)-23- $316,000,000 Bontang III Loan Agreement dated
February 9, 1988 among Continental Bank
International as Trustee, Train-E Finance Co.,
Ltd. as Tranche A Lender and The Industrial Bank
of Japan Trust Company as Agent.

(10)-24- Bontang III Trustee and Paying Agent Agreement,
dated February 9, 1988, among Pertamina, Roy M.
Huffington, Inc., Huffington Corporation, Virginia
International Company, VICO, Ultrastar Indonesia
Limited, Union Texas East Kalimantan Limited,
Universe Tankships, Inc., Total Indonesia, Unocal
Indonesia, Ltd., Indonesia Petroleum, Ltd. and
Continental Bank International (filed as Exhibit
10.42 to the Union Texas Petroleum Holdings,
Inc.'s 1991 Form 10-K (Commission File No. 1-
9019)).*

(10)-25- Amendment No. 1 to Bontang III Trustee and Paying
Agent Agreement, dated as of December 11, 1992,
among Pertamina, VICO, Virginia International
Company, Ultramar Indonesia Limited, Union Texas
East Kalimantan Limited, Opicoil Houston, Inc.,
Universe Gas & Oil Company, Inc., Total Indonesia,
Unocal Indonesia Ltd., Indonesia Petroleum, Ltd.
and Continental Bank International, as Bontang III
Trustee (Filed as Exhibit 10.83 to the Union
Texas Petroleum Holdings, Inc.'s 1992 Form 10-K
(Commission File No. 1-9019)).*

* Incorporated herein by reference.

(10)-27- Letter agreement between Perusahaan Pertambangan
Minyak Dan Gas Bumi Negara and Chinese Petroleum
Corporation, dated December 1, 1989.

(10)-28- Memorandum of Agreement (Yokkaichi Extension),
made as of December 21, 1989, between Perusahaan
Pertambangan Minyak Dan Gas Bumi Negara, as
Seller, and Chubu Electric Power Co., Inc., as
Buyer (filed as Exhibit (10)-60- to the Company's
1989 Form 10-K (No. 1-8791)).*

(10)-29- Badak IV LNG Sales Contract dated October 23, 1990
between Perusahaan Pertambangan Minyak Dan Gas
Bumi Negara (Pertamina), as Seller and Osaka Gas
Co., Ltd., Tokyo Gas Co., Ltd. and Toho Gas Co.,
Ltd., as Buyers.

(10)-30- LNG Sales Contract dated as of October 13, 1992
between Perusahaan Pertambangan Minyak Dan Gas
Bumi Negara, as Seller and Hiroshima Gas Co., Ltd.
and Nippon Gas Co., Ltd., as Buyers.

(10)-31- LNG Sales Contract dated as of October 13, 1992
between Perusahaan Pertambangan Minyak Dan Gas
Bumi Negara, as Seller and Osaka Gas Co., Ltd., as
Buyer.

(10)-32- Supply Agreement for Natural Gas to Badak IV LNG
Sales Contract dated August 12, 1991 between
Perusahaan Pertambangan Minyak Dan Gas Bumi
Negara, Virginia Indonesia Company, Opicoil
Houston, Inc., Ultramar Indonesia Limited, Union
Texas East Kalimantan Limited, Universe Gas & Oil
Company, Inc. and Virginia International Company.

(10)-33- Second Supply Agreement for Package IV Excess
Sales (Osaka Gas Contract - Package IV Quantities)
between Pertamina and Virginia Indonesia Company,
LASMO Sanga Sanga Limited, Opicoil Houston, Inc.,
Union Texas East Kalimantan Limited, Universe Gas
& Oil Company, Inc., and Virginia International
Company dated September 22, 1993, effective
January 1, 1991.

* Incorporated herein by reference.

(10)-34- Third Supply Agreement for Package IV Excess Sales
(Toho Gas Contract - Package IV Quantities)
between Pertamina and Virginia Indonesia Company,
LASMO Sanga Sanga Limited, Opicoil Houston, Inc.,
Union Texas East Kalimantan Limited, Universe Gas
& Oil Company, Inc., and Virginia International
Company dated September 28, effective January 1,
1991.

(10)-35- Eleventh Supply Agreement for Package IV Excess
Sales (1973 Contract Build-Down Quantities)
between Pertamina and Virginia Indonesia Company,
LASMO Sanga Sanga Limited, Opicoil Houston, Inc.,
Union Texas East Kalimantan Limited, Universe Gas
& Oil Company, Inc., and Virginia International
Company dated September 22, 1993, effective
January 1, 1990.

(10)-36- Bontang IV Producers Agreement dated August 26,
1991 by Perusahaan Pertambangan Minyak Dan Gas
Bumi Negara, Virginia Indonesia Company, Opicoil
Houston, Inc., Virginia International Company,
Ultramar Indonesia Limited, Union Texas East
Kalimantan Limited, Universe Gas & Oil Company,
Inc., Total Indonesie, Unocal Indonesia, Ltd. and
Indonesia Petroleum, Ltd., in favor of The Chase
Manhattan Bank, N.A. as Agent for the Lenders.

(10)-37- $750,000,000 Bontang IV Loan Agreement dated
August 26, 1991 among Continental Bank
International as Trustee under the Bontang IV
Trustee and Paying Agent Agreement as Borrower,
Chase Manhattan Asia Limited and The Mitsubishi
Bank, Limited as Coordinators, the other banks and
financial institutions named herein as Arrangers,
Co-Arrangers, Lead Managers, Managers, Co-Managers
and Lenders, The Chase Manhattan Bank, N.A. and
the Mitsubishi Bank, Limited as Co-Agents and The
Chase Manhattan Bank, N.A. as Agent.

(10)-38- Bontang IV Trustee and Paying Agent Agreement
dated August 26, 1991 among Perusahaan
Pertambangan Minyak Dan Gas Bumi Negara, Virginia
Indonesia Company, Opicoil Houston, Inc., Virginia
International Company, Ultramar Indonesia Limited,
Union Texas East Kalimantan Limited, Universe Gas
& Oil Company, Inc., Total Indonesie, Unocal
Indonesia, Ltd., Indonesia Petroleum, Ltd. and
Continental Bank International.

* Incorporated herein by reference.

(10)-39- Amended and Restated Bontang Processing Agreement
dated February 9, 1988 among Perusahaan
Pertambangan Minyak Dan Gas Bumi Negara and Roy M.
Huffington, Inc., Huffington Corporation, Virginia
International Company, Virginia Indonesia Company,
Ultramar Indonesia Limited, Union Texas East
Kalimantan Limited, Universe Tankships, Inc.,
Total Indonesie, Unocal Indonesia, Ltd., Indonesia
Petroleum, Ltd. and P.T. Badak Natural Gas
Liquefaction Company (filed as Exhibit (10)-39- to
the Company's 1988 Form 10-K (No. 1-8791)).*

(10)-40- Bontang Capital Projects Loan Agreement No. 1
between Continental Bank International as Trustee
under the Badak Trustee and Paying Agent
Agreement, Borrower, and The Industrial Bank of
Japan Trust Company, Agent, for the Lenders dated
as of September 10, 1986 (filed as Exhibit (4)-13-
to the Company's 1986 Form 10-K (No. 1-8791)).*

(10)-41- Bontang Capital Projects Loan Agreement No. 2
dated June 9, 1987, among Continental Bank
International, as Trustee under the Badak Trustee
and Paying Agent Agreement (Borrower), the banks
named therein as Lead Managers and Lenders and The
Industrial Bank of Japan Trust Company (Agent)
(filed as Exhibit (10)-31 to the Company's 1987
Form 10-K (No. 1-8791)).*

(10)-42- Bontang LPG Sales and Purchase Contract between
Perusahaan Pertambangan Minyak Dan Gas Bumi
Negara, as Seller, and National Federation of
Agricultural Co-Operative Associations (Zen-Noh),
as Buyer, dated February 21, 1992.

(10)-43- Bontang LPG Sales and Purchase Contract between
Perusahaan Pertambangan Minyak Dan Gas Bumi
Negara, as Seller, and Japan Indonesia Oil Co.,
Ltd., as Buyer, dated February 20, 1992.

(10)-44- Arun and Bontang LPG Sales and Purchase Contract
between Perusahaan Pertambangan Minyak Dan Gas
Bumi Negara (Pertamina) as Seller and Mitsubishi
Corporation, Cosmo Oil Co., Ltd., Nippon Petroleum
Gas Co., Ltd., Showa Shell Sekiyu K.K., Kyodo Oil
Co., Ltd., Idemitsu Kosan Co., Ltd. and Mitsui
Liquefied Gas Co., Ltd. as Buyers dated July 15,
1986 (filed as Exhibit (10)-60- to the Company's
1991 Form 10-K (No. 1-8791)).*

(10)-45- Bontang LPG Supply Agreement, dated November 17,
1987, between Perusahaan Pertambangan Minyak Dan
Gas Bumi Negara (Pertamina) and the parties to the
Joint Venture Agreement.

* Incorporated herein by reference.

(10)-46- Advance Payment Agreement between Perusahaan
Pertambangan Minyak Dan Gas Bumi Negara
(Pertamina) and Arun Bontang Project Finance Co.,
Ltd., dated February 16, 1987 (filed as Exhibit
(4)-15- to the Company's 1986 Form 10-K (No. 1-
8791)).*

(10)-48- Amendment to Agreement and Plan of Reorganization
of ENSTAR Corporation, dated May 1, 1990, by and
among Unimar Company, Ultrastar, Inc., Unistar,
Inc., ENSTAR Corporation, Ultramar Production
Company, Union Texas Development Corporation,
Union Texas Petroleum Corporation and Ultramar
America Limited.

(21)-1- List of Subsidiaries of the Company.

(23)-1- Consent of Ernst & Young.

(b) Reports on Form 8-K

No reports on Form 8-K have been filed during the
last quarter of the fiscal year ended December 31,
1993.

* Incorporated herein by reference.

BADAK III LNG SALES CONTRACT
SUPPLY AGREEMENT

THIS AGREEMENT, made and entered into in Jakarta the 19th day
of October, 1987, but effective as of the 19th day of March 1987,
by and between PERUSAHAAN PERTAMBANGAN MINYAK DAN GAS BUMI NEGARA
("Pertamina"), on the one hand, and ROY M. HUFFINGTON, INC.
("Huffco"), HUFFINGTON CORPORATION, VIRGINIA INTERNATIONAL COMPANY,
VIRGINIA INDONESIA COMPANY, ULTRAMAR INDONESIA LIMITED, UNION
TEXAS
EAST KALIMANTAN LIMITED and UNIVERSE TANKSHIPS, INC. (herein
referred to collectively as "Contractors" and individually as
"Contractor"), on the other hand,

WITNESSETH

WHEREAS, Contractors individually own or control all of the
interest of "Contractors" in that certain Production Sharing
Contract, dated August 8, 1968, as amended, by and between PN
Pertambangan Minyak Nasional, predecessor of Pertamina as the Oil
and Gas State Enterprise of the Republic of Indonesia, on the one
hand, and Huffco and Virginia International Company (predecessors
in interest to Contractors) on the other (such contract as
heretofore and hereafter amended is herein referred to as the
"Production Sharing Contract" and the area covered thereby is
herein referred to as the "Huffco Contract Area"); and
WHEREAS, pursuant to the Production Sharing Contract, each of
Pertamina and Contractors is entitled to take and receive, sell and
freely export its respective share of the natural gas produced and
saved from the Huffco Contract Area (the percentage share of such
natural gas to which each of Pertamina and Contractors is entitled,
as determined under the Production Sharing Contract, is herein
referred to as the "Production Sharing Percentage" of such party);
and

WHEREAS, the reserves of natural gas in the Huffco Contract
Area exceed the reserves committed to be produced, supplied and
delivered by Pertamina and Contractors to meet a portion of
Pertamina's existing obligations under LNG sales contracts, LPG
sales contracts, and domestic gas sales contracts; and

WHEREAS, Pertamina, with assistance from Contractors, is
constructing one additional liquefaction train at the natural gas
liquefaction plant located at Bontang Bay, on the east coast of
Kalimantan, Indonesia (as so expanded, the "Bontang Plant") which
expansion will include construction of such additional port,
utility, plant and other facilities as may be required; and

WHEREAS, funds for the expansion of the liquefaction plant
will be provided to Pertamina through financing of the cost of such
expansion on terms mutually agreeable to Pertamina and Contractors
which provide for the repayment of funds provided pursuant to such
financing and the cost of such funds (repayment of funds and the
cost of such funds are hereinafter referred to as "Financing
Costs"); and

WHEREAS, Pertamina and Contractors are parties to the Bontang
LNG Processing Agreement dated as of July 1, 1983 (as from time to
time amended, the "Processing Agreement"), which provides for the
operation of the Bontang Plant and the payment of the costs of such
operation (such costs as determined in accordance with the
Processing Agreement are herein referred to as "Plant Operating
Costs"); and

WHEREAS, Pertamina and Contractors have agreed to use the
Bontang Plant in part for the liquefaction of the Huffco Contract
Gas (as hereinafter defined) and the Other Contract Gas (as
hereinafter defined); and

WHEREAS, it is contemplated that additional LNG resulting from
the increased capability of the Bontang Plant will be sold on the
basis of the highest price and most favorable terms available for
such LNG; and

WHEREAS, Pertamina, in collaboration with Contractors and its
production sharing contractors in the other contract areas in East
Kalimantan (herein referred to as the "Other Contract Areas") has
made arrangements for the sale and supply to Chinese Petroleum
Corporation ("Buyer"), pursuant to the Badak III LNG Sales Contract
dated March 19, 1987 (the "Badak III LNG Sales Contract"), of LNG
produced from natural gas supplied from the Huffco Contract Area
and the Other Contract Areas; and

WHEREAS, Pertamina, in collaboration with Contractors and the
production sharing contractors in the Other Contract Areas, has
made arrangements for the transportation of LNG sold pursuant to
the Badak III LNG Sales Contract in an LNG tanker chartered by
Pertamina and the payment of costs respecting such transportation
(herein referred to as "Transportation Costs"); and

WHEREAS, Pertamina and each Contractor desire to supply and
deliver natural gas from the Huffco Contract Area in support of the
performance by Pertamina of its obligations under the Badak III LNG
Sales Contract; and

WHEREAS, each Contractor desires to dispose of its Production
Sharing Percentage of the Huffco Contract Gas (as hereinafter
defined) in accordance with the terms of this Agreement,

NOW, THEREFORE, the parties agree as follows:

ARTICLE 1

This Agreement shall be effective as above first stated and
shall terminate on the date the Badak III LNG Sales Contract
terminates.

ARTICLE 2

2.1 The total quantity of net natural gas required to be
supplied and delivered out of recoverable reserves of natural gas
in East Kalimantan for liquefaction and sale as LNG under the Badak
III LNG Sales Contract is estimated to be 1.643 trillion standard
cubic feet ("t.s.c.f."): such quantity is herein referred to as the
"Badak III Base Net Gas Requirement". The Badak III Base Net Gas
Requirement is based on the "Fixed Quantities" of LNG which Buyer
is initially committed to purchase under the Badak III LNG Sales
Contract. In addition to such Fixed Quantities, further quantities
of LNG may be required under the Badak III LNG Sales Contract for
such purposes as cool-down cargoes, LNG which Buyer has an option
or obligation to purchase as additions or adjustments to Fixed
Quantities and "Additional LNG" which may be purchased from time to
time. The additional quantities of net natural gas, estimated not
to exceed 0.395 t.s.c.f., required to be supplied for liquefaction
and sale in respect of such further amounts of LNG is herein called
the "Badak III Additional Net Gas Requirement". "Fixed Quantities",
"Fixed Quantity Period" and "Additional LNG", as used above, shall
have the meanings defined in the Badak III LNG Sales Contract.

2.2 Pertamina and Contractors hereby commit and agree to
supply and deliver from recoverable reserves of natural gas in the
Huffco Contract Area sufficient natural gas (and LNG resulting from
the liquefaction thereof) to meet a portion of the Badak III Base
Net Gas Requirement and the Badak III Additional Net Gas
Requirement over the term of this Agreement consisting of 0.603
t.s.c.f., or 29.6004% thereof, subject to adjustment provided in
Section 2.4. Such quantities of net natural gas committed to be
supplied pursuant to this Agreement are herein referred to as the
"Huffco Contract Gas", and the above-stated percentage is herein
referred to as the "Producers' Percentage".

2.3 To meet the balance of the Badak III Base Net Gas
Requirement and the Badak III Additional Net Gas Requirement
constituting 1.435 t.s.c.f., subject to adjustment as provided in
Section 2.4, sufficient natural gas (and LNG resulting from the
liquefaction thereof) will be committed for supply and delivery by
Pertamina and its production sharing contractors from recoverable
reserves of natural gas in the Other Contract Areas by separate
supply agreements, similar hereto and compatible herewith, executed
and delivered concurrently herewith (such amounts are herein
collectively referred to as the "Other Contract Gas").

2.4 The amounts of net natural gas constituting the Huffco
Contract Gas and the Other Contract Gas are part of the estimates
of proved recoverable reserves of natural gas as certified by the
independent petroleum consultant firm of DeGolyer and MacNaughton
in written statements dated on or before April 10, 1986, based on
data available on January 31, 1986.

The figures for the Huffco Contract Gas, the Other Contract
Gas and the Producers' Percentage set forth in Sections 2.2 and 2.3
are based on data available as of the date of execution of this
Agreement. Such figures shall be adjusted to take into account
more accurate data in respect of the various supply sources with
regard to:

(a) field shrinkage;
(b) past and future flare and fuel use;
(c) CO2 and other inert content;
(d) plant condensate.

2.5 Upon completion of the adjustments provided for in
Section 2.4, but not later than the date of loading the initial
cargo of LNG for delivery under the Badak III LNG Sales Contract,
Pertamina and Contractors shall execute a memorandum supplemental
to this Agreement confirming the quantity of the Huffco Contract
Gas and the Other Contract Gas and the Producers' Percentage.

ARTICLE 3

The Huffco Contract Gas and the Other Contract Gas may be
produced from different fields at times and production rates which
may change from time to time during the term hereof so as to secure
the optimal ultimate recovery of natural gas. The supply of natural
gas from the Huffco Contract Area and the Other Contract Areas will
be coordinated among Pertamina, Huffco and the operators of the
Other Contract Areas so as to conserve and permit full utilization
of such natural gas. The sources of supply, producing rates,
quality of gas, metering and related matters shall be matters for
study by the East Kalimantan Gas Reserves Management Committee,
consisting of representatives from Pertamina, Huffco, Total
Indonesie and Unocal Indonesia, Ltd.

ARTICLE 4

4.1 Pertamina shall be responsible for the due and prompt
administration of the Badak III LNG Sales Contract for the benefit
of Pertamina and Contractors. All matters which affect the Badak
III LNG Sales Contract or the sale and delivery of LNG thereunder
will be administered by a representative to be appointed by
Pertamina and the representative appointed by Contractors under
Article 8. It is understood, however, that it will be necessary
from time to time for Pertamina, as seller, to take certain
administrative and operational actions without prior consultation
where immediate action is required. Contractors will be promptly
advised of such action.

4.2 Pertamina and Contractors agree to consult with each
other freely on all matters relating to the Badak III LNG Sales
Contract. Pertamina and Contractors shall confer and agree as to
any amendment to the Badak III LNG Sales Contract or to any
permitted action or election thereunder which constitutes a
material adjustment in the quantities of LNG to be sold and
delivered thereunder or change in the terms thereof. At the
request of any party hereto, a memorandum evidencing such agreement
shall be prepared as soon as feasible and signed by each party
hereto.

ARTICLE 5

5.1 Pertamina will cause the LNG resulting from the
liquefaction of the Huffco Contract Gas and the Other Contract Gas
to be transported by LNG tanker from the Bontang Plant and
delivered to Buyer at the "Delivery Point" as defined in the Badak
III LNG Sales Contract. Title to each Contractor's share of LNG
extracted from the Huffco Contract Gas shall pass to Pertamina eo
instante with the passage of title from Pertamina to Buyer.

5.2 At the time of delivery of each cargo of LNG to Buyer at
the Delivery Point, Pertamina will furnish Contractors with
appropriate documentation to evidence the quantity and quality
thereof, together with copies of the invoices to Buyer covering
such shipment. Pertamina will also furnish to Contractors a copy
of each invoice or billing delivered to Buyer on account of (a)
take-or-pay, (b) interest or (c) other payment obligation of Buyer
under the Badak III LNG Sales Contract, concurrently with its being
furnished to Buyer. Calculation of the "Contract Sales Price"
under the Badak III LNG Sales Contract, the amount of sales
invoices and other billings to Buyer, and any adjustments, shall
be reviewed and approved by Pertamina and Contractors prior to
presentation to Buyer.

ARTICLE 6

6.1 The amounts to be paid to each Contractor for its share
of the LNG resulting from the liquefaction of natural gas to be
supplied under this Agreement shall be its Production Sharing
Percentage of the Producers' Percentage of the sum of:

(a) all amounts to be paid by Buyer to Pertamina for LNG
sold and delivered under the Badak III LNG Sales Contract;

(b) all other amounts which Buyer shall become obligated
to pay pursuant to the Badak III LNG Sales Contract including,
without limitation, amounts payable:
(i) on account of LNG required to be taken but
which is not taken by Buyer;

(ii) pursuant to Paragraph 2 of the letter
between Pertamina and Buyer of even date
with the Badak III LNG Sales Contract for
deposit in the Disputed Force Majeure
Account under the Disputed Force Majeure
Account Agreement dated March 19, 1987
(herein referred to as the "Disputed Force
Majeure Account Agreement") which amounts
are subsequently distributable to Pertamina
pursuant to such letter and agreement; and

(iii) for interest accruing on overdue invoice
payments or pursuant to Paragraphs 2(b) and
(c) of the letter referred to in (ii)
above;

(c) amounts payable by insurers in respect of LNG
resulting from the liquefaction of the Huffco Contract Gas and the
Other Contract Gas; and

(d) interest earned on any of the amounts referred to in
this Section 6.1.

6.3 Throughout the term of this Agreement, all payments
referred to in Section 6.1, except as otherwise provided in
paragraph 2 of the letter referred to in Section 6.1(b)(ii), shall
be paid in U.S. Dollars, directly to Continental Bank International
in New York City (or such other leading bank in the United States
as shall be selected by Pertamina and approved by Contractors)
pursuant to a Trustee and Paying Agent Agreement, the parties to
which shall be Pertamina, Contractors, the production sharing
contractors in the Other Contract Areas and the Trustee thereunder.
Pertamina shall instruct Chemical Bank (or any successor bank under
the Disputed Force Majeure Account Agreement) in writing to the
effect that all amounts distributable by such bank to Pertamina
pursuant to Section 5 of the Disputed Force Majeure Account
Agreement shall be paid by such bank to Continental Bank
International (or its "Successor") pursuant to the said Trustee and
Paying Agent Agreement. Cargo insurance policies covering LNG
transported for sale under the Badak III LNG Sales Contract shall
specify that all proceeds shall be paid to Continental Bank
International (or its "Successor") pursuant to said Trustee and
Paying Agent Agreement. The said Trustee and Paying Agent
Agreement shall provide that amounts received by the Trustee shall
be used for payment of Financing Costs, Transportation Costs, Plant
Operating Costs and other costs approved by Pertamina and
Contractors. Amounts received by the Trustee, to the extent that
they are not used for payment of the costs referred to in the
preceding sentence, shall, insofar as they are applicable to the
Huffco Contract Gas, be disbursed to Pertamina and each Contractor
in accordance with its Production Sharing Percentage at a bank or
banks of its choice.

6.4 (a) The right of Contractors to the payments provided
for in this Article 6 shall extend throughout the term of this
Agreement and shall not be affected by the production rates or
sources of natural gas supplied from the Huffco Contract Area or
the Other Contract Areas from time to time during the term hereof.

(b) If the quantities of net natural gas produced from
the Huffco Contract Area and delivered pursuant to this Agreement
exceed in the aggregate the quantity of the Huffco Contract Gas,
the Producers' Percentage (and the revenues to be paid to Pertamina
and Contractors hereunder) will not be increased, except in the
event of an occurrence contemplated in Section 6.4(d), and
Contractors, together with Pertamina, will be credited with and
have the right to receive revenue from future marketing
opportunities in respect of a quantity of net natural gas from
reserves in the Other Contract Areas equal to such excess
quantities.

(c) If the quantities of net natural gas produced from
the Huffco Contract Area and delivered pursuant to this Agreement
are in the aggregate less than the quantity of the Huffco Contract
Gas, the Producers' Percentage (and the revenues to be paid to
Pertamina and Contractors hereunder) will not be reduced, except in
the event of an occurrence contemplated in Section 6.4(d), and the
production sharing contractors in the Other Contract Areas,
together with Pertamina, will be credited with and have the right
to receive revenue from future marketing opportunities in respect
of a quantity of net natural gas from reserves in the Huffco
Contract Area equal to excess quantities delivered from sources
within the Other Contract Areas.

(d) If an insufficiency of deliverable reserves of
natural gas shall occur which precludes the delivery from
participating fields within the Huffco Contract Area or from
participating fields within either or both of the Other Contract
Areas of the aggregate amount of natural gas committed therefrom
pursuant to this Agreement or to one or both of the supply
agreements referred to in Section 2.3 over the term thereof, then
such insufficiency shall be delivered from participating fields
within the area(s) not experiencing an insufficiency of deliverable
reserves and the Producers' Percentage shall thereupon be adjusted
(together with a corresponding adjustment to the Huffco Contract
Gas) to reflect the revised share of the net natural gas in support
of Pertamina's obligations under the Badak III LNG Sales Contract
which will be supplied and delivered from the Huffco Contract Area
over the term hereof, such adjustment in the Producers' Percentage
to apply only to payments provided for in this Article 6 received
after the date thereof. The procedure for determining (a) an
insufficiency in deliverable reserves, (b) the allocation between
the Huffco Contract Area and one of Other Contract Areas of the
right to supply any deficiency in deliveries of the Other Contract
Gas or the allocation between the Other Contract Areas of the right
to supply any deficiency in deliveries of the Huffco Contract Gas,
and (c) the calculation of the future Producers' Percentage shall
be made in accordance with principles to be decided upon by
Pertamina.

ARTICLE 7

ALL DISPUTES ARISING IN CONNECTION WITH THIS AGREEMENT SHALL
BE FINALLY SETTLED BY ARBITRATION CONDUCTED IN THE ENGLISH
LANGUAGE IN PARIS, FRANCE, BY THREE ARBITRATORS UNDER THE RULES
OF
ARBITRATION OF THE INTERNATIONAL CHAMBER OF COMMERCE.
JUDGMENT
UPON THE AWARD RENDERED MAY BE ENTERED IN ANY COURT HAVING
JURISDICTION, OR APPLICATION MAY BE MADE TO SUCH COURT FOR A
JURIDICAL ACCEPTANCE OF THE AWARD AND AN ORDER OF ENFORCEMENT,
AS
THE CASE MAY BE.

THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, UNITED STATES

OF AMERICA.

ARTICLE 8

Huffco is designated representative by Contractors for
performance on behalf of Contractors of their obligation under
Section 4.1 and for the giving of notices, responses or other
communications to and from Contractors under this Agreement.
Such representative may be changed by written notice to such
effect from Contractors to Pertamina.

ARTICLE 9

Any notices to the parties shall be in writing and sent by
mail or telex to the following addresses:

To Pertamina:

PERUSAHAAN PERTAMBANGAN MINYAK DAN GAS BUMI NEGARA
(PERTAMINA)
Jalan Medan Merdeka Timur 1 A
Jakarta, Indonesia
Attention: Head of BKKA
Cable: PERTAMINA, Jakarta, Indonesia
Telex: PERTAMINA, 44134 Jakarta
Telecopy: 5200834

To Contractors:

HUFFCO INDONESIA
6th Floor, Kuningan Plaza
South Tower
JL.H.R. Rasuna Said Kav. C11-14
P.O. Box 2828
Jakarta Selatan, Indonesia
Attention: President
Cable: Huffco
Telex: 79644421
Telecopy: 5200174 or 3800037

cc: Roy M. Huffington, Inc.
InterFirst Plaza
1100 Louisiana
P.O. Box 4455
Houston, Texas 77210
U.S.A.
Attention: President
Telex: 762-810
Telecopy: (713) 651-0104

A party may change its address by written notice to the other
parties.

ARTICLE 10

10.1 This Agreement shall not be amended or modified except
by written agreement signed by the parties hereto.

10.2 This Agreement shall inure to the benefit of, and be
binding upon, Pertamina and each Contractor, their respective
successors and assigns, provided that this Agreement shall be
assignable by a Contractor only if such Contractor concurrently
assigns to the same assignee an equal interest in the Production
Sharing Contract.

IN WITNESS WHEREOF, Pertamina and Contractors have caused
their duly authorized representatives to execute this Agreement
on the day and year first written above, but effective as of
March 19, 1987.

PERUSAHAAN PERTAMBANGAN MINYAK CONTRACTORS:
DAN GAS BUMI NEGARA (PERTAMINA)
ROY M. HUFFINGTON, INC.

BY ___________/s/______________ BY ________/s/__________

HUFFINGTON CORPORATION

BY _________/s/_________

VIRGINIA INTERNATIONAL COMPANY

BY __________/s/_________

VIRGINIA INDONESIA COMPANY

BY ___________/s/_________

ULTRAMAR INDONESIA LIMITED

BY ___________/s/_________

UNION TEXAS EAST KALIMANTAN
LIMITED

BY ___________/s/__________

UNIVERSE TANKSHIPS, INC.

BY ___________/s/__________

BONTANG LPG
SUPPLY AGREEMENT

THIS AGREEMENT, made and entered into in Jakarta the 17th
day of November, 1987, but effective as of the 15th day of July,
1986, by and between PERUSAHAAN PERTAMBANGAN MINYAK DAN GAS BUMI
NEGARA ("Pertamina"), on the one hand, and ROY M. HUFFINGTON,
INC. ("Huffco"), HUFFINGTON CORPORATION, VIRGINIA INTERNATIONAL
COMPANY, VIRGINIA INDONESIA COMPANY, ULTRAMAR INDONESIA LIMITED,
UNION TEXAS EAST KALIMANTAN LIMITED and UNIVERSE TANKSHIPS, INC.
(herein referred to collectively as "Contractors" and
individually as "Contractor"), on the other hand,

WITNESSETH:

WHEREAS, pursuant to the Production Sharing Contract, each of
Pertamina and Contractors is entitled to take and receive, sell
and freely export its respective share of the natural gas
produced and saved from the Huffco Contract Area (the percentage
share of such natural gas to which each of Pertamina and
Contractors is entitled, as determined under the Production
Sharing Contract, is herein referred to as the "Production
Sharing Percentage" of such party); and

WHEREAS, the reserves of natural gas in the Huffco Contract
Area exceed the reserves committed to be produced, supplied and
delivered by Pertamina and Contractors to meet a portion of
Pertamina's existing obligations under LNG sales contracts ("LNG
Sales Contracts") and domestic gas sales contracts; and

WHEREAS, Pertamina, with assistance from Contractors, is
constructing one additional liquefaction train, together with
such additional support facilities as may be required at the
natural gas liquefaction plant located at Bontang Bay, on the
east coast of Kalimantan, Indonesia, as well as constructing
facilities for the liquefaction, fractionation, storage and
loading of liquefied petroleum gas ("LPG") (such LPG facilities
are hereinafter referred to as the "Bontang LPG Facilities"; the
Bontang LPG Facilities, the liquefaction plant and such
additional liquefaction train and support facilities are
hereinafter referred to as the "Bontang Plant"); and

WHEREAS, Pertamina and Contractors are parties to the
Bontang LNG Processing Agreement, dated as of July 1, 1983 (as
from time to time amended, the "Processing Agreement") and will
amend the Processing Agreement to provide for the extraction of
LPG at the Bontang Plant, the operation of the Bontang Plant and
the payment of the costs of such operation (such costs as
determined in accordance with the Processing Agreement are herein
referred to as "Plant Operating Costs"); and

WHEREAS, Pertamina and Contractors have agreed to use the
Bontang LPG Facilities for the extraction of LPG from natural gas
supplied and delivered from the Huffco Contract Area and from
other contract areas in East Kalimantan (the "Other Contract
Areas"), with delivery of LPG from the Bontang LPG Facilities
commencing on or about January 1, 1989; and

WHEREAS, Pertamina, in collaboration with Contractors, its
production sharing contractors in the Other Contract Areas
(Contractors and such other production sharing contractors are
hereinafter referred to as the "Bontang Group") and Mobil Oil
Indonesia Inc. ("Mobil"), has executed seven LPG Sales and
Purchase Contracts, dated July 15, 1986, between Pertamina as
seller, and each of Nippon Petroleum Gas Co., Ltd., Idemitsu
Kosan Gas Co., Ltd., Showa Shell Sekiyu K.K., Mitsubishi
Corporation, Mitsui Liquefied Gas Co., Ltd., Kyodo Oil Co., Ltd.,
and Cosmo Oil Co., Ltd., as buyers (such contracts being
hereinafter referred to collectively as "Initial LPG Sales
Contracts" and individually as an "Initial LPG Sales Contract")
for the sale and supply of (a) LPG manufactured at the Bontang
LPG Facilities from natural gas produced by Pertamina and
Contractors from the Huffco Contract Area and by Pertamina and
its other production sharing contractors from the Other Contract
Areas and (b) LPG manufactured at the LPG facilities located in
North Sumatra (the "Arun LPG Facilities") from natural gas
produced by Pertamina and its production sharing contractor Mobil
from Contract Area B in North Sumatra. [Buyers under the Initial
LPG Sales Contracts, under LPG sales contracts entered into in
substitution for any of such contracts, or under contracts or
agreements entered into to mitigate damages under such contracts,
and Arun Bontang Project Finance Co., Ltd. ("ABPF") as assignee
under the Assignments (as hereinafter defined) are hereinafter
collectively referred to as "Buyers" and individually as a
"Buyer" and the Initial LPG Sales Contracts and any sales
contract entered into in substitution for any such contract or
any contract or agreement entered into to mitigate damages under
any such contract are hereinafter collectively referred to as
"LPG Sales Contracts" and individually as an "LPG Sales
Contract"]; and

WHEREAS, Pertamina has entered into a Memorandum on LPG
Extraction, dated January 30, 1986 (together with the
implementation agreement contemplated thereunder, the
"Compensation Memorandum"), with certain of its Japanese LNG
buyers, to compensate such LNG buyers for certain additional
costs incurred by such LNG buyers as a result of the change in
BTU value of LNG after the extraction of LPG in support of the
LPG Sales Contracts; and

WHEREAS, funds for the construction of the Bontang LPG
Facilities will be provided to Pertamina through advance payments
for LPG to be made by ABPF pursuant to a Bontang LPG Project
Advance Payment Agreement dated as of February 18, 1987 ("Advance
Payment Agreement") which provides that the Buyers (other than
ABPF) shall assign to ABPF (the "Assignments") a portion of the
LPG otherwise to be sold to such Buyers under the LPG Sales
Contracts and that settlements of the amounts payable to ABPF
pursuant to the Advance Payment Agreement will be made ordinarily
by ABPF's setting off or crediting such amounts against the
amounts due Pertamina for the purchase price of LPG bought by
ABPF pursuant to the LPG Sales Contracts and the Assignments; and

WHEREAS, Pertamina and each Contractor desires to supply and
deliver natural gas from the Huffco Contract Area in support of
the performance by Pertamina of an agreed portion of its
obligations under the LPG Sales Contracts and the Compensation
Memorandum; and

WHEREAS, each Contractor desires to dispose of its
Production Sharing Percentage of the Huffco Contract Gas (as
hereinafter defined) in accordance with the terms of this
Agreement,

NOW, THEREFORE, the parties agree as follows:

ARTICLE 1

This Agreement shall be effective as above first stated and
shall terminate on the date that the last of the LPG Sales
Contracts terminates, except that with regard to the obligations
relating to the Producers' Percentage (as hereinafter defined) of
an agreed portion of the quantities of natural gas required to
support the performance by Pertamina of its obligations under the
Compensation Memorandum, this Agreement shall terminate on the
earlier of (1) the date on which Pertamina has discharged its
obligations under the Compensation Memorandum with respect to the
Bontang LNG facilities and (2) the date that the last of the LNG
Sales Contracts terminates.

ARTICLE 2

2.1 The aggregate quantities of LPG to be sold and
delivered by Pertamina and purchased and received by Buyers
pursuant to the Initial LPG Sales Contracts, as of the date
hereof, are 363,000 metric tons in the build-up year 1988 and
1,950,000 metric tons in each "Fixed Quantity Period" (as defined
in the Initial LPG Sales Contracts) thereafter. Of the 363,000
metric tons to be delivered to Buyers in the build-up year 1988
the Arun LPG Facilities shall supply the entire quantity.

The quantities of LPG to be sold and delivered by
Pertamina and purchased and received by any given Buyer pursuant
to its LPG Sales Contract during a Fixed Quantity Period (with
respect to each Initial LPG Sales Contract such quantities are
defined therein as the "Fixed Quantity") are hereinafter referred
to as the "Buyer's Fixed Quantity". Each Buyer's Fixed Quantity
is subject to adjustment pursuant to Article 5.2 of its
respective Initial LPG Sales Contract or under similar provisions
of other LPG Sales Contracts. Determination of such adjustment
shall be a matter of prior consultation and agreement between
Pertamina and Contractors.

It is agreed among the parties that the entire
quantity of LPG produced at the Bontang LPG Facilities and the
Arun LPG Facilities in any Fixed Quantity Period shall be sold
under the LPG Sales Contracts and scheduled for lifting in
accordance therewith to the extent permitted by the terms of the
LPG Sales Contracts.

The aggregate quantity of LPG to be produced and
sold from the Bontang LPG Facilities under the LPG Sales
Contracts for each Fixed Quantity Period is herein referred to as
the "Bontang Supply Requirement" and the aggregate quantity of
LPG to be produced and sold from the Arun LPG Facilities for the
same Fixed Quantity Period is herein referred to as the "Arun
Supply Requirement".

2.2(a) The Arun LPG Facilities shall supply the entire
quantity to be delivered to Buyers in the build-up year 1988.
Subject to (b) and (c) below, the Bontang Supply Requirement and
the Arun Supply Requirement for each Fixed Quantity Period after
the build-up year, shall be respectively the anticipated
production of LPG from the Bontang LPG Facilities for the
relevant Fixed Quantity Period and the anticipated production of
LPG from the Arun LPG Facilities for the same Fixed Quantity
Period. In both cases the anticipated production shall form the
basis of the notice establishing each Buyer's Fixed Quantity
given pursuant to Article 5.2 of the Initial LPG Sales Contracts
or pursuant to any similar provision of other LPG Sales
Contracts.

(b) Subject to (c) below, if the sum of the Bontang
Supply Requirement and Arun Supply Requirement established under
(a) above is greater than the aggregate of the "Buyer's Fixed
Quantities" for the relevant Fixed Quantity Period, then the
Bontang Supply Requirement shall be 17.948718 percent of such
aggregate and the Arun Supply Requirement shall be 82.051282
percent of such aggregate.

(c) If the Bontang Supply Requirement resulting from
the application of (b) above is greater than the anticipated
production of LPG from the Bontang LPG Facilities as determined
under (a) above for the relevant Fixed Quantity Period, then the
Bontang Supply Requirement shall be equal to such anticipated
production from the Bontang LPG Facilities and the Arun Supply
Requirement shall be the aggregate of the "Buyer's Fixed
Quantities" minus such anticipated Bontang production. If the
Arun Supply Requirement resulting from the application of (b)
above is greater than the anticipated production of LPG from the
Arun LPG Facilities as determined under (a) above for the same
Fixed Quantity Period, then the Arun Supply Requirement shall be
equal to such anticipated production from the Arun LPG Facilities
and the Bontang Supply Requirement shall be the aggregate of the
"Buyer's Fixed Quantities" minus such anticipated Arun
production.

2.3(a) To the extent possible, all deliveries of LPG to
each Buyer shall be scheduled over each Fixed Quantity Period to
ensure that deliveries are made to each Buyer from each of the
Bontang LPG Facilities and the Arun LPG Facilities in proportion
to their respective supply requirements.

(b) To the extent either the Bontang LPG Facilities or
the Arun LPG Facilities are unable to make available sufficient
quantities of LPG to meet such facilities' supply requirement for
any Fixed Quantity Period for any reason other than failure or
inability of a Buyer to take available quantities of LPG (whether
or not excused by reason of an event of "Force Majeure", as such
event is defined in the LPG Sales Contract, affecting such
Buyer), the shortfall shall be scheduled for delivery by the
other LPG facilities to the extent they can supply the same
within the same Fixed Quantity Period.

The supply requirement of the LPG facilities
experiencing the shortfall shall be decreased for such Fixed
Quantity Period during which a shortfall occurs, by the scheduled
quantity which such LPG facilities were unable to supply, and the
supply requirement of the other LPG facilities shall be increased
for such Fixed Quantity Period by the quantity actually delivered
by such other LPG facilities with respect to the shortfall.

No adjustment of a Bontang Supply Requirement or an
Arun Supply Requirement for any Fixed Quantity Period pursuant to
this paragraph (b) shall operate to modify the Bontang Supply
Requirement or the Arun Supply Requirement to be delivered in any
other Fixed Quantity Period.

ARTICLE 3

3.1 The total quantity of net natural gas required to
be supplied and delivered out of recoverable reserves of natural
gas in East Kalimantan for liquefaction and sale as LPG under the
LPG Sales Contracts, to maintain deliveries of LNG following
extraction of LPG, and to support an agreed proportion of the
performance by Pertamina of its obligations under the
Compensation Memorandum is estimated to be 0.204 trillion
standard cubic feet ("t.s.c.f."); such quantity is herein
referred to as the "LPG Net Gas Requirement".

The LPG Net Gas Requirement is subject to revision
from time to time to account for the actual quantities of LPG
produced at the Bontang Plant and which Buyers may purchase and
lift under the LPG Sales Contracts or side letters thereto.

3.2 Pertamina and Contractors hereby commit and agree
to supply and deliver from recoverable reserves of natural gas in
the Huffco Contract Area sufficient natural gas (and LNG
resulting from the liquefaction thereof and LPG extracted
therefrom) to meet a portion of the LPG Net Gas Requirement over
the term of this Agreement consisting of 0.060 t.s.c.f., or
29.6004% thereof, subject to adjustment as provided in Section
3.4. Such quantities of net natural gas committed to be supplied
pursuant to this Agreement are herein referred to as the "Huffco
Contract Gas", and the above-stated percentage is herein referred
to as the "Producers' Percentage".

3.3 To meet the balance of the LPG Net Gas Requirement
constituting 0.144 t.s.c.f., subject to adjustment as provided in
Section 3.4, sufficient natural gas (and LNG resulting from the
liquefaction thereof and LPG extracted therefrom) will be
committed for supply and delivery by Pertamina and its production
sharing contractors from recoverable reserves of natural gas in
the Other Contract Areas by separate supply agreements, similar
hereto and compatible herewith, executed and delivered
concurrently herewith (such amounts are herein collectively
referred to as the "Other Contract Gas").

3.4 The amounts of net natural gas constituting the
Huffco Contract Gas and the Other Contract Gas are part of the
estimates of proved recoverable reserves of natural gas as
certified by the independent petroleum consultant firm of
DeGolyer and MacNaughton in written statements dated on or before
April 10, 1986, based on data available on January 31, 1986.

The figures for the Huffco Contract Gas, the Other
Contract Gas and the Producers' Percentage set forth in Sections
3.2 and 3.3 are based on data available as of the date of
execution of this Agreement. Such figures shall be adjusted to
take into account more accurate data in respect of the various
supply sources with regard to:

(a) field shrinkage;
(b) past and future flare and fuel use;
(c) CO2 and other inert content;
(d) plant condensate.

3.5 Upon completion of the adjustments provided for in
Section 3.4, but not later than the date of loading the initial
cargo of LPG for delivery under the LPG Sales Contracts,
Pertamina and Contractors shall execute a memorandum supplemental
to this Agreement confirming the quantity of the Huffco Contract
Gas and the Other Contract Gas and the Producers' Percentage.

ARTICLE 4

The Huffco Contract Gas and the Other Contract Gas
may be produced from different fields at times and production
rates which may change from time to time during the term hereof
so as to secure the optimal ultimate recovery of natural gas. The
supply of natural gas from the Huffco Contract Area and the Other
Contract Areas will be coordinated among Pertamina, Huffco and
the operators of the Other Contract Areas so as to conserve and
permit full utilization of such natural gas. The sources of
supply, producing rates, quality of gas, metering and related
matters shall be matters for study by the East Kalimantan Gas
Reserves Management Committee, consisting of representatives from
Pertamina, Huffco, Total Indonesie and Unocal Indonesia, Ltd.

ARTICLE 5

5.1 Pertamina shall be responsible for the due and
prompt administration of the LPG Sales Contracts for the benefit
of Pertamina and Contractors. All matters which affect the LPG
Sales Contracts or the sale and delivery of LPG thereunder will
be administered by a representative to be appointed by Pertamina
and the representative appointed by Contractors under Article 8.
It is understood, however, where immediate action is required, it
will be necessary from time to time for Pertamina, as seller, to
take certain administrative and operational actions without prior
consultation. Contractors will be promptly advised of such
action.

5.2 Pertamina and Contractors agree to consult with
each other freely on all matters relating to the LPG Sales
Contracts or otherwise relating to the manufacture, sale or
disposition of LPG produced at the Bontang LPG Facilities.
Pertamina and Contractors shall confer and agree as to any
amendment to the LPG Sales Contracts and as to any permitted
action or election thereunder which constitutes a material
adjustment in the quantities of LPG to be sold and delivered
thereunder or change in the terms thereof. At the request of any
party hereto, a memorandum evidencing such agreement shall be
prepared as soon as feasible and signed by each party hereto.

5.3 Pertamina will cause the LPG produced from the
Huffco Contract Gas and the Other Contract Gas to be delivered to
Buyers at the "Delivery Point" as defined in the LPG Sales
Contracts. Title to each Contractor's share of LPG will pass to
Pertamina eo instante with the passage of title from Pertamina to
Buyers.

5.4 At the time of delivery of each cargo of LPG from
the Bontang Plant to a Buyer at the Delivery Point, Pertamina
will furnish Contractors with appropriate documentation to
evidence the quantity and quality thereof, together with copies
of the invoices to such Buyer covering such shipment. Pertamina
will also furnish to Contractors a copy of each invoice or other
billing delivered to a Buyer on account of (a) damages resulting
from such Buyer's failure to meet its "Lifting Obligation" as
defined in the relevant LPG Sales Contract; (b) interest; or (c)
other payment obligations of said Buyer under the LPG Sales
Contract insofar as the same relates to LPG scheduled for
delivery from the Bontang LPG Facilities, concurrently with its
being furnished to the Buyer. Calculation of the "Contract Sales
Prices" under the LPG Sales Contracts, the amount of sales
invoices and other billings to Buyers, and any adjustments shall
be reviewed and approved by Pertamina and Contractors prior to
presentation to Buyers.

5.5 In the event a Buyer fails, or if it is anticipated
that a Buyer will be unable, to take delivery of a quantity of
LPG from the Bontang LPG Facilities when so required in
accordance with the terms of the applicable LPG Sales Contract,
Pertamina and Contractors shall agree on the measures to be taken
to dispose of such LPG or, if necessary, to curtail the
manufacture of LPG at the Bontang LPG Facilities. It is
understood that the measures to be taken should avoid adversely
affecting Pertamina's obligations under the LNG Sales Contracts.
If Pertamina and Contractors are unable to agree on the measures
to be taken, each shall have the right to take and receive, sell
and freely export its Production Sharing Percentage of the
Producers' Percentage of such LPG.

ARTICLE 6

6.1 The amounts to be paid to each Contractor for its
share of the LPG produced from natural gas to be supplied under
this Agreement shall be its Production Sharing Percentage of the
Producers' Percentage of the sum of:

(a) all amounts to be paid by Buyers to Pertamina for
LPG sold and delivered from the Bontang LPG Facilities under the
LPG Sales Contracts and the Assignments;

(b) all other amounts which Buyers shall become
obligated to pay pursuant to the LPG Sales Contracts and the
Assignments, with regard to LPG scheduled for shipment from the
Bontang LPG Facilities, including, without limitation, amounts
payable:

(i) for damages payable by a Buyer to Pertamina
pursuant to Article 5.5 of the Initial LPG
Sales Contracts resulting from such Buyer's
failure to meet its "Lifting Obligation" (as
defined in the relevant Initial LPG Sales
Contract), or under similar provisions of
other LPG Sales Contracts, with respect to
any shipment scheduled from the Bontang LPG
Facilities; and

(ii) for interest accruing on overdue invoice
payments; and

6.2 In order to arrange for the receipt by each
Contractor of the payments to which such Contractor is entitled
under Section 6.1, Pertamina hereby assigns to each Contractor
that Contractor's Production Sharing Percentage of the Producers'
Percentage of all amounts referred to in Section 6.1, other than
amounts payable by ABPF, as assignee under the Assignments, which
are set off or credited against amounts due ABPF or paid to the
"Payment Trustee" pursuant to the Advance Payment Agreement.

6.3 Throughout the term of this Agreement, all payments
referred to in Section 6.1 shall be paid in U.S. Dollars,
directly to Continental Bank International in New York City (or
such other leading bank in the United States as shall be selected
by Pertamina and approved by Contractors) pursuant to a Trustee
and Paying Agent Agreement, the parties to which shall be
Pertamina, Contractors, the production sharing contractors in the
Other Contract Areas and the Trustee thereunder. The Trustee and
Paying Agent Agreement shall provide that amounts received by the
Trustee shall be used for payment of an agreed portion of Plant
Operating Costs and other costs approved by Pertamina and
Contractors. Amounts received by the Trustee, to the extent that
they are not used for payment of the costs referred to in the
preceding sentence, shall, insofar as they are applicable to the
Huffco Contract Gas, be disbursed to Pertamina and each
Contractor in accordance with its Production Sharing Percentage
at a bank or banks of its choice.

6.4(a) The right of Contractors to the payments provided
for in this Article 6 shall extend throughout the term of this
Agreement and shall not be affected by the production rates or
sources of natural gas supplied from the Huffco Contract Area or
the Other Contract Areas from time to time during the term
hereof.

(b) If the quantities of net natural gas produced from
the Huffco Contract Area and delivered pursuant to this Agreement
exceed in the aggregate the quantity of the Huffco Contract Gas,
the Producers' Percentage (and the revenues to be paid to
Pertamina and Contractors hereunder) will not be increased,
except in the event of an occurrence contemplated in Section
6.4(d), and Contractors, together with Pertamina, will be
credited with and have the right to receive revenue from future
marketing opportunities in respect of a quantity of net natural
gas from reserves in the Other Contract Areas equal to such
excess quantities.

(c) If the quantities of net natural gas produced from
the Huffco Contract Area and delivered pursuant to this Agreement
are in the aggregate less than the quantity of the Huffco
Contract Gas, the Producers' Percentage (and the revenues to be
paid to Pertamina and Contractors hereunder) will not be reduced,
except in the event of an occurrence contemplated in Section
6.4(d), and the production sharing contractors in the Other
Contract Areas, together with Pertamina, will be credited with
and have the right to receive revenue from future marketing
opportunities in respect of a quantity of net natural gas from
reserves in the Huffco Contract Area equal to excess quantities
delivered from sources within the Other Contract Areas.

(d) If an insufficiency of deliverable reserves of
natural gas shall occur which precludes the delivery from
participating fields within the Huffco Contract Area or from
participating fields within either or both of the Other Contract
Areas of the aggregate amount of natural gas committed therefrom
pursuant to this Agreement or to one or both of the supply
agreements referred to in Section 3.3 over the term thereof, then
such insufficiency shall be delivered from participating fields
within the area(s) not experiencing an insufficiency of
deliverable reserves and the Producers' Percentage shall
thereupon be adjusted (together with a corresponding adjustment
to the Huffco Contract Gas) to reflect the revised share of the
net natural gas in support of Pertamina's obligations under the
LPG Sales Contracts, to maintain deliveries of LNG following
extraction of LPG, and to support performance by Pertamina of its
obligations under the Compensation Memorandum which will be
supplied and delivered from the Huffco Contract Area over the
term hereof, such adjustment in the Producers' Percentage to
apply only to payments provided for in this Article 6 received
after the date thereof. The procedure for determining (a) an
insufficiency in deliverable reserves, (b) the allocation between
the Huffco Contract Area and one of the Other Contract Areas of
the right to supply any deficiency in deliveries of the Other
Contract Gas or the allocation between the Other Contract Areas
of the right to supply any deficiency in deliveries of the Huffco
Contract Gas, and (c) the calculation of the future Producers'
Percentage shall be made in accordance with principles to be
decided upon by Pertamina.

ARTICLE 7

ALL DISPUTES ARISING IN CONNECTION WITH THIS AGREEMENT SHALL
BE FINALLY SETTLED BY ARBITRATION CONDUCTED IN THE ENGLISH
LANGUAGE IN PARIS, FRANCE, BY THREE ARBITRATORS UNDER THE RULES
OF ARBITRATION OF THE INTERNATIONAL CHAMBER OF COMMERCE.
JUDGMENT UPON THE AWARD RENDERED MAY BE ENTERED IN ANY COURT
HAVING JURISDICTION, OR APPLICATION MAY BE MADE TO SUCH COURT FOR
A JURIDICAL ACCEPTANCE OF THE AWARD AND AN ORDER OF
ENFORCEMENT,
AS THE CASE MAY BE.

THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, UNITED STATES
OF AMERICA.

ARTICLE 8

Huffco is designated representative by Contractors for
performance on behalf of Contractors of their obligation under
Section 5.1 and for the giving of notices, responses or other
communications to and from Contractors under this Agreement.
Such representative may be changed by written notice to such
effect from Contractors to Pertamina.

ARTICLE 9

Any notices to the parties shall be in writing and sent to
the following addresses:

To Pertamina:

PERUSAHAAN PERTAMBANGAN MINYAK DAN GAS BUMI NEGARA
("PERTAMINA")
Jalan Medan Merdeka Timur 1 A
Jakarta, Indonesia
Attention: Head of BKKA

Cable: PERTAMINA, Jakarta, Indonesia
Telex: Pertamina, 44134 Jakarta
Telecopy: 343882

To Contractors:

HUFFCO INDONESIA
6th Floor, Kuningan Plaza
South Tower
JL.H.R. Rasuna Said Kav. C11-14
P.O. Box 2828
Jakarta Selatan, Indonesia
Attention: President

Cable: HUFFCO
Telex: 79644421
Telecopy: 5200174 or 3800037

cc: Roy M. Huffington, Inc.
InterFirst Plaza
P.O. Box 4455, 1100 Louisiana
Houston, Texas 77210
U.S.A.
Attention: President

Telex: 762-810
Telecopy: (713) 651-0104

A party may change its address by written notice to the other
parties.

ARTICLE 10

10.1 This Agreement shall not be amended or modified
except by written agreement signed by the parties hereto.

10.2 This Agreement shall inure to the benefit of, and
be binding upon, Pertamina and each Contractor, their respective
successors and assigns, provided that this Agreement shall be
assignable by a Contractor only if such Contractor concurrently
assigns to the same assignee an equal interest in the Production
Sharing Contract.

IN WITNESS WHEREOF, Pertamina and Contractors have caused
their duly authorized representatives to execute this Agreement
the day and year first written above, but effective as of
July 15, 1986.

PERUSAHAAN PERTAMBANGAN MINYAK CONTRACTORS:
DAN GAS BUMI NEGARA (PERTAMINA)
ROY M. HUFFINGTON, INC.

BY ___________/s/_____________ BY __________/s/__________

HUFFINGTON CORPORATION

BY __________/s/__________

VIRGINIA INTERNATIONAL COMPANY

BY __________/s/__________

VIRGINIA INDONESIA COMPANY

BY __________/s/__________

ULTRAMAR INDONESIA LIMITED

BY __________/s/__________

UNION TEXAS EAST KALIMANTAN
LIMITED

BY __________/s/__________

UNIVERSE TANKSHIPS, INC.

BY __________/s/__________

BONTANG III

PRODUCERS AGREEMENT

PERUSAHAAN PERTAMBANGAN MINYAK DAN GAS BUMI NEGARA
ROY M. HUFFINGTON, INC.
HUFFINGTON CORPORATION
VIRGINIA INTERNATIONAL COMPANY
VIRGINIA INDONESIA COMPANY
ULTRAMAR INDONESIA LIMITED
UNION TEXAS EAST KALIMANTAN LIMITED
UNIVERSE TANKSHIPS, INC.
TOTAL INDONESIE
UNOCAL INDONESIA, LTD.
INDONESIA PETROLEUM, LTD.

in favor of

TRAIN-E FINANCE CO., LTD.
as Tranche A Lender,

THE INDUSTRIAL BANK OF JAPAN TRUST COMPANY
as Agent for the Tranche B Lenders
and as Tranche B Lender,

and the other Tranche B Lenders named herein

Dated as of February 9, 1988

<PAGE>
TABLE OF CONTENTS

Page
PART 1: PRODUCERS' AGREEMENTS

1.1 Authorization of Borrowings. . . . . . . . . . . . . 3
1.2 Approval of Expenditures . . . . . . . . . . . . . . 3
1.3 Rights to Bontang Plant and Improvements . . . . . . 3
1.4 No Amendments, etc.. . . . . . . . . . . . . . . . . 4
1.5 Compliance with Agreements . . . . . . . . . . . . . 5
1.6 Enforcement of Agreements. . . . . . . . . . . . . . 5
1.7 Operation of Bontang Plant . . . . . . . . . . . . . 6
1.8 Replacement of Trustees. . . . . . . . . . . . . . . 6
1.9 Indebtedness; Permitted Amounts. . . . . . . . . . . 8
1.10 Negative Pledge. . . . . . . . . . . . . . . . . . . 8
1.11 Insurance. . . . . . . . . . . . . . . . . . . . . . 9
1.12 Reserve Reports. . . . . . . . . . . . . . . . . . .10
1.13 Use of Proceeds. . . . . . . . . . . . . . . . . . .10
1.14 Construction of Train E and Receiving Facilities 11
1.15 Notices Relating to Source of Debt Service and
Contingent Support . . . . . . . . . . . . . . . . . . . .11
1.16 Effect of Certain Reductions of Source of Debt
Service. . . . . . . . . . . . . . . . . . . . . . . . . .12
1.17 Payment Instructions . . . . . . . . . . . . . . . .12
1.18 Payment of Contingent Supports . . . . . . . . . . .14
1.19 Spot Sales and Long Term Sale Contracts. . . . . . .15
1.20 Debt Service Accounts; Contingent
Support Accounts . . . . . . . . . . . . . . . . . . . . .16
1.21 Expenses . . . . . . . . . . . . . . . . . . . . . .17

PART 2: REPRESENTATIONS AND WARRANTIES

2.1 Due Incorporation; Power and Authority . . . . . . .17
2.2 Legal Action . . . . . . . . . . . . . . . . . . . .17
2.3 Restrictions . . . . . . . . . . . . . . . . . . . .18
2.4 Registrations and Approvals. . . . . . . . . . . . .18
2.5 Agreement Binding; No Defaults . . . . . . . . . . .18
2.6 Litigation . . . . . . . . . . . . . . . . . . . . .18
2.7 Compliance with Other Instruments, etc.. . . . . . .19
2.8 Other Agreements . . . . . . . . . . . . . . . . . .19
2.9 Insurance. . . . . . . . . . . . . . . . . . . . . .19
2.10 No Encumbrance . . . . . . . . . . . . . . . . . . .19
2.11 No Material Adverse Change . . . . . . . . . . . . .19

PART 3: DEFAULTS

3.1 Default Defined. . . . . . . . . . . . . . . . . . .20
3.2 Remedy for Default . . . . . . . . . . . . . . . . .21
3.3 Diversion and Remedy . . . . . . . . . . . . . . . .22
3.4 Liability Share Defined. . . . . . . . . . . . . . .23
3.5 Notices. . . . . . . . . . . . . . . . . . . . . . .24

PART 4: INSURED LOSS

4.1 Effect of Total Loss of Train E Prior to Operational
Acceptance . . . . . . . . . . . . . . . . . . . . . . . .24
4.2 Effect of Total Loss of Bontang Plant . . . . . . . .25
4.3 Insurance Shortfall . . . . . . . . . . . . . . . . .26
4.4 Other Losses. . . . . . . . . . . . . . . . . . . . .26

PART 5: SCOPE OF PRODUCERS' LIABILITIES

PART 6: MISCELLANEOUS

6.1 Notices. . . . . . . . . . . . . . . . . . . . . . .27
6.2 No Waiver; Remedies Cumulative . . . . . . . . . . .28
6.3 Assignment; Successors and Assigns; Participations 28
6.4 Amendments . . . . . . . . . . . . . . . . . . . . .29
6.5 Counterparts . . . . . . . . . . . . . . . . . . . .30
6.6 Section Headings . . . . . . . . . . . . . . . . . .30
6.7 Governing Law. . . . . . . . . . . . . . . . . . . .30
6.8 Consent to Jurisdiction. . . . . . . . . . . . . . .30
6.9 Severability . . . . . . . . . . . . . . . . . . . .31
6.10 Reinstatement. . . . . . . . . . . . . . . . . . . .32
6.11 Confidentiality. . . . . . . . . . . . . . . . . . .32

Schedule 1 Liability Share Percentages
<PAGE>
BONTANG III

PRODUCERS AGREEMENT

Dated as of
February 9, 1988

Train-E Finance Co., Ltd., as Tranche A Lender,
and
The Industrial Bank of Japan Trust Company,
as Agent for the Tranche B Lenders,
under the Loan Agreement

Dear Sirs:

Each of the undersigned Producers confirms that it has
authorized and requested the Trustee to enter into the Loan
Agreement. In connection therewith, the undersigned Producers
hereby confirm for your benefit and for the benefit of the other
parties to such Loan Agreement executing this Agreement, any
permitted successor or successors to your or their interests
thereunder and the holders of the Notes referred to in such Loan
Agreement the matters set forth below.

* * * * *

As used above and below in this Agreement, the following
capitalized expressions shall have the meanings set forth below,
such meanings to be applicable to both the singular and plural
forms of such expressions.

"Approved Institutions" means the United States
headquarters or a United States branch of the following financial
institutions: (i) any branch or affiliate of Continental Bank
International with the power to act as Trustee or (ii) any other
bank, trust company or financial institution (in each case with
trust powers) which (1) has a net worth in excess of
$100,000,000.00 or (2) has outstanding debt securities rated A or
better by Standard and Poors' Corporation or its equivalent by
Moody's Investors Service or another nationally recognized rating
agency in the United States.

"Bontang Excess Sales Trustee" has the meaning set forth
in Article 1 of the Trust Agreement.

"Bontang I Trustee" has the meaning set forth in Article
1 of the Trust Agreement.

"Default" has the meaning set forth in Section 3.1
hereof.

"Default Shortfall" has the meaning set forth in Section
3.2 hereof.

"Diversion" has the meaning set forth in Section 3.3
hereof.

"Diversion Shortfall" has the meaning set forth in
Section 3.3 hereof.

"Gas Supply Area" has the meaning set forth in Section
1.12(a) hereof.

"Insurance Shortfall" has the meaning set forth in
Section 4.3 hereof.

"Jilco" means Japan Indonesia LNG Co., Ltd.

"Liability Share" has the meaning set forth in Section
3.4 hereof.

"Loan Agreement" means the Bontang III Loan Agreement,
dated as of the date hereof, among the Trustee, as borrower
thereunder, the Tranche A Lender, the Tranche B Lenders and the
Agent and the Lead Managers parties thereto, as hereafter amended.

"1974 Development Agreement" means the Loan Agreement for
Badak dated as of May 17, 1974, between Pertamina and Jilco, as
heretofore and hereafter amended.

"1981 Development Agreement" means the Badak Expansion
LNG Facility Development Agreement dated as of June 10, 1981
between Pertamina and Jilco, as heretofore and hereafter amended.

"Plant Insurance" has the meaning set forth in Section
1.11(b) hereof.

"Plant Insurance Proceeds" has the meaning set forth in
Section 1.11(b) hereof.

"Special Long Term Sales Trustee" has the meaning set
forth in Article 1 of the Trust Agreement.

"Trustee" means Continental Bank International, as
Bontang III Trustee under the Trust Agreement, and its successors
thereunder pursuant to Section 1.8 hereof.

In addition to the definitions set forth above, and
except as otherwise provided in this Agreement, capitalized
expressions which are defined in the Loan Agreement are used herein
with the meanings defined in the Loan Agreement, unless the context
shall otherwise specifically require.
* * * * *

PART 1
PRODUCERS' AGREEMENTS

Each of the Producers covenants to the Lenders solely as to
itself until payment in full of the principal of and interest on
the Notes and payment in full of all amounts owing under the Loan
Agreement at the time of such payment in full of such Notes, unless
compliance with the provisions of this Part 1 shall have been
waived by the Majority Lenders, to do and perform the following:

1.1 Authorization of Borrowings. Each of the Producers
has reviewed the Loan Agreement and has authorized and requested
the Borrower to enter into the Loan Agreement, not in its
individual capacity but solely as Trustee under the Trust
Agreement, to make and repay Borrowings, to pay interest on the
Borrowings, to pay other amounts and to perform the other
obligations of the Borrower, all of the foregoing under and in
accordance with the terms of the Loan Agreement. For purposes of
effecting each Borrowing, each Producer other than Pertamina has
duly authorized Pertamina and designated Pertamina as its agent
with full power and authority on behalf of such Producer to
authorize and request the Borrower to effect such Borrowing or to
designate an entity and individuals in accordance with the Trust
Agreement to do the same, or both. Pertamina agrees to perform on
its own behalf and on behalf of the other Producers the obligations
authorized pursuant to, and accepts the designation contained in,
this Section 1.1 and in the Trust Agreement.

1.2 Approval of Expenditures. The Producers confirm
that in accordance with Article 10 of the Processing Agreement they
have made arrangements among themselves whereby, and the Producers
hereby covenant to the Lenders that, all invoices of project
creditors shall be approved or disapproved in good faith in
accordance with objective standards customarily followed in the oil
and gas industry in construction activities of the sort
contemplated.

1.3 Rights to Bontang Plant and Improvements. The
Producers agree that Pertamina shall exclusively hold and shall
continue to maintain title to the Bontang Plant, and all rights and
interests in and to the Bontang Plant, subject with respect to
Pertamina's rights and interests to rights and interests created
under the Basic Agreements and any rights and interests created in
other parties which do not, and will not during any Contingent
Support Period, adversely affect the processing of LNG thereat in
the amounts and in the manner contemplated by the Processing
Agreement for sale under the LNG Sales Contract and under the Chubu
Sales Contract, the 1973 LNG Sales Contract or the Korean Quanti-
ties Agreement, and Pertamina agrees that it will not create, incur
or suffer to exist any Encumbrances on the Bontang Plant, except
for Encumbrances arising pursuant to statute or otherwise by
operation of law, which shall be discharged in the ordinary course
of business and shall not be enforced by attachment or levy.

<PAGE>
1.4 No Amendments, etc. Each of the Producers agrees:

(a) with respect to the Trust Agreement and each
Contingent Support Trust Agreement, such Producer shall not (i)
terminate or revoke such Trust Agreement or Contingent Support
Trust Agreement, or (ii) amend, modify, revise, supplement or waive
any of the provisions of (1) Article 1, 4 or 10 or Section 2.1,
2.2, 2.4, 2.5, 3.1, 3.2, 3.3, 3.7 or 6.1 or the second sentence of
Section 8.2 of the Trust Agreement, in each case other than to
permit the Borrower to enter into Subordinated Indebtedness, (2)
Article 1, 6 or 9 or Section 2.1, 2.2, 2.4, 2.5, 3.1, 3.2, the last
sentence of Section 4.1 or the second sentence of each of Sections
7.2 and 10.2 of the Bontang Excess Sales Trust Agreement, (3) the
Definitions, Article 2, 3, 4 or 10 or Section 1.1, 1.2, 1.4, 1.5,
1.6, 1.7, 5.1, 5.2, the last sentence of each of Sections 6.1 and
7.1, or Section 8.2(b), 14.1, 14.2 or 14.6 of the Bontang I Trust
Agreement, (4) such Sections of each Special Long Term Sales Trust
Agreement relating to those matters that are comparable to the
foregoing which the Majority Lenders may require or (5) any other
provision of the Trust Agreement or any Contingent Support Trust
Agreement, if any such amendment, modification, revision, supple-
ment or waiver would or would be likely to affect adversely the
trust created under the Trust Agreement or any Contingent Support
Trust Agreement, the rights of the Lenders under the Loan Agreement
or Notes or the ability of the Borrower to perform its obligations
under such Loan Agreement or Notes or (iii) change or agree to the
change of the trustee thereunder, except as contemplated by Section
1.8 hereof;

(b) except as contemplated by Section 1.16 hereof, with
respect to each Basic Agreement, each Contingent Support Agreement
and the Korean Sales Contract to which it is a party, such Producer
shall not (i) terminate or revoke such Basic Agreement, Contingent
Support Agreement or Korean Sales contract or (ii) amend, modify,
revise, supplement or waive any of the provisions of such Basic
Agreement, Contingent Support Agreement or Korean Sales Contract if
any such amendment, modification, revision, supplement or waiver
would or would be likely to (1) cause the Debt Coverage Ratio under
the Loan Agreement at any time that amounts are outstanding
thereunder to be less than 200% or adversely affect the payment to
the Lenders under the Loan Agreement of any amounts thereunder if
the Debt Coverage Ratio already is or is likely to be less than
200%, or (2) conflict with or affect adversely the rights of the
Lenders under the Loan Agreement or Notes or the obligations of the
Borrower under the Loan Agreement, Notes or Trust Agreement or
conflict with or impair the obligations of the Producers pursuant
to this Agreement (other than an assignment permitted pursuant to
Section 6.3 hereof); and

(c) with respect to the LNG Sales Contract, Pertamina
shall not (i) consent to the Buyer's assignment or delegation of
any of the Buyer's rights or obligations under such LNG Sales
Contract or (ii) amend, modify, revise, supplement or waive the
definitions of Start-up and Receiving Facilities contained therein
or alter the use or meaning of such definitions.

Any consent of the Majority Lenders necessary to permit any action
otherwise prohibited by this Section 1.4 shall not be unreasonably
withheld. Each of the Producers shall promptly provide or cause to
be provided to the Tranche A Lender and the Agent copies of any
agreement or document evidencing any amendment, modification,
revision, supplement or waiver of any of the Trust Agreement, the
Contingent Support Trust Agreements, the Basic Agreements or the
Contingent Support Agreements to which it is a party or of any
provision of any thereof not requiring the consent of the Lenders
pursuant to this Section 1.4 and, in the case of an amendment to
the Trust Agreement providing for Subordinated Indebtedness with
respect to amounts to be held and distributed under the Trust
Agreement, copies of the proposed amendment not less than 10
Business Days prior to execution thereof.

1.5 Compliance with Agreements. Each of the Producers
agrees that it will duly perform in a timely manner each obligation
contemplated to be performed by it under this Agreement and the
Trust Agreement, including, without limitation, (a) giving notices,
instructions, certificates (including, without limitation,
certificates as to the accuracy of the representations and
warranties set forth in this Agreement and the compliance by the
Producers with the terms of this Agreement), approvals and
communications necessary or appropriate in order (i) to effect
Borrowings, repayments and payments by the Trustee as Borrower
under and in accordance with the terms of the Loan Agreement and
(ii) to permit the Borrower to perform its other obligations under
the Loan Agreement, (b) providing financial and other information
to the Trustee to be supplied to the Lenders under and in
accordance with the Loan Agreement, and (c) giving of other
notices, instructions, approvals and communications contemplated by
the Trust Agreement. Each of the Producers that is a party thereto
also agrees duly to perform its obligations under the Construction
Agreement, Supply Agreements and LNG Sales Contract, except in
respects which are not material and not likely to give rise to the
assertion of a claim for breach thereunder, and to perform in all
material respects the terms of the other Basic Agreements, the
Contingent Support Agreements and the Contingent Support Trust
Agreements to which it is a party, as the same may be amended from
time to time as permitted by Section 1.4 hereof, but in the case of
the Contingent Support Agreements and the Contingent Support Trust
Agreements only to the extent related to Contingent Support or
Source of Contingent Support. Pertamina shall insure that one or
more appropriate LNG sales contracts is or are designated as the
"Designated LNG Sales Contract(s)" pursuant to Section 2 of the
Korean Quantities Agreement.

1.6 Enforcement of Agreements. The Producers agree
that, if the Borrower shall fail to perform any of its obligations
under the Trust Agreement or if during any Contingent Support
Period any relevant trustee under a Contingent Support Trust
Agreement shall fail to perform any of its obligations under such
Contingent Support Trust Agreement with respect to amounts which
constitute Source of Contingent Support or Contingent Support, then
the Producers shall give written notice to the Borrower or such
trustee as promptly as practical under the circumstances demanding
that all of the Borrower's obligations under the Trust Agreement or
all of such trustee's obligations under the Contingent Support
Trust Agreement be immediately performed and simultaneously deliver
a copy of such notice to the Tranche A Lender and the Agent. Each
Producer shall promptly enforce all legal rights it possesses
against the Borrower or such trustee to compel performance by the
Borrower of its obligations under the Trust Agreement, or by such
trustee of its obligations under the Contingent Support Trust
Agreement with respect to amounts which constitute Source of
Contingent Support or Contingent Support, and give notices from
time to time to the Tranche A Lender and the Agent with respect to
the actions being taken. Each of the Producers that is a party
thereto shall, with due diligence and in a reasonable and prudent
manner, enforce its rights (a) against the EPC Contractor (as
defined in the Development Plan) under the Construction Agreement,
(b) under the LNG Sales Contract, the Side Letter and the Disputed
Force Majeure Account Agreement and the Contingent Support
Agreements that relate to payment of amounts constituting the
Source of Debt Service, Source of Contingent Support or Contingent
Support, (c) under the Plant Use Agreement, (d) under the
Processing Agreement and (e) under the Transportation Agreement.

1.7 Operation of Bontang Plant. Those Producers that
are shareholders of P.T. Badak shall use their best efforts, as
shareholders, to cause P.T. Badak or any successor to P.T. Badak
under the Plant Use Agreement to operate the Bontang Plant in the
manner required pursuant to the Plant Use Agreement and to perform
its obligations under the Processing Agreement in the manner
required under the Processing Agreement.

1.8 Replacement of Trustees. (a) The Producers may, with
the prior written consent of the Majority Lenders, and shall, if
any of the circumstances set forth in Section 1.8(b) hereof shall
have occurred and be continuing and if requested by the Majority
Lenders, appoint one of the institutions referred to in clause (ii)
of the definition of Approved Institutions, if any of the
circumstances set forth in Sections 1.8(b)(i), (ii) and (iii)(3)
hereof shall have occurred and, with respect to any other
circumstance referred to in Section 1.8(b) hereof, appoint any
institution other than a branch of the Borrower referred to in such
definition, as successor trustee under the Trust Agreement and each
Contingent Support Trust Agreement, such appointment for purposes
of this Agreement to become effective upon the written confirmation
by such institution, solely in its capacity as successor trustee
under the Trust Agreement and each Contingent Support Trust
Agreement, of its assumption of the obligations of successor
trustee under such Trust Agreement and each Contingent Support
Trust Agreement and of the Borrower under the Loan Agreement, all
of the Notes and the Letter Agreement.

(b) The circumstances referred to in Section 1.8(a)
hereof are as follows:

(i) The Borrower, Continental Bank International
or Continental Illinois National Bank and Trust Company or any
successor trustee appointed pursuant to this Section 1.8
shall:

(1) make an assignment for the benefit of
creditors; or

(2) file a petition in bankruptcy, petition
or apply to any tribunal or applicable regulatory authority
for the appointment of a custodian, receiver, trustee or
official with similar powers for it or a substantial part of
its property or assets, or commence any case or proceeding
under any bankruptcy, reorganization, arrangement,
readjustment of debt, dissolution or liquidation or similar
law or statute of any jurisdiction, whether now or hereafter
in effect; or

(3) if there shall have been filed any such
petition or application, or any such case or proceeding shall
have been commenced against it, indicate its consent to,
approval of or acquiescence in any such petition, application,
case or proceeding or any order for relief or the appointment
of a custodian, receiver, trustee or official with similar
powers or regulatory authority for it or any substantial part
of any of its properties or assets, or suffer to exist any
such case or proceeding in which an order for relief is
entered, or suffer any such custodianship, receivership,
trusteeship or jurisdiction of such similar official or
regulatory authority to continue undischarged for a period of
30 days or more; or

(4) generally be unable to or generally fail
to pay its debts as such debts become due; or

(5) have concealed, removed, or permitted to
be concealed or removed, any part of its property, with intent
to hinder, delay or defraud its creditors or any of them, or
made or suffered a transfer of any of its property which may
be fraudulent under any bankruptcy, fraudulent conveyance or
similar law or shall have suffered or permitted, while
insolvent, any creditor to obtain an Encumbrance upon any of
its property through legal proceedings or distraint which is
not vacated within 30 days from the date such Encumbrance is
created; or

(6) take appropriate corporate action
required to authorize any of the foregoing; or

(ii) The Borrower or any successor trustee
appointed pursuant to this Section 1.8 shall fail to perform
any of its obligations under the Trust Agreement, or any other
trustee shall, during a Contingent Support Period, fail to
perform any of its obligations relating to Source of
Contingent Support or Contingent Support relevant to such
Contingent Support Period under any of the Contingent Support
Trust Agreements; or

(iii) Continental Bank International shall:

(1) cease to be a wholly-owned subsidiary of
Continental Illinois National Bank and Trust Company; or

(2) dispose of all or substantially all of its
assets; or

(3) fail to pay principal of, or premium or
interest on, any of its Indebtedness in a material amount when
due for payment, whether by acceleration or otherwise, but
after giving effect to all applicable grace and waiver periods
provided for in the agreement or instrument creating or
evidencing such Indebtedness; or

(iv) Any suit, legal action or proceeding or
governmental investigation shall be commenced, or any Legal
Requirement shall be in effect, which questions the power,
authority or capacity of the Borrower, Continental Bank
International, any trustee under a Contingent Support Trust
Agreement or any successor trustee under the Trust Agreement
or a Contingent Support Trust Agreement to enter into the
Trust Agreement or any Contingent Support Trust Agreement, or
to serve thereunder in accordance with the terms thereof or
to perform any material obligation thereunder, or in the case
of the Borrower, to enter into the Loan Agreement or to
perform any material obligation thereunder.

1.9 Indebtedness; Permitted Amounts.

(a) The Producers shall not and shall not authorize or
request the Borrower or any other Person to create, assume or
become liable for, directly or indirectly, any Indebtedness
pursuant to any agreement that will charge or be paid out of (x)
the Source of Debt Service or Contingent Support received by the
Trustee, in each case prior to its deposit in the Bontang III
Payment Account, except for (i) all obligations and liabilities
under the Loan Agreement, the Notes and the Letter Agreement, (ii)
any Subordinated Indebtedness incurred pursuant to Section 6.4 of
the Loan Agreement and (iii) obligations in respect of Pari Passu
Swap Indebtedness incurred pursuant to Section 6.4 of the Loan
Agreement, or (y) any Borrowed Amounts, except for the purposes for
which such Borrowed Amounts are borrowed.

(b) The Producers shall neither enter into, nor
authorize or request any Person to enter into, financing agreements
or otherwise create, assume or become liable for directly or
indirectly any Indebtedness pursuant to any agreement, that will,
during any Contingent Support Period, charge or be paid out of any
amount of Contingent Support required to be paid to the Trustee or
reduce any, amount of Source of Contingent Support payable under
any Contingent Support Agreement or Contingent Support Trust
Agreement nor from and after the first day of any Contingent
Support Period and so long as such Contingent Support Period shall
continue will the Producers suffer to exist any such Indebtedness
pursuant to any agreement, except as provided in the relevant
Contingent Support Trust Agreement and, with respect to the 1973
LNG Sales Contract, except as permitted pursuant to LNG Capital
Projects Loan Agreements No. 1, dated as of September 10, 1986, and
No. 2, dated as of June 9, 1987 as such Loan Agreements are in
existence on the date hereof.

(c) With respect to each Contingent Support Trust
Agreement, the Producers shall not authorize, request or permit the
trustee thereunder during any relevant Contingent Support Period to
pay, set aside, charge or deduct out of or from any Source of
Contingent Support or Contingent Support any amounts other than any
Permitted Amounts.

1.10 Negative Pledge. The Producers shall not create or
agree to, or authorize or request the Borrower or any other Person
to create or agree to, any Encumbrance on the Source of Debt
Service prior to its deposit in the Bontang III Payment Account, on
any Borrowed Amounts or, during any Contingent Support Period, on
any Source of Contingent Support relating to such Contingent
Support Period or on any Contingent Support required to be paid to
the Trustee, nor from and after the first day of a Contingent
Support Period and so long as such Contingent Support Period shall
continue shall the Producers suffer any such Encumbrance to exist,
except any Encumbrance, if any, (a) arising pursuant to the Trust
Agreement or (subject to Section 1.9(c)) the Contingent Support
Trust Agreements or in favor of the holders of Indebtedness as
permitted in accordance with Section 1.9 hereof, (b) arising
pursuant to the Transportation Agreement, dated as of September 23,
1973, between Burmast East Shipping Corporation and Pertamina, as
heretofore and hereafter amended, (c) arising pursuant to statute
or otherwise by operation of law in connection with the
Transportation Agreement or any transportation agreement related to
the Source of Contingent Support or Contingent Support (other than
the one referred to in clause (b) above) and discharged in the
ordinary course of business, (d) arising from the assignments made
in the Supply Agreements by Pertamina to the other Producers of the
production sharing percentages of such Producers of amounts payable
by the Buyer under the LNG Sales Contract and certain other amounts
as provided in the Supply Agreements, or (e) arising from the
assignments made in the relevant supply agreements by Pertamina to
the other Producers of the production sharing percentages of such
Producers of amounts payable by the buyers under the Contingent
Support Agreements and certain other amounts as provided in such
supply agreements.

1.11 Insurance.

(a) Prior to operational acceptance of Train E by
Pertamina pursuant to the Construction Agreement, Pertamina shall
maintain or cause to be maintained "All Risk" Builder's Risk
Insurance as required pursuant to the Construction Agreement.

(b) Prior to operational acceptance of Train E by
Pertamina pursuant to the Construction Agreement, Pertamina shall
maintain, or cause to be maintained, with respect to the Bontang
Plant excluding Train E and, upon and after such operational
acceptance, Pertamina shall maintain, or cause to be maintained
with respect to the Bontang Plant, property and casualty insurance
(the "Plant Insurance") on terms at least as favorable to Pertamina
as, and having coverage substantially similar to, the policy
furnished to the Tranche A Lender and the Agent prior to the date
hereof and in an amount which is the greater of (i) the full
replacement value of the Bontang Plant, determined by an
independent appraiser acceptable to the Majority Lenders (if such
insurance in such amount is available on commercially reasonable
terms), or (ii) 125% of the sum of (x) all amounts outstanding from
time to time under the Loan Agreement, the Notes and the Letter
Agreement, plus (y) all other Indebtedness of any Person
outstanding, the holders of which, directly or indirectly, are
entitled to share in the proceeds of the Plant Insurance (the
"Plant Insurance Proceeds") prior to or on an equal and ratable
basis with the Lenders (as the Lenders' rights are determined under
Section 4.1 hereof).

(c) All Plant Insurance shall be maintained with (i)
P.T. Tugu Pratama Indonesia, or (ii) so long as Indonesian law
requires that the relevant insurance be maintained with an
Indonesian insurance company, any Indonesian insurance company
other than P.T. Tugu Pratama Indonesia approved by the Majority
Lenders, which approval shall not be unreasonably withheld, or
(iii) if Indonesian law changes to permit the relevant insurance to
be maintained with one or more non-Indonesian insurance companies,
any insurance company other than P.T. Tugu Pratama Indonesia
approved by the Majority Lenders.

(d) Pertamina agrees that all Plant Insurance shall have
Pertamina as a loss payee, and that no party other than Pertamina,
the other Producers and P.T. Badak shall be a loss payee.
Pertamina agrees that it will not create or agree to any assignment
of or security interest in the Plant Insurance Proceeds, or create
any right to receive the Plant Insurance Proceeds other than
equally and ratably with, or subordinated in right of payment to,
the rights of the Lenders pursuant to this Agreement in favor of
any Person other than the loss payees under the Plant Insurance,
except for the assignment in favor of Jilco pursuant to the 1974
Development Agreement and the rights of Jilco pursuant to the 1981
Development Agreement.

(e) Pertamina shall, on the initial Borrowing Date,
provide to the Tranche A Lender and the Agent a true, correct and
complete copy of the policy or policies of insurance required by
Section 1.11(a) and (b) hereof and, as promptly as practicable in
the circumstances (but in no event later than 30 days) following
the issuance thereof, true, correct and complete copies of each
subsequent policy or policies of insurance required by Section
1.11(a) and (b) hereof. Pertamina shall also provide to the
Tranche A Lender and the Agent as promptly as practicable under the
circumstances, each amendment, modification or waiver and each
notice of cancellation or termination with respect to each policy
of insurance required by Section 1.11(a) and (b) hereof (but in no
event later than 30 days following any such amendment, modification
or waiver or receipt of any such notice).

1.12 Reserve Reports.

(a) The Producers agree that, if requested by either the
Tranche A Lender or the Agent, they will cause to be delivered to
the Tranche A Lender and the Agent the latest reserve report or
reports and any updates, modifications or supplements thereto
covering the areas of gas supply to the Bontang Plant (the "Gas
Supply Area") prepared by DeGolyer and MacNaughton or another
independent petroleum engineering consulting firm of recognized
standing in the petroleum industry qualified by reputation and
experience in the estimating of reserves of oil and gas in
subsurface reservoirs.

(b) Pertamina shall submit or cause to be submitted to
the Tranche A Lender and the Agent a copy of the Certificate and
all supporting documentation furnished to the Buyer pursuant to
Section 3.2(a) of the LNG Sales Contract before committing
additional natural gas from the Gas Supply Area to sale or other
utilization.

1.13 Use of Proceeds. The proceeds of the Borrowings
shall be used solely for the payment of (i) the costs incurred or
to be incurred in connection with the design, engineering,
procurement and construction of or otherwise relating to Train E
and (ii) interest, fees, expenses, taxes and other amounts payable
by the Borrower pursuant to Sections 2.3, 2.7, 2.8, 3.3, 3.4(b) and
10.6 of the Loan Agreement.

1.14 Construction of Train E and Receiving Facilities.

(a) Pertamina shall insure that Train E is constructed
and completed with due diligence and efficiency and in conformity
with sound administrative, engineering and financial practices.

(b) Pertamina shall deliver to each of the Tranche A
Lender and the Agent (i) a quarterly status report in reasonable
detail concerning construction of Train E, such report to include,
but not be limited to, the cost incurred to the end of such quarter
and an estimate of costs required for the completion and acceptance
of Train E pursuant to the Development Plan and Construction
Agreement, and (ii) periodic status reports concerning construction
of the Receiving Facilities and their related facilities based upon
the information furnished to Pertamina by the Buyer.

(c) Pertamina shall not amend the Development Plan in
a manner that would result in a material increase in Pertamina's
expenditures or materially deviate from the Development Plan with
regard to the construction, completion or operation of Train E.

(d) Pertamina shall, if requested by either the Tranche
A Lender or the Agent, permit, and seek to arrange with the Buyer
for, representatives of the Tranche A Lender or the Agent, and
designees appointed by them with the consent of Pertamina, which
shall not be unreasonably withheld, to visit the site of the
construction of Train E and the Receiving Facilities to review and
examine the current status of the construction and implementation
thereof.

(e) Pertamina shall (i) promptly after it becomes aware
of such event, give notice to the Tranche A Lender and the Agent of
any event or occurrence that will, or would be reasonably likely
to, delay the Start-up, and (ii) shall give prompt notice of the
occurrence of the Start-up to the Tranche A Lender, the Agent and
the Borrower.

1.15 Notices Relating to Source of Debt Service and
Contingent Supports.

(a) Pertamina shall inform each of the Tranche A Lender
and the Agent by notice (with a copy to the Borrower) in advance of
the annual and quarterly shipment schedules, and of actual shipment
information promptly after shipment, with respect to each shipment
for sale and delivery of LNG related to the Source of Debt Service
and, during any Contingent Support Period, related to the relevant
Source of Contingent Support.

(b) Pertamina shall give notice to each of the Tranche
A Lender and the Agent promptly after it learns (i) of any event or
occurrence, in the nature of force majeure, and any material
dispute which could reasonably be expected to affect adversely the
amount or time of receipt of the Source of Debt Service or, during
any Contingent Support Period, any relevant Source of Contingent
Support or Contingent Support and (ii) that any default under the
LNG Sales Contract and, during any Contingent Support Period, any
default under any relevant Contingent Support Agreement which
relates to Contingent Support or Source of Contingent Support, has
occurred or will occur with the giving of notice or lapse of time
or both. Pertamina shall thereafter also inform the Tranche A
Lender and the Agent of the status of such event at reasonable
intervals during the continuance thereof.

1.16 Effect of Certain Reductions of Source of Debt
Service.

(a) If (i) any of the price level, payment terms or
price adjustment mechanism under the LNG Sales Contract is to be
changed to conform to a similar change under the 1973 LNG Sales
Contract or the 1981 LNG Sales Contract in accordance with Section
5(a) of the Side Letter, (ii) an amendment to the LNG Sales
Contract is made pursuant to Section 1 of the Side Letter or (iii)
force majeure is declared by the Buyer pursuant to Section 3 of the
Side Letter, and the result thereof would reduce the Source of Debt
Service payable at any time prior to the Final Maturity Date, the
Producers shall, in a manner acceptable to the Majority Lenders,
increase the Source of Debt Service by changing the percentage of
the Gross Invoice Amount of the sales proceeds and other amounts
payable under the LNG Sales Contract, redefining the Source of Debt
Service or making such other appropriate amendments or adjustments
to the terms agreed pursuant hereto so as to maintain the Source of
Debt Service reasonably anticipated to be payable to the Final
Maturity Date at its level immediately prior to such change,
amendment or declaration of force majeure.

(b) Any increase, redefinition, amendment or adjustment
referred to in Section 1.16(a) hereof shall be promptly agreed in
writing among the Producers, the Borrower, the Tranche A Lender and
the Agent on behalf of the Tranche B Lenders, which shall amend the
definition of Source of Debt Service for all purposes of the Loan
Agreement, the Notes, the Trust Agreement and this Agreement. The
Producers shall, and shall cause the Borrower to, execute the
appropriate documents promptly following the relevant event, and
such documents shall take effect as of the date of such event.

1.17 Payment Instructions.

(a) Subject to Section 1.8 hereof, Pertamina hereby
agrees to instruct the Buyer to pay all amounts payable to
Pertamina pursuant to the LNG Sales Contract to the Borrower and to
arrange, or instruct the Buyer to arrange, to have paid to the
Borrower all amounts payable to Pertamina from the Disputed Force
Majeure Account maintained under such Agreement and Pertamina
hereby agrees not to change such instructions or the designation of
the Borrower as the recipient of amounts which constitute the
Source of Debt Service payable thereunder;

(b) With respect to all other relevant Basic Agreements,
Pertamina has designated or shall designate, and agrees not to
change the designation of, the Borrower as the recipient of amounts
which constitute the Source of Debt Service payable thereunder;

(c) Pertamina has designated or shall designate, and
agrees not to change the designation of, the Bontang Excess Sales
Trustee as the recipient of (1) amounts which are payable pursuant
to the Chubu Sales Contract, and (2) any Related Amounts with
respect to the Chubu Sales Contract;

(d) Pertamina has designated or shall designate, and
agrees not to change the designation of, the Bontang I Trustee as
the recipient of (1) amounts which are payable pursuant to the 1973
LNG Sales Contract and constitute Source of Contingent Support and
(2) any Related Amounts with respect to the 1973 LNG Sales Contract
(insofar as they relate to Source of Contingent Support);

(e) Pertamina has designated, and agrees not to change
the designation of, the Bontang Excess Sales Trustee as the
recipient of amounts payable pursuant to Section 8.2(b) of the
Bontang I Trust Agreement;

(f) Pertamina has designated or shall designate, and
agrees not to change the designation of, the Borrower as the
recipient during any relevant Contingent Support Period of amounts
payable under the Bontang Excess Sales Trust Agreement and each
Special Long Term Sales Trust Agreement, which in each case
constitute relevant Contingent Support;

(g) Pertamina shall (i) instruct all buyers under any
Future or Special Spot Sales or Future Long Term Sales Contracts to
pay all amounts payable thereunder to the Bontang Excess Sales
Trustee and all other relevant Persons to pay or cause to be paid
all Related Amounts with respect to Future or Special Spot Sales or
Future Long Term Sales Contracts to the Bontang Excess Sales
Trustee, (ii) not change such instructions or the designation of
the Bontang Excess Sales Trustee as the recipient of such amounts,
(iii) prior to the time the first payments are due from the buyer
or buyers under each Future Long Term Sales Contract, notify the
Bontang Excess Sales Trustee that such Contract is designated as a
"Future Long Term Sales Contract", (iv) prior to the time the first
payments are due from the buyer with respect to any Future or
Special Spot Sale, notify the Bontang Excess Sales Trustee that
such Sale is designated as a "Future Spot Sale" or a "Special Spot
Sale," as the case may be, and (v) during any Contingent Support
Period deliver to the Bontang Excess Sales Trustee, the Tranche A
Lender and the Agent copies of the documents evidencing each such
Sale and copies of each such Contract relating thereto promptly
following execution thereof (and, in the case of such Sales or
Contracts entered into by telex, promptly following dispatch or
receipt, copies of the relevant telexes);

(h) Pertamina shall (i) enter into a Special Long Term
Sales Trust Agreement with respect to each Special Long Term Sales
Contract prior to the time the first payments are due from the
buyer or buyers under each such Special Long Term Sales Contract,
(ii) instruct all buyers under each Special Long Term Sales
Contract to pay all amounts payable thereunder to the Special Long
Term Sales Trustee under the related Special Long Term Sales Trust
Agreement and all other relevant Persons to pay or choose to be
paid all Related Amounts with respect thereto to such Special Long
Term Sales Trustee, (iii) not change such instructions or the
designation of such Special Long Term Sales Trustee as the
recipient of such amounts and (iv) during any Contingent Support
Period deliver to the relevant Special Long Term Sales Trustee, the
Tranche A Lender and the Agent copies of each relevant Special Long
Term Sales Contract relating thereto promptly upon execution
thereof.

1.18 Payment of Contingent Supports.

(a) If Start-up does not occur prior to January 1, 1990,
Pertamina shall cause the First Contingent Support to be paid to
the Borrower, to the extent required to be paid into the Debt
Service Account and the Reserve Account pursuant to the Trust
Agreement, during the First Contingent Support Period commencing on
January 1, 1990 and ending on the earlier to occur of (i) Start-up
and (ii) September 30, 1990 by giving notice forthwith to the
Borrower and to the Bontang Excess Sales Trustee that First
Contingent Support is payable.

(b) If Completion of the Receiving Facilities does not
occur on or before September 30, 1990, Pertamina shall cause the
First and Second Contingent Supports to be paid to the Borrower, to
the extent required to be paid into the Debt Service Account and
the Reserve Account pursuant to the Trust Agreement, during the
First and Second Contingent Support Periods commencing on October
1, 1990 and ending on the date of Completion of the Receiving
Facilities by giving notice forthwith to the Borrower and to the
Bontang Excess Sales Trustee that First and Second Contingent
Support is payable. In addition, if Start-up does not occur on or
before September 30, 1991, Pertamina shall cause the Third
Contingent Support to be paid to the Borrower, to the extent
required to be paid into the Debt Service Account and the Reserve
Account pursuant to the Trust Agreement, during the Third
Contingent Support Period commencing on October 1, 1991 and ending
on the date of Start-up by giving notice forthwith to the Borrower
and to each Special Long Term Sales Trustee (with a copy to the
Bontang Excess Sales Trustee) that Third Contingent Support is
payable and that a Third Contingent Support Period has commenced.

(c) If Pertamina exercises its right to suspend
deliveries under Section 10.5 of the LNG Sales Contract, Pertamina
shall cause the First Contingent Support to be paid to the
Borrower, to the extent required to be paid into the Debt Service
Account and the Reserve Account pursuant to the Trust Agreement,
during the First Contingent Support Period coextensive with the
period of such suspension by giving notice, on the same day it
notifies the Buyer of the exercise of such right of suspension, to
the Borrower and to the Bontang Excess Sales Trustee that First
Contingent Support is payable.

(d) If the LNG Sales Contract is terminated or
repudiated (whether by notice or in fact) by the Buyer, Pertamina
shall cause the First, Second and Third Contingent Supports to be
paid to the Borrower, to the extent required to be paid into the
Debt Service Account and the Reserve Account pursuant to the Trust
Agreement, during the First, Second and Third Contingent Support
Periods coextensive with the period after such termination or
repudiation by giving notice forthwith to the Borrower, the Bontang
Excess Sales Trustee and each Special Long Term Sales Trustee that
First, Second and Third Contingent Support are payable and that a
Third Contingent Support Period has commenced. In addition, if any
Event of Force Majeure under Section 15.1 of the LNG Sales Contract
excuses performance thereunder by the Buyer for 42 consecutive
months, Pertamina shall cause the First, Second and Third
Contingent Supports to be paid to the Borrower, to the extent
required to be paid into the Debt Service Account and the Reserve
Account pursuant to the Trust Agreement, during the First, Second
and Third Contingent Support Periods coextensive with the period
commencing at the end of such 42-month period and continuing for so
long as such performance by the Buyer continues to be excused as a
result of such an Event of Force Majeure by giving notice forthwith
following the end of such 42-month period to the Borrower, the
Bontang Excess Sales Trustee and each Special Long Term Sales
Trustee that First, Second and Third Contingent Support are payable
and that a Third Contingent Support Period has commenced.

(e) Pertamina shall give prompt notice to the Borrower
and the Bontang Excess Sales Trustee and, if relevant, to each
Special Long Term Sales Trustee of the end of each Contingent
Support Period.

(f) If an event giving rise to a right to payment of
Contingent Support pursuant to Sections 1.18(a) to (d) hereof has
occurred, the Tranche A Lender and the Agent will have the right,
without prejudice to the rights of the Lenders with respect to any
Default, to give notice to Pertamina indicating the event that has
occurred, the reasons therefor, and specifying the relevant
Contingent Support payable. Upon receipt of such notice, Pertamina
shall immediately give notice to the Bontang Excess Sales Trustee
and, if relevant, each Special Long Term Sales Trustee instructing
the relevant trustee or trustees to hold and accumulate amounts
constituting the relevant Contingent Support, and Pertamina shall
simultaneously give copies of such notice to the Borrower and to
the Tranche A Lender and the Agent. The Bontang Excess Sales Trust
Agreement and each Special Long Term Sales Trust Agreement shall
provide that following receipt of such notice the relevant amounts
of the Contingent Support shall be accumulated and held by such
trustee or trustees, and not disbursed to the Producers, until such
trustee or trustees shall have received a notice from Pertamina
(with a copy given simultaneously to the Borrower and to the
Tranche A Lender and the Agent) (i) to the effect that an event
giving rise to payment of the relevant amount of Contingent Support
has not occurred, and specifying its reasons therefor, in which
case the Bontang Excess Sales Trustee and, if relevant, each
Special Long Term Sales Trustee shall resume making disbursements
to the Producers as if no such notice from Pertamina to accumulate
and hold amounts had been given, or (ii) advising that an event
giving rise to payment of the relevant amount of Contingent Support
has occurred and instructing the Bontang Excess Sales Trustee and,
if relevant, each Special Long Term Sales Trustee to make payment
as provided in the relevant Contingent Support Trust Agreements of
amounts of the relevant Contingent Support to the Borrower.

1.19 Spot Sales and Long Term Sales Contracts.

(a) All proceeds of LNG sold from the Bontang Plant
pursuant to Spot Sales Contracts and Long Term Sales Contracts
shall, subject to the following provisos, be available for
Contingent Support in accordance with the terms hereof; provided,
that the maximum quantity of LNG the proceeds of sale of which
shall be available for Contingent Support from all sources for any
time period shall never exceed, as relevant, (1) in the case of
events described in Sections 1.18(a), (b) and (c) hereof, 0.73
million tons per annum prorated for each period of a year or
portion thereof for the relevant time period during which
Contingent Support is payable; (2) if the LNG Sales Contract is
terminated or repudiated as described in Section 1.18(d) hereof,
2.27 million tons per annum prorated for each period of a year or
portion thereof for the relevant time period during which
Contingent Support is payable; or (3) if performance by the Buyer
under the LNG Sales Contract is affected by an Event of Force
Majeure as described in Section 1.18(d) hereof, the difference
between (x) 2.27 million tons per annum prorated for each period of
a year or portion thereof for the relevant time period during which
Contingent Support is payable and (y) the amounts actually taken
or, if not taken, required to be paid for under the LNG Sales
Contract for such period; provided, further, that following
completion of the construction of additional LNG production
capacity at the Bontang Plant, the only proceeds of sale of LNG
pursuant to a new LNG sales contract entered into in connection
with such additional production capacity which shall constitute
Contingent Support shall be the proceeds of the sale of an amount
of LNG in excess of the design capacity of such additional
production capacity.

(b) During each Second Contingent Support Period,
Pertamina shall exercise all reasonable efforts to make Spot Sales.
In addition, during each Third Contingent Support Period, Pertamina
shall exercise all reasonable efforts to enter into Long Term Sales
Contracts.

1.20 Debt Service Accounts; Contingent Support Accounts.

(a) Each of the Producers agrees with respect to the
Trust Agreement that, as long as moneys are held by the Trustee in
the Debt Service Account and Reserve Account, the Lenders are, to
the extent necessary to make payments in accordance with the terms
of the Trust Agreement of principal, interest and other amounts due
under the Loan Agreement, the Notes, and the Letter Agreement,
among those having a right, as provided under Section 2.2 of the
Trust Agreement, to receive disbursements thereunder.

(b) Each of the Producers agrees that during each
Contingent Support Period (i) the Borrower, with respect to amounts
in and payable to any Contingent Support Account, has a right to
receive disbursements of Contingent Support to the extent provided
in the Bontang Excess Sales Trust Agreement and to the extent to be
provided in the Special Long Term Sales Trust Agreements, (ii) the
Bontang Excess Sales Trustee, with respect to amounts in and
payable to the KCO General Account under the Bontang I Trust
Agreement, has a right to receive disbursements of amounts of
Source of Contingent Support as provided in such agreement, and
(iii) the Bontang I Trustee is obligated to make payments of Source
of Contingent Support under the Bontang I Trust Agreement to the
extent provided in such agreement to the Bontang Excess Sales
Trustee and the Bontang Excess Sales Trustee is obligated to make
payments of Contingent Support under the Bontang Excess Sales Trust
Agreement to the extent provided in such agreement to the Borrower,
in each case to provide for the payment of principal, interest and
other amounts due under the Loan Agreement, the Note and the Letter
Agreement payable to the Lenders.

(c) The Producers shall not authorize or request the
trustee under any Contingent Support Trust Agreement to open at
banks outside the United States of America any sub-account of any
Contingent Support Account or of the KCO General Account except for
the sole purpose of facilitating payment of any relevant Permitted
Marketing Fees.

(d) With respect to amounts held from time to time in
any Contingent Support Account or in the KCO General Account, the
Producers shall not approve any investments of the type referred to
in Section 9.1(ii)(x) of the Bontang Excess Sales Trust Agreement
or Section l0.l(ii)(x) of the Bontang I Trust Agreement or any
comparable Section of any Special Long Term Sales Trust Agreement
without the prior written consent of the Majority Lenders.

1.21 Expenses. To the extent that any amounts required
to be paid by the Borrower pursuant to Section 10.6(a) and, prior
to the Completion Date, Section 10.6(b), of the Loan Agreement are
not paid when due, the Producers shall, following notice from the
Tranche A Lender or the Agent or both, as appropriate, immediately
pay such amounts or otherwise cause such amounts to be paid.

PART 2
REPRESENTATIONS AND WARRANTIES

Each Producer makes the following representations and
warranties to the Lenders solely with respect to itself; provided,
however, that (i) each representation and warranty with respect to
any agreement that is dated on, as of or prior to the date hereof
is made as of the date hereof, (ii) each representation and
warranty with respect to any other agreement will be made as of the
date such agreement is entered into, (iii) each representation and
warranty with respect to any agreement is made only by those
Producers that are parties thereto and (iv) Pertamina is the only
Producer making the representation and warranty in Section 2.9
hereof:

2.1 Due Incorporation; Power and Authority. Such
Producer is a corporation duly organized and validly existing under
the laws of the jurisdiction of its incorporation. Such Producer
has full power, authority and legal right to execute, deliver,
perform and observe the terms and provisions of this Agreement, the
Trust Agreement, each Basic Agreement, each Contingent Support
Agreement, the Korean Sales Contract and each Contingent Support
Trust Agreement.

2.2 Legal Action. All necessary legal action has been
taken to authorize such Producer to execute and deliver and to
perform and observe the terms and provisions of this Agreement, the
Trust Agreement and each Basic Agreement, each Contingent Support
Agreement, the Korean Sales Contract and each Contingent Support
Trust Agreement.

2.3 Restrictions. There is no Legal Requirement and no
contractual or other obligation binding on such Producer,
including, without limitation, any of the Basic Agreements, the
Contingent Support Agreements or the Korean Sales Contract, that is
or will be contravened (or, in the case of a contractual
obligation, in respect of which a breach has occurred or will
occur) by reason of the execution and delivery of or the
performance or observance by such Producer of any of the terms or
provisions of this Agreement, the Trust Agreement or the Contingent
Support Trust Agreements.

2.4 Registrations and Approvals. No registrations,
declarations or filings with, or consents, licenses, approvals or
authorizations of, any legislative body, governmental department or
government authority are necessary or required under any applicable
law for the due execution and delivery by such Producer, or for the
performance by such Producer, of this Agreement, the Trust
Agreement or the Contingent Support Trust Agreements, or to assure
the validity or enforcement hereof or thereof with respect to such
Producer, except such as have been obtained, copies of which have
been provided to the Tranche A Lender and the Agent in connection
with the execution and delivery of this Agreement and which remain
in full force and effect.

2.5 Agreement Binding; No Defaults. This Agreement, the
Trust Agreement and the Contingent Support Trust Agreements
constitute the legal, valid and binding obligations of such
Producer enforceable against it in accordance with each of their
respective terms, subject in the case of enforcement to any
applicable bankruptcy, insolvency, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and to
equitable principles of general application. No Default by such
Producer has occurred and is continuing and no event has occurred
or failed to occur in each case pertaining to such Producer, the
occurrence or non-occurrence of which with the giving of notice or
lapse of time or both would constitute a Default. Such Producer is
not in violation of any of its obligations under (i) the Trust
Agreement or, insofar as such agreements relate to Contingent
Support or Source of Contingent Support, the Contingent Support
Trust Agreements, (ii) the Supply Agreements and the LNG Sales
Contract, except for violations which are not material and are not
likely to give rise to the assertion of a claim for breach, and
(iii) the Basic Agreements (other than those referred to in the
immediately preceding clause (ii)) in any material respect and the
Contingent Support Agreements and the Korean Sales Contract,
insofar as such agreements relate to Contingent Support or Source
of Contingent Support, in any material respect.

2.6 Litigation. There is no suit, action, proceeding
or investigation pending against such Producer or, to the best of
such Producer's knowledge, threatened against such Producer, which
(a) questions the validity of this Agreement or the Trust Agreement
or any Basic Agreement, or, insofar as such agreements relate to
Contingent Support or Source of Contingent Support, any Contingent
Support Agreement, the Korean Sales Contract or Contingent Support
Trust Agreement, or any material action taken or to be taken by
such Producer pursuant hereto or pursuant to any thereof, or (b)
affects materially and adversely or is likely materially and
adversely to affect (i) the amounts of the Source of Debt Service
payable to the Trustee under the LNG Sales Contract, or the amounts
of the Source of Contingent Support that may become payable to or
by the trustees under the relevant Contingent Support Trust
Agreements or any Contingent Support payable to the Borrower under
the Trust Agreement, or the right of the Borrower to receive any
such amounts under the Loan Agreement, (ii) the Bontang Plant or
Pertamina's interests therein or (iii) such Producer's ability to
perform its obligations under this Agreement or the Trust Agreement
or any Basic Agreement, or, insofar as such agreements relate to
Contingent Support or Source of Contingent Support, any Contingent
Support Agreement, the Korean Sales Contract or Contingent Support
Trust Agreement.

2.7 Compliance with Other Instruments, etc. Such
Producer is not in violation of any term of its charter or by-laws,
or any term of any agreement or any instrument to which it is a
party or by which it or any of its properties is bound or any Legal
Requirement, which violation would have a material adverse effect
on such Producer's ability to perform its obligations under this
Agreement, the Trust Agreement or any Basic Agreement, or, insofar
as such agreements relate to Contingent Support or Source of
Contingent Support, any Contingent Support Agreement, the Korean
Sales Contract or Contingent Support Trust Agreement.

2.8 Other Agreements. Each of the Tranche A Lender and
the Agent has been provided with true and complete copies of the
Basic Agreements, Contingent Support Agreements, the Korean Sales
Contract and Contingent Support Trust Agreements as amended and in
effect on the date hereof. Each Producer represents and warrants
that, to the best of its knowledge, no party to any of such Basic
Agreements, or, insofar as such agreements relate to Contingent
Support or Source of Contingent Support, any Contingent Support
Agreements, the Korean Sales Contract or Contingent Support Trust
Agreements, other than any other Producer, is in breach of any
material obligation thereunder.

2.9 Insurance. Insurance policies of the type required
by Section 1.11 hereof are in full force and effect, no default or
breach exists thereunder which would give rise to a right to cancel
the same, and no notice of default or breach or notice of
termination has been given to Pertamina with respect thereto. On
or prior to the date of this Agreement, true, complete and correct
copies of such insurance policies have been delivered to the
Tranche A Lender and the Agent.

2.10 No Encumbrance. There is no Encumbrance on the
Source of Debt Service prior to its deposit in the Bontang III
Payment Account caused by such Producer, for which such Producer is
responsible or which relates to such Producer, except Encumbrances,
if any, (i) arising pursuant to statute or otherwise by operation
of law, and not pursuant to any agreement, which are not being
enforced by attachment or levy and which will be discharged in the
ordinary course of business or (ii) permitted by Section 1.10
hereof.

2.11 No Material Adverse Change. There has been no
material adverse change since December 31, 1987 in (i) the
business, assets, financial position or results of operation of
such Producer which affects materially and adversely, or would be
likely to affect materially and adversely, the performance by
Pertamina of or the ability of Pertamina to perform its obligations
under the LNG Sales Contract or (ii) the operation of the Bontang
Plant.

PART 3
DEFAULTS

3.1 Default Defined. Each of the Producers agrees with
the Lenders that if any one or more of the following events shall
occur it shall be, so long as the same shall continue, a default
hereunder (a "Default"):

(a) a failure to comply with any of the provisions of
Section 1.1, 1.3, 1.4, 1.9, 1.10, 1.11, 1.17, 1.18(a) through (d)
and (f) or 6.3 hereof; or

(b) a failure to comply with any of the provisions of
Section 1.5, 1.6, 1.7, 1.14(e), 1.15(b), 1.21 or 3.5 hereof for
seven days after written notice of such failure shall have been
given to the Producers by the Tranche A Lender and the Agent; or

(c) a failure to comply with Section 3.3(b) hereof or
any of the provisions of Part 1 hereof other than those referred to
in Sections 3.1(a) and (b) hereof for 30 days after written notice
of such failure shall have been given to the Producers by the
Tranche A Lender and the Agent; or

(e) (i) a failure by any of the Producers to pay
principal of, or premium or interest on, any of its Indebtedness in
an amount which is material in the context of this Agreement when
due for payment, whether by acceleration or otherwise, but after
giving effect to all applicable grace and waiver periods provided
for in the agreement or instrument creating or evidencing such
Indebtedness; or

(ii) any of the Producers shall:

(1) make an assignment for the benefit
of creditors; or

(2) file a petition in bankruptcy,
petition or apply to any tribunal or applicable
regulatory or governmental authority for the appointment
of a custodian, receiver, trustee or official with
similar powers for it or a substantial part of its
property or assets, or commence any case or proceeding
under any bankruptcy, reorganization, arrangement,
readjustment of debt, dissolution or liquidation or
similar law or statute of any jurisdiction, whether now
or hereafter in effect; or

(3) if any such petition or application shall
have been filed, or any such case or proceeding shall
have been commenced against it, indicate its consent to,
approval of or acquiescence in any such petition,
application, case or proceeding or the appointment of a
custodian, receiver, trustee or official with similar
powers or regulatory or other governmental authority for
it or any substantial part of its properties or assets,
or suffer to exist any such case or proceeding in which
an order for relief is entered, or suffer any such
custodianship, receivership, trusteeship or jurisdiction
of such official or regulatory or governmental authority
to continue undischarged for a period of 60 days or more;
or

(4) generally be unable to or generally fail
to pay its debts as such debts become due; or

(iii) a failure by P.T. Badak to comply with a
material term or provision of the Plant Use Agreement or the
Processing Agreement;

provided, however, that the effect of the occurrence of any of the
events or circumstances referred to in this clause (e) is to
affect, materially and adversely, the performance by Pertamina of
its obligations under the LNG Sales Contract or, insofar as such
obligations relate to Contingent Support or Source of Contingent
Support, the Chubu Sales Contract, the 1973 LNG Sales Contract or
the Korean Quantities Agreement or the ability of Pertamina to
perform such obligations; or

(f) Any statement furnished to the Tranche A Lender or
the Agent under any of Sections 5.2(iii) or 6.1 of the Loan
Agreement with respect to the Debt Coverage Ratio, the Gross
Invoice Amount, the Source of Debt Service, the Contingent Support
or the Source of Contingent Support as of its date, (i) was not
prepared based on information concerning amounts outstanding under
the Loan Agreement or the Notes which was complete and accurate in
all material respects or information concerning amounts of the
Gross Invoice Amount, the Source of Debt Service or Source of
Contingent Support actually invoiced or received which was complete
and accurate in all material respects, or (ii) was not prepared
based on assumptions concerning future periods which were approved
by the Tranche A Lender and the Agent on behalf of the Majority
Tranche B Lenders, or (iii) was delivered by the Producers in bad
faith or by the Borrower pursuant to a request or authorization of
the Producers given in bad faith.

3.2 Remedy for Default. If at any time during one or
more Interest Periods the effect of any one or more Defaults is to
cause the Source of Debt Service or any Contingent Support, in each
case received by the Borrower and payable to the Lenders, to be
insufficient to satisfy any payment obligation when due under the
Loan Agreement, any of the Notes or the Letter Agreement (the
difference between the amount of the Source of Debt Service or
Contingent Support received with respect to any Interest Period by
the Borrower and payable to the Lenders under the Loan Agreement,
any of the Notes or the Letter Agreement and the amount which would
have been so received and payable but for such Default or Defaults,
the "Default Shortfall"), then each of the Producers which caused
or is responsible for such Default or to which such Default relates
shall be obligated to pay an aggregate amount to the Tranche A
Lender and the Agent for the account of the Tranche B Lenders, on
the dates when due during or at the end of such Interest Period, in
the manner and with the effect of payments made by the Borrower as
provided in the Loan Agreement, the relevant Notes or the Letter
Agreement, on account of its Liability Share of the Default
Shortfall, such that the net aggregate amount received by the
Tranche A Lender and the Agent for the account of the Tranche B
Lenders, pursuant to this Section 3.2, after deduction of all Taxes
required to be deducted or withheld from, or otherwise paid by the
Lenders with respect to, such payment (but excluding Excluded Taxes
required to be so deducted, withheld or paid solely to the extent
that the amount of such Excluded Taxes does not exceed the amount
of Excluded Taxes that would have been deducted, withheld or
otherwise paid by the Lenders, if there had been no Default
Shortfall, and the net amount were paid to, and received by, the
Lenders out of the Source of Debt Service or applicable Contingent
Support), shall equal such Producer's Liability Share of the
Default Shortfall.

3.3 Diversion and Remedy.

(a) In addition to the Defaults provided for in Section
3.1 hereof, if the effect during one or more Interest Periods of
(i) any claim asserted by, on behalf of, or against any one or more
of the Producers or any of its or their property or any interest in
any of its or their property, or against the Source of Debt
Service, Source of Contingent Support or Contingent Support,
including, without limitation, claims asserted by any governmental
or taxing authority, or by, or on behalf, of any creditor, trustee
in bankruptcy, custodian, receiver or similar official or
authority, or (ii) the imposition of any Taxes on amounts payable
under the Supply Agreements, the LNG Sales Contract, the
Transportation Agreement or any Contingent Support Agreement, in
any such case constituting Source of Debt Service, Source of
Contingent Support or Contingent Support, or on any other payment
or receipt of the Source of Debt Service, Source of Contingent
Support or Contingent Support, excluding any Taxes imposed on any
amount constituting Source of Contingent Support or Contingent
Support by Japan or any political subdivision or taxing authority
thereof or therein (such a claim referred to in clause (i) or
imposition of such Tax referred to in clause (ii), a "Diversion")
is to cause the Source of Debt Service or Contingent Support
received by the Borrower and payable during or at the end of any
Interest Period to the Lenders to be insufficient to satisfy any
payment obligation when due under the Loan Agreement, any of the
Notes or the Letter Agreement (the difference between the amount of
the Source of Debt Service or Contingent Support received by the
Borrower and payable to the Lenders under the Loan Agreement, the
relevant Notes or the Letter Agreement and the amount which would
have been so received and payable but for such Diversion, the
"Diversion Shortfall"), each of the Producers which has caused or
is responsible for such Diversion or to which such Diversion
relates, shall be obligated to pay an aggregate amount to the
Tranche A Lender and the Agent for the account of the Tranche B
Lenders, on the dates, in the manner and with the effect of
payments made by the Borrower as provided in the Loan Agreement,
the relevant Notes or the Letter Agreement, on account of its
Liability Share of the Diversion Shortfall, such that the net
aggregate amount received by the Lenders pursuant to this Section
3.3, after deduction of all Taxes required to be deducted or
withheld from, or otherwise paid by the Lenders with respect to,
such payment (but excluding Excluded Taxes required to be so
deducted, withheld or paid solely to the extent that the amount of
such Excluded Taxes does not exceed the amount of Excluded Taxes
that would have been deducted, withheld or otherwise paid by the
Lenders if there had been no Diversion Shortfall, and the net
amount were paid to, and received by, the Lenders), shall equal
such Producer's Liability Share of the Diversion Shortfall.

(b) If, at any time prior to payment in full of the
principal of and interest on any Notes, and of all other amounts
due and owing under the Loan Agreement, the Letter Agreement and
this Agreement at the time of payment in full of the principal and
interest on such Notes, any claim for Taxes shall be asserted by
Japan or any political subdivision or taxing authority thereof or
therein or any Taxes shall be withheld, deducted, assessed or
otherwise imposed by Japan or any political subdivision or taxing
authority thereof or therein, in each case with respect to any
amounts payable and constituting Source of Contingent Support or
Contingent Support (hereinafter, a "Japanese Tax Claim"), and such
Taxes are during a Contingent Support Period paid out of the
proceeds of such Source of Contingent Support or Contingent Support
required to be paid to the Borrower, and if Pertamina shall
determine either to contest such Japanese Tax Claim by any
administrative or judicial procedures or to assert any claim to
indemnity with respect to such Japanese Tax Claim that may be
available to Pertamina from one or more buyers under the relevant
Contingent Support Agreement, then if Pertamina shall receive a
refund of any such Taxes pursuant to a contest or otherwise,
Pertamina shall, unless waived by the Majority Lenders, from time
to time promptly make payments to the Tranche A Lender and the
Agent for the account of the Tranche B Lenders, in an amount that
equals the portion of the relevant Contingent Support that
Pertamina is obligated to cause to be paid to the Borrower during
the relevant Contingent Support Period to the extent necessary so
that each relevant Lender shall have received all amounts then due
and payable to such Lender pursuant to the relevant Notes, the Loan
Agreement, the Letter Agreement or this Agreement; provided,
however that in no event shall the aggregate amount of such
payments exceed the share referred to below of the total amounts
received pursuant to such contest.

The share referred to above of such total amount received in
respect of a refund shall be the total amount of such payments
minus all reasonable amounts of unreimbursed costs incurred by
Pertamina in pursuing such contest, including court costs and fees
and disbursements of counsel.

3.4 Liability Share Defined. The "Liability Share" of
a Producer which caused or is responsible for a Default or a
Diversion or to which such Default or Diversion relates which has
given rise to a Default Shortfall or a Diversion Shortfall, as the
case may be, shall be with respect to such Default Shortfall or
Diversion Shortfall a percentage determined by dividing the
percentage interest of such Producer (as set forth in Schedule 1
hereto and as adjusted for changes in Producers' Percentages as
defined in and pursuant to Sections 2.2, 2.4 and 2.5 of the Supply
Agreements) by the aggregate percentage interest of all Producers
(as set forth in such Schedule 1 as so adjusted) which have caused
or which are responsible for such Default or Diversion or to which
such Default or Diversion relates. With respect to the imposition
of Taxes referred to in Section 3.3(a) hereof, each Producer shall
be deemed to have caused the corresponding Diversion to the extent
of its percentage interest as shown in Schedule 1 hereto, adjusted
as aforesaid.

3.5 Notices. Each Producer shall promptly, and in any
event not later than three Business Days after obtaining actual
knowledge thereof, give notice to the Tranche A Lender and the
Agent of the occurrence of (a) any Default or Diversion caused by
such Producer or for which it is responsible or to which it is
related or any event that, with the giving of notice or the passing
of time, or both, would constitute such a Default or Diversion and
(b) any Japanese Tax Claim.

PART 4
INSURED LOSS

4.1 Effect of Total Loss of Train E Prior to Operational
Acceptance. If any event occurs for which insurance is payable by
an insurance company under any insurance policy referred to in
Section 1.11(a) hereof relating to an actual total loss or a
constructive, compromised or arranged total loss (within the
meaning of such policy) of Train E, Pertamina agrees as follows:

(a) Pertamina shall, as promptly as possible in the
circumstances following such event, notify the Tranche A Lender and
the Agent of the occurrence of such event and shall, within six
months following such event, notify the Tranche A Lender and the
Agent in writing whether or not it intends to rebuild or
reconstruct Train E.

(b) If Pertamina notifies the Tranche A Lender and the
Agent that it does not intend to rebuild or reconstruct Train E, it
shall promptly pay to the Tranche A Lender and the Agent such
amounts as are instructed by the Tranche A Lender and the Agent
equal in the aggregate to the lesser of the aggregate amounts
outstanding under the Loan Agreement, Notes and Letter Agreement
and the aggregate amount of such proceeds paid to Pertamina in
respect of such event.

(c) If Pertamina notifies the Tranche A Lender and the
Agent that it intends to rebuild or reconstruct Train E, then it
shall proceed to do so diligently and in good faith and shall
provide the Tranche A Lender and the Agent with periodic written
reports not less frequently than quarterly in reasonable detail
concerning the rebuilding or reconstruction and including (i) the
amount of insurance proceeds received under such policy, (ii) the
amount of funds expended to date on the rebuilding or
reconstruction, (iii) the proposed schedule for completion of the
construction work, and (iv) the progress of the construction work
to date.

(d) If, at any time prior to completion, Pertamina shall
terminate the rebuilding or reconstruction or shall not be
proceeding with such rebuilding or reconstruction diligently and in
good faith, then Pertamina shall be obligated promptly to pay to
each of the Tranche A Lender and the Agent such amounts as are
instructed by the Tranche A Lender and the Agent equal in the
aggregate to the lesser of the amounts outstanding under the Loan
Agreement, the Note and the Letter Agreement and the aggregate
insurance proceeds which are paid to Pertamina under such policy in
respect of such event and not in good faith expended or committed
to be expended (pursuant to a commitment which cannot by its terms
be avoided) on such rebuilding or reconstruction.

4.2 Effect of Total Loss of Bontang Plant. If any event
occurs for which insurance is payable by an insurance company under
any insurance policy referred to in Section 1.11(b) hereof relating
to an actual total loss or a constructive, compromised or arranged
total loss (within the meaning of such policy) of the Bontang Plant
(which term, for purposes of this Section 4.2, shall exclude Train
E if such loss occurs prior to operational acceptance of Train E by
Pertamina pursuant to the Construction Agreement), Pertamina agrees
as follows:

(b) If Pertamina so notifies the Tranche A Lender and
the Agent that it does not intend to rebuild or reconstruct the
Bontang Plant, it shall promptly pay to each of the Tranche A
Lender and the Agent such amounts as are instructed by the Tranche
A Lender and the Agent in an aggregate amount equal to the lesser
of the share referred to below of the total insurance proceeds that
are paid to Pertamina under such policy in respect of such event
and the aggregate amount outstanding under the Loan Agreement,
Notes and Letter Agreement after giving effect to any payment made
pursuant to Section 4.1(b) hereof.

(c) If Pertamina notifies the Tranche A Lender and the
Agent that it intends to rebuild or reconstruct the LNG Plant, then
it shall proceed to do so diligently and in good faith, applying
amounts equal to the proceeds of the insurance to the extent
required, and shall provide the Tranche A Lender and the Agent with
periodic written reports not less frequently than quarterly in
reasonable detail concerning the rebuilding or reconstruction and
including (i) the amount of insurance proceeds received under such
policy, (ii) the amount of funds expended to date on the rebuilding
or reconstruction, (iii) the proposed schedule for completion of
the construction work, and (iv) the progress of the construction
work to date.

(d) If, at any time prior to completion, Pertamina shall
terminate the rebuilding or reconstruction or shall not be
proceeding with such rebuilding or reconstruction diligently and in
good faith, then Pertamina shall be obligated promptly to pay to
each of the Tranche A Lender and the Agent such amounts as are
instructed by the Tranche A Lender and the Agent in an aggregate
amount equal to the lesser of the share referred to below of the
total insurance proceeds that are paid to Pertamina under such
policy in respect of such event and not in good faith expended or
committed to be expended (pursuant to a commitment which cannot by
its terms be avoided) on such rebuilding or reconstruction and the
aggregate amounts outstanding under the Loan Agreement, the Notes
and the Letter Agreement after giving effect to any payments made
pursuant to Section 4.1(b) and 4.2(b) hereof.

The share referred to in clauses (b) and (d) above of
such total insurance payments shall be (i) the total amount of such
payments minus the portion thereof payable to Jilco under the 1974
Development Agreement and the 1981 Development Agreement multiplied
by (ii) a fraction the numerator of which is the aggregate
principal amount of Indebtedness outstanding under the Loan
Agreement, Notes and the Letter Agreement at the time amounts are
payable to the Lenders under this Section 4.2 and the denominator
of which is equal to the sum of the aggregate principal amount of
the Indebtedness outstanding under the Loan Agreement and the
aggregate principal amount of all Indebtedness of any Person
outstanding at such time, the holders of which, directly or
indirectly, are entitled to share in the Plant Insurance Proceeds
prior to or on an equal and ratable basis with the Lenders (as the
Lenders' rights are determined under this Section 4.2).

4.3 Insurance Shortfall. If by reason of a failure of
Pertamina to comply with Section 1.11 hereof, the share of
insurance payments of the type referred to in Sections 4.1(b) and
(d) and 4.2(b) and (d) hereof is insufficient to pay in full all
principal, interest and other amounts payable under the Loan
Agreement, the Notes and all amounts payable under the Letter
Agreement (the amount of such insufficiency, an "Insurance
Shortfall"), Pertamina shall be obligated to pay the amount of the
Insurance Shortfall to each of the Tranche A Lender and the Agent
for the account of the Tranche B Lenders in such amounts as are
instructed by the Tranche A Lender and the Agent on the dates, in
the manner of and with the effect of payments made by the Borrower
as provided in the Loan Agreement, the Notes and the Letter
Agreement, such that the net amount received by the Lenders,
pursuant to this Section 4.3, after deduction of all Taxes required
to be deducted or withheld from, or otherwise paid by the Lenders,
with respect to, such payment (but excluding Excluded Taxes
required to be so deducted, withheld or otherwise paid solely to
the extent that the amount of such Excluded Taxes does not exceed
the amount of Excluded Taxes that would have been deducted,
withheld or otherwise paid by the Lenders if there had been no
Insurance Shortfall, and the net amount were paid to, and received
by, the Lenders out of an amount equal to such share of insurance),
shall equal the Insurance Shortfall.

4.4 Other Losses. Upon a partial loss of Train E or the
Bontang Plant, as the case may be, or a total loss with respect to
which Pertamina has not given notice pursuant to Sections 4.1 or
4.2 hereof that it intends not to rebuild and if Pertamina has not
applied amounts equal to the insurance proceeds paid to Pertamina
to repayment of the Indebtedness outstanding under the Loan
Agreement, the Notes and the Letter Agreement in the manner
contemplated by Section 4.1 and 4.2 hereof, Pertamina shall proceed
to rebuild or reconstruct Train E or the Bontang Plant, as the case
may be, diligently and in good faith applying amounts equal to the
proceeds of the insurance referred to in Section 1.11(a) or (b), as
the case may be, to the extent required and shall provide the
Tranche A Lender and the Agent with the periodic reports described
in clause 4.1(c) or 4.2(c) hereof, as the case may be, as provided
in such clause.

PART 5
SCOPE OF PRODUCERS' LIABILITIES

Except as stated in Sections 3.2, 3.3, 3.4 and Part 4
hereof and then only to the limited extent specifically stated
therein, no recourse shall be had for the payment of the principal
of or interest on the Notes or the payment of any other amounts due
under the Loan Agreement or the Letter Agreement, or shall be had
for any claim based on any provision of the Notes, the Loan
Agreement or the Letter Agreement, against any of the Producers, or
against any past, present or future stockholder, officer, director,
employee, or agent of any of the Producers, either directly or
through the Borrower or any successor of the Borrower, or under the
Trust Agreement, the Contingent Support Trust Agreements or under
any constitution, statute or rule of law or by the enforcement of
any assessment, or otherwise, and, except as above provided, no
such Person shall have any personal obligation, liability or duty
whatsoever to the Tranche A Lender, the Agent, the Lead Managers or
any of the Tranche B Lenders or any holders of the Notes or anyone
else for or with respect to any such payment, the performance of or
compliance with any covenant or agreement contained in the Loan
Agreement, the Letter Agreement, the Trust Agreement, the
Contingent Support Trust Agreements or this Agreement or the truth,
accuracy or completeness of any statement or representation made in
or pursuant to any such document. Furthermore, the obligations of
the Producers hereunder are several, and not joint or joint and
several, and there shall be no recourse to any Producer by any
Person party to the Loan Agreement or the Letter Agreement or by
any holder of a Note or otherwise for any liability of another of
the Producers which may have arisen hereunder, it being expressly
agreed and understood, however, that the failure of a Producer to
perform its obligations under this Agreement shall not relieve any
other Producer of its obligations hereunder.

The Tranche A Lender, the Agent, each Lead Manager, each
Tranche B Lender, each holder of any of the Notes and each other
Person relying on or purporting to rely on the terms of this
Agreement in adopting any course of action shall be bound by the
terms of this Part 5 of this Agreement to the same extent as if its
written acceptance of the terms hereof were subscribed hereto.

PART 6
MISCELLANEOUS

6.1 Notices. All notices, requests, demands or other
communications to or from the parties hereto shall be given or made
by telex, telecopier or by personal delivery, and shall be deemed
to have been duly given and made, in the manner provided in Section
10.1 of the Loan Agreement. Any such notice, request, demand or
communication shall be sent in the case of each Producer to its
address, telex number and answerback or telecopier number set forth
on the signature pages hereof; or in each case with respect to any
party to such other address or telex number as such party may
designate for the purpose by written notice to the party sending
such notice, request, demand or communication.

Huffco Indonesia, 6-11 Floor, Kuningan Plaza -South
Tower, Jalan H.R. Rasuna Said, Kav. cll-4, Jakarta Selatan,
Indonesia, Telex No. 79644421/7964457 (Answerback: HUFFCO IA)
Telecopier No.: 62-21-380-0037 shall receive notices and other
communications for, and is hereby designated the representative of,
Roy M. Huffington, Inc., Huffington Corporation, Virginia
International Company, Virginia Indonesia Company, Ultramar
Indonesia Limited, Union Texas East Kalimantan Limited and Universe
Tankships, Inc., for the receipt of notices and other
communications to such Persons under this Agreement. Total
Indonesie shall receive notices and other communications for itself
and Indonesia Petroleum, Ltd., and Unocal Indonesia, Ltd. shall
receive notices and other communications for itself and Indonesia
Petroleum, Ltd. A new or successor representative may be
designated by notice to such effect signed by all such appropriate
Persons given to the Tranche A Lender and the Agent 10 days in
advance of any such change. Until receipt of any such notice, the
Tranche A Lender and the Agent may rely on any notice or other
communication to the representative as being notice to each such
Person.

6.2 No Waiver; Remedies Cumulative. No failure to
exercise and no delay in exercising, on the part of any Person
having rights hereunder, any right, power or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other
right, power or privilege. Subject always to the provisions of
Part 5 hereof, the rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies provided by
law.

6.3 Assignment; Successors and Assigns; Participations.
This Agreement shall be binding upon and inure to the benefit of
the Tranche A Lender, the Lead Managers, the Tranche B Lenders, the
Agent and the holders from time to time of the Notes and their
respective successors and permitted assigns, in each case to the
extent that the provisions of the Loan Agreement and Letter
Agreement inure to the benefit of such Persons and their respective
successors and permitted assigns thereunder, and except as
specifically set forth in this Section 6.3, no Person shall have or
acquire any right or benefit hereunder or in respect of any obliga-
tion of any Producer herein contained. Except for the assignments
prior to the date hereof pursuant to the Supply Agreements by
Pertamina to the other Producers of the production sharing
percentages of such Producers in amounts payable by the Buyer under
the LNG Sales Contract and certain other amounts as specified in
the Supply Agreements, and except for the assignments pursuant to
the relevant supply agreements by Pertamina to the other Producers
of the production sharing percentages of such Producers in amounts
payable by the buyers under the Contingent Support Agreements and
certain other amounts as specified in such supply agreements, no
Producer may assign any rights or delegate any obligations
hereunder or assign any rights in or to the Source of Debt service
prior to deposit in the Bontang III Payment Account, or to the
Source of Contingent Support or Contingent Support in any manner
that would reduce any amount of Contingent Support payable to the
Borrower during any Contingent Support Period, without the written
consent of the Majority Lenders, such consent not to be
unreasonably withheld; provided that if another corporation, or
other entity, wholly-owned by or an agency of the Republic of
Indonesia should succeed to all rights and obligations of Pertamina
under the Trust Agreement and all of the Basic Agreements,
Contingent Support Agreements and Contingent Support Trust
Agreements to which it is a party, Pertamina may assign all of its
rights and delegate all of its obligations hereunder to such other
corporation, entity or agency, such assignment and delegation to
become effective upon such Person's written assumption (a copy of
which shall be provided to the Tranche A Lender and the Agent and
which shall confirm the assignment of rights and the assumption of
obligations by such Person under the Trust Agreement and the Basic
Agreements, Contingent Support Agreements and Contingent Support
Trust Agreements to which the assignor is a party) of all of
Pertamina's obligations hereunder including, without limitation,
the restrictions on assignments and delegations contained in this
Section 6.3 which shall apply to all assignees of the rights and
delegees of the obligations of Pertamina and its assignees and
delegees; and provided further that any Producer other than
Pertamina may assign its rights and delegate its obligations
hereunder and assign its rights with respect to the Source of Debt
Service, any Source of Contingent Support and Contingent Support,
in each case prior to deposit in the Bontang III Payment Account,
to the extent of and in conjunction with the assignment of its
rights and the delegation of obligations under the Trust Agreement
and the Basic Agreements, the Contingent Support Agreements and the
Contingent Support Trust Agreements, in each case to which it is a
party, such assignment and delegation to become effective upon such
Person's written assumption (a copy of which assumption shall be
provided to the Tranche A Lender and the Agent and which shall
confirm to the extent provided in such assignment and delegation
the assignment of rights and the assumption of obligations under
the Trust Agreement and the Basic Agreements, the Contingent
Support Agreements and the Contingent Support Trust Agreements, in
each case to which the assignor is a party) of such Producer's
obligations hereunder including without limitation, the
restrictions on assignments and delegations contained in this
Section 6.3 which shall apply to all assignees of the rights and
delegees of the obligations of such Producer and its assignees and
delegees. The Producers may treat each Lender as the holder of the
Note drawn to its order and delivered to such Lender until written
notice of transfer shall have been received by them. All
agreements, representations and warranties made herein shall
survive the making of any such transfer hereunder by any Lender.
Notwithstanding the foregoing, each Lender may grant
participations, in whole or in part, in its rights under this
Agreement to the extent that it may grant participations in its
rights under the Loan Agreement, Notes and Letter Agreement.

6.4 Amendments. Any provision of this Agreement may be
amended or waived if, and only if, such amendment or waiver shall
be in writing and signed (including the form of signatures on any
telex, cable or facsimile with appropriate confirmed answerback,
cable or facsimile copy duly sent by the Person so amending or
waiving) by the Producers, the Tranche A Lender, the Agent and the
Majority Tranche B Lenders; provided that any waiver need only be
signed by the party granting the waiver. Any such amendment or
waiver shall be signed by the Agent on behalf of the Tranche B
Lenders if the Agent has been so authorized in writing or by telex
or cable by the Majority Tranche B Lenders. Any amendment or
waiver signed by the Agent in accordance with the preceding
sentence shall be binding upon the Tranche B Lenders and any holder
of a Tranche B Note.

6.5 Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on
separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts together shall
constitute one and the same instrument. Complete sets of
counterparts shall be lodged with the Tranche A Lender, the Agent
and Pertamina.

6.6 Section Headings. The Section headings in this
Agreement are inserted for convenience of reference only and shall
be ignored in construing this Agreement.

6.7 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW
YORK,
UNITED STATES OF AMERICA, APPLICABLE TO AGREEMENTS MADE AND TO
BE
PERFORMED ENTIRELY WITHIN SUCH STATE.

6.8 CONSENT TO JURISDICTION.

(a) SOLELY FOR PURPOSES OF THIS AGREEMENT, EACH PRODUCER
HEREBY IRREVOCABLY CONSENTS THAT ANY SUIT, LEGAL ACTION OR
PROCEEDING AGAINST IT OR ANY OF ITS PROPERTY WITH RESPECT TO ANY
OF
THE OBLIGATIONS ARISING UNDER THIS AGREEMENT MAY BE BROUGHT IN
ANY
NEW YORK STATE COURT LOCATED IN THE BOROUGH OF MANHATTAN, CITY
AND
STATE OF NEW YORK OR ANY FEDERAL COURT OF THE UNITED STATES OF
AMERICA LOCATED IN THE SOUTHERN DISTRICT OF NEW YORK; AS THE
TRANCHE A LENDER, ANY TRANCHE B LENDER OR THE AGENT MAY ELECT,
AND
BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PRODUCER
HEREBY
IRREVOCABLY SUBMITS TO AND ACCEPTS, SOLELY AS AFORESAID, WITH
REGARD TO ANY SUCH SUIT, LEGAL ACTION OR PROCEEDING FOR ITSELF
AND
IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
NON-EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. EACH
PRODUCER
HEREBY IRREVOCABLY DESIGNATES, APPOINTS AND EMPOWERS CT
CORPORATION
SYSTEM, 1633 BROADWAY, NEW YORK, NEW YORK 10019 AS ITS AGENT TO
RECEIVE FOR AND ON ITS BEHALF SERVICE OF PROCESS IN NEW YORK IN ANY
SUIT, LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT.
IT IS UNDERSTOOD THAT A COPY OF ANY SUCH PROCESS SERVED ON SUCH
AGENT SHALL BE PROMPTLY FORWARDED BY AIRMAIL BY THE PERSON
COMMENCING SUCH SUIT, LEGAL ACTION OR PROCEEDING TO THE RELEVANT
PRODUCER AT ITS ADDRESS SET FORTH ON THE SIGNATURE PAGES HEREOF,
BUT THE FAILURE OF THE RELEVANT PRODUCER TO RECEIVE SUCH COPY
SHALL
NOT AFFECT IN ANY WAY THE SERVICE OF SUCH PROCESS AS AFORESAID. IF
SERVICE OF PROCESS CANNOT BE EFFECTED IN THE FOREGOING MANNER,
EACH
PRODUCER FURTHER, SOLELY AS AFORESAID, IRREVOCABLY CONSENTS TO
THE
SERVICE OF PROCESS IN ANY SUCH SUIT, LEGAL ACTION OR PROCEEDING BY
THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED AIRMAIL,
POSTAGE PREPAID, RETURN RECEIPT REQUESTED, TO THE RESPECTIVE
PRODUCER AT ITS ADDRESS SET FORTH ON THE SIGNATURE PAGES HEREOF.
THE FOREGOING, HOWEVER, SHALL NOT LIMIT THE RIGHT OF THE LENDERS
TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING
ANY
SUIT, LEGAL ACTION OR PROCEEDING OR TO OBTAIN EXECUTION OF
JUDGMENT
IN ANY OTHER JURISDICTION.

(b) SOLELY AS AFORESAID, EACH PRODUCER HEREBY IRREVOCABLY
WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE OF ANY SUIT, LEGAL ACTION OR PROCEEDING ARISING
OUT
OF OR RELATING TO THIS AGREEMENT IN ANY COURT LOCATED IN THE
BOROUGH OF MANHATTAN, CITY AND STATE OF NEW YORK AND HEREBY
FURTHER
IRREVOCABLY WAIVES ANY CLAIM IT MAY NOW OR HEREAFTER HAVE THAT
A
COURT LOCATED IN THE BOROUGH OF MANHATTAN, CITY AND STATE OF
NEW
YORK IS NOT A CONVENIENT FORUM FOR ANY SUCH SUIT, LEGAL ACTION OR
PROCEEDING. PERTAMINA REPRESENTS AND WARRANTS THAT THIS
AGREEMENT
AND ITS OBLIGATIONS MADE HEREUNDER AND THE TRANSACTIONS
CONTEMPLATED HEREBY CONSTITUTE COMMERCIAL RATHER THAN PUBLIC
OR
GOVERNMENTAL ACTS. EACH PRODUCER OTHER THAN PERTAMINA
REPRESENTS
AND WARRANTS THAT IT IS NOT ENTITLED TO CLAIM IMMUNITY FROM
LEGAL
PROCEEDINGS WITH RESPECT TO ITSELF OR ANY OF ITS PROPERTY ON THE
GROUNDS OF SOVEREIGNTY OR OTHERWISE UNDER ANY LAW OR IN ANY
JURISDICTION WHERE AN ACTION MAY BE BROUGHT FOR THE ENFORCEMENT
OF
ANY OF THE OBLIGATIONS ARISING UNDER THIS AGREEMENT OR THE TRUST
AGREEMENT. TO THE EXTENT THAT ANY PRODUCER OR ANY OF ITS
PROPERTY
OR THE SOURCE OF DEBT SERVICE, SOURCE OF CONTINGENT SUPPORT OR
CONTINGENT SUPPORT PRIOR TO DEPOSIT IN THE BONTANG III PAYMENT
ACCOUNT OR IN THE RELEVANT CONTINGENT SUPPORT ACCOUNT HAS OR
HEREAFTER MAY ACQUIRE ANY CLAIM OF RIGHT TO IMMUNITY FROM
SET-OFF,
LEGAL PROCEEDINGS, ATTACHMENT PRIOR TO JUDGMENT, OTHER
ATTACHMENT,
LEVY OR EXECUTION OF JUDGMENTS ON THE GROUNDS OF SOVEREIGNTY OR
OTHERWISE, EACH PRODUCER ON BEHALF OF ITSELF AND ANY SUCCESSORS,
SOLELY AS AFORESAID, HEREBY IRREVOCABLY WAIVES SUCH CLAIM OF
RIGHT
TO IMMUNITY FOR ITSELF AND ITS PROPERTY IN RESPECT OF ITS
OBLIGATIONS ARISING UNDER THIS AGREEMENT, THE TRUST AGREEMENT
AND
EACH CONTINGENT SUPPORT TRUST AGREEMENT AND EACH PRODUCER
AGREES
THAT IT WILL NOT ASSERT ANY SUCH RIGHT TO IMMUNITY IN ANY WAY
WHICH
WOULD IMPAIR THE PERFORMANCE OR ABILITY OF THE BORROWER TO
PERFORM
ITS OBLIGATIONS UNDER THE LOAN AGREEMENT.

6.9 Severability. If any one or more of the provisions
contained in this Agreement or any document executed in connection
herewith shall be invalid, illegal or unenforceable in any respect
under any applicable law, the validity, legality and enforceability
of the remaining provisions contained herein shall not be in any
way affected or impaired.

6.10 Reinstatement. The obligations of the Producers to
make payments under this Agreement shall continue to be effective
or shall be reinstated, as the case may be, if, at any time, a
payment or any part thereof, of any amount paid to a Lender in
respect of which a Producer is obligated to make payment hereunder
is rescinded or must otherwise be restored or returned by the
Lender upon the insolvency, bankruptcy or reorganization of the
Borrower or for any other reason, all as though such payment had
not been made.

6.11 Confidentiality. No copy of (a) this Agreement,
the Loan Agreement or the Trust Agreement or (b) any other
agreement to which any Producer or the Trustee is a party or any
document signed or issued by or on behalf of any such Producer,
which agreement or document is identified by any Producer to the
Tranche A Lender and the Agent as confidential, shall, without
Pertamina's consent for the agreements referred to in clause (a),
or the consent of the relevant Producer for agreements or documents
referred to in clause (b), be released or otherwise delivered by or
on behalf of the Tranche A Lender, the Agent or any Tranche B
Lender to any third party, except, prior to the Effective Date, to
any prospective lender in connection with the transactions
contemplated hereby pursuant to a confidentiality undertaking in a
form approved by the Producers on or prior to the date hereof.
Notwithstanding the foregoing, the agreements and documents
referred to in the preceding sentence may be released to any
prospective assignee of or participant in the rights of the Lenders
under the Loan Agreement, the Notes and this Agreement upon
execution by such Person of a confidentiality undertaking in a form
substantially similar to that approved by the Producers on or prior
to the date hereof. No public announcement or statement or
publication relating to any of the foregoing shall be made or
released by or on behalf of the Tranche A Lender, the Agent or any
Tranche B Lender, without the prior written approval of the
Producers.

6.12 The parties hereto acknowledge that amounts
deposited in the Bontang Excess Sales Account (KCO Quantities)
during any First or Second Contingent Support Period may be
affected by adjustments made from time to time pursuant to Section
1.6 of the Bontang I Trust Agreement and that the amounts to be
paid to the Borrower therefrom will be similarly affected. The
parties hereto further acknowledge that amounts once received by
the Bontang Excess Sales Trustee as described in the preceding
sentence for any Contingent Support Period are final
notwithstanding any adjustments made pursuant to such Section 1.6
subsequent to such Contingent Support Period.
* * * * *
<PAGE>
The undersigned Producers have caused this Agreement to
be duly executed by their respective duly authorized signatories as
of the date hereof.

PERUSAHAAN PERTAMBANGAN MINYAK
DAN GAS BUMI NEGARA (PERTAMINA)
Jalan Medan Merdeka Timur 1A
Jakarta - Indonesia
Telex No.: 44441/44134
Answerback: PERTA JKT/
PERTA IA By: /s/Abdul Rachman Ramly
Telecopier No. 62-21-720-0300 Name: Abdul Rachman Ramly
Attention: Director of Processing Title: President Director

ROY M. HUFFINGTON, INC.
P.O. Box 4455
Houston, Texas 77210
U.S.A.
Telex No. 762810
Answerback: HUFFCO HOU By: /s/John J. Patton
Telecopier No. 1-713-651-0104 Name: John J. Patton
Attention: Treasurer Title: Vice President

HUFFINGTON CORPORATION
P.O. Box 4455
Houston, Texas 77210
U.S.A.
Telex No.: 762810
Answerback: HUFFCO HOU By: /s/Michael B. Decker
Telecopier No. 1-713-651-0104 Name: Michael B. Decker
Attention: Roy M. Huffington Title: Vice President

<PAGE>
VIRGINIA INTERNATIONAL
COMPANY
120 White Plains Road
Tarrytown, New York 10591
U.S.A.
Telex No.: 179094
Answerback: AMULT UT
Telecopier No. 1-914-332-0807 By: /s/James Wall
Attention: R. W. Bland Name: James Wall
Title: Attorney-in-Fact

VIRGINIA INDONESIA COMPANY
120 White Plains Road
Tarrytown, New York 10591
U.S.A.
Telex No.: 178998
Answerback: AMULT UT By: /s/James Wall
Telecopier No. 1-914-332-0807 Name: James Wall
Attention: R.W. Bland Title: Attorney-in-Fact

ULTRAMAR INDONESIA LIMITED
c/o American Ultramar Limited
120 White Plains Road
Tarrytown, New York 10591
U.S.A. By: /s/P. J. Guarina
Telex No.: 178999 Name: P. J. Guarino
Answerback: AMULT UT Title: Vice President
Telecopier No. 1-914-332-0807
Attention: R. W. Bland

UNION TEXAS EAST KALIMANTAN
LIMITED
c/o Union Texas Petroleum Corporation
P.O. Box 2120
Houston, Texas 77252-2120
U. S. A.
Telex No.: 775255 By: /s/M. M. Markowitz
Answerback: UNOTEX PET HOU Name: M. N. Markowitz
Telecopier No. 1-713-968-2771 Title:
Attention: A.C. Berman

UNIVERSE TANKSHIPS, INC.
c/o Universe Tankships
(Delaware) Inc.
1345 Avenue of the Americas
New York, New York 10105 By: /s/
U. S. A. Name:
Telex No.: 620-312 Title:
Answerback: AMTANK
Telecopier No. 1-212-765-3000
Ext.322
Attention: W. E. Fisher, Jr.
President

TOTAL INDONESIE

Tromolopos 10
Jakarta 10002
Indonesia
Telex No.: 44108
Answerback: TOTAL JKT
Telecopier No.: 62-21-520-0834
Attention: General Manager By: /s/Melchoir De Meatharel
Name: Melchoir De Matharel
Title: General Manager

10th Floor, Toranomon 37 INDONESIA PETRDLEUM, LTD.
Mori Building
No. 5-1, Toranomon 3-Chome
Minato-ku, Tokyo 105, Japan
Telex No.: 2424210 By: /s/Si Sugiyama
Answerback: JAIPEX J Name: Si Sugiyama
Telecopier No.: 81-3-434-1603 Title: Director and General
Manager
Attention: General Manager of Marketing Jakarta Office

<PAGE>
Ratu Plaza Office Tower UNOCAL INDONESIA, LTD.
7th Floor
Jalan Jenderal Sudirman
Jakarta, Indonesia
Telex No.: 47335 By: /s/Donald A. Mackay
Answerback: UNOCAL IA Name: Donald A. Mackay
Telecopier No.: 62-21-711-954 Title: Regional Director of
Finance
Attention: President

Accepted:

TRAIN-E FINANCE CO., LTD.

By: /s/Rintaro Hara
Name: Rintaro Hara
Title: Executive Vice President

THE INDUSTRIAL BANK OF JAPAN
TRUST COMPANY, AS AGENT

By: /s/Yoshiro Teranaka
Name: Yoshiro Teranaka
Title: Executive Vice President

THE INDUSTRIAL BANK OF JAPAN
TRUST COMPANY

By: /s/Yoshiro Teranaka
Name: Yoshiro Teranaka
Title: Executive Vice President

<PAGE>
THE BANK OF TOKYO, LTD.
NEW YORK AGENCY

By: /s/Takefumi Mumta
Name: Takefumi Mumta
Title: Attorney-in-Fact

THE LONG-TERM CREDIT BANK OF JAPAN, LIMITED
NEW YORK BRANCH

By: /s/Kenichi Amano
Name: Kenichi Amano
Title: Deputy General Manager

BANQUE INDOSUEZ
NEW YORK

By: /s/Yves G. Gaden
Name: Yves G. Gaden
Title: First Vice President
Attorney-in-fact

THE DAI-ICHI KANGYO BANK, LIMITED
NEW YORK BRANCH

By: /s/Munetoshi Matsumoto
Name: Munetoshi Matsumoto
Title: Vice President

THE DAIWA BANK, LIMITED
NEW YORK BRANCH

By: /s/Hiroyuki Doi
Name: Hiroyuki Doi
Title: Manager

THE FUJI BANK AND TRUST COMPANY

By: /s/Mitsuhiro Naguhama
Name: Mitsuhiro Naguhama
Title: Vice President

THE MITSUBISHI BANK, LIMITED
NEW YORK BRANCH

By: /s/Takishi Yokokawa
Name: Takishi Yokokawa
Title: Manager

THE MITSUBISHI TRUST AND BANKING CORPORATION
NEW YORK BRANCH

By: /s/Ryoichi Mizukami
Name: Ryoichi Mizukami
Title: Manager

THE MITSUI BANK, LTD.
NEW YORK BRANCH

By: /s/Ken-Ichi Sato
Name: Ken-Ichi Sato
Title: Senior Vice President

THE MITSUI TRUST & BANKING CO., LTD.
NEW YORK BRANCH

By: /s/Kazuo Yasuda
Name: Kazuo Yasuda
Title: Deputy Manager

THE SAITAMA BANK, LTD.
NEW YORK BRANCH

By: /s/Takayoshi Tasaka
Name: Takayoshi Tasaka
Title: Senior Manager

THE SANWA BANK, LIMITED
NEW YORK BRANCH

By: /s/Toshihiko Yashizawa
Name: Toshihiko Yashizawa
Title: Vice President

THE SUMITOMO BANK LIMITED
NEW YORK BRANCH

By: /s/Kazuyoshi Ogawa
Name: Kazuyoshi Ogawa
Title: Vice President

THE TOKAI BANK, LIMITED
NEW YORK BRANCH

By: /s/Toshikazu Nakano
Name: Toshikazu Nakano
Title: Vice President

THE TOYO TRUST & BANKING CO., LTD.
NEW YORK BRANCH

By: /s/Robert J. Tse
Name: Robert J. Tse
Title: Vice President
<PAGE>
Schedule 1

Liability Share Percentages

Pre Tax
Percentage
Interest (%)

Pertamina 20.4545%

Roy M. Huffington, Inc. 3.7673%

Huffington Corporation 0.9418%

Virginia International Company 3.6790%

Virginia Indonesia Company 1.7659%

Ultramar Indonesia Limited 6.1808%

Union Texas East Kalimantan Limited 6.1808%

Universe Tankships, Inc. 1.0301%

Total Indonesie 18.1299%

Unocal Indonesia, Ltd. 9.8700%

Indonesia Petroleum, Ltd. 27.9999%

100%

BONTANG III LOAN AGREEMENT

_______________________

$316,000,000.00

CONTINENTAL BANK INTERNATIONAL

as Trustee
under the Bontang III Trustee and
Paying Agent Agreement

as Borrower,

TRAIN-E FINANCE CO., LTD.

as Tranche A Lender,

the banks named herein as Lead Managers
and Tranche B Lenders

and

THE INDUSTRIAL BANK OF JAPAN TRUST COMPANY

as Agent

for the Tranche B Lenders named herein

__________________

Dated as of February 9, 1988
<PAGE>
LOAN AGREEMENT

AGREEMENT dated as of February 9, 1988 among

(i) CONTINENTAL BANK INTERNATIONAL, not in its individual
capacity but solely as Trustee under the Bontang III Trustee and
Paying Agent Agreement among it and PERUSAHAAN PERTAMBANGAN
MINYAK DAN GAS BUMI NEGARA, ROY M. HUFFINGTON, INC., HUFFINGTON
CORPORATION, VIRGINIA INTERNATIONAL COMPANY, VIRGINIA INDONESIA
COMPANY, ULTRAMAR INDONESIA LIMITED, UNION TEXAS EAST
KALIMANTAN
LIMITED, UNIVERSE TANKSHIPS, INC., TOTAL INDONESIE, UNOCAL
INDONESIA, LTD and INDONESIA PETROLEUM, LTD., dated as of the
date hereof;

(ii) TRAIN-E FINANCE CO., LTD., as Tranche A Lender;

(iii) THE INDUSTRIAL BANK OF JAPAN TRUST COMPANY, THE
BANK OF TOKYO, LTD., THE LONG-TERM CREDIT BANK OF JAPAN, LIMITED
and BANQUE INDOSUEZ, as Lead Managers;

(iv) the banks and other financial institutions named under
the caption "Tranche B Lenders" on the signature pages hereof;
and

(v) THE INDUSTRIAL BANK OF JAPAN TRUST COMPANY, as Agent
for the Tranche B Lenders.

W I T N E S S E T H:

WHEREAS, the Borrower has requested the Tranche A Lender and
the Tranche B Lenders to make advances to the Borrower upon the
terms and subject to the conditions of this Agreement in an
aggregate principal amount of $189,600,000.00 for Tranche A and
$126,400,000.00 for Tranche B, respectively, for the purpose of
paying (i) the costs incurred or to be incurred in connection
with the design, engineering, procurement and construction of or
otherwise relating to Train E and (ii) interest, fees, expenses,
taxes and other amounts payable by the Borrower pursuant to
Sections 2.3, 2.7, 2.8, 3.3, 3.4(b) and 10.6 hereof;

WHEREAS, the Tranche A and Tranche B Lenders are prepared,
severally, and not jointly or jointly and severally, to make such
advances to the Borrower on a pro rata basis
upon the terms and subject to the conditions of this Agreement;
and

WHEREAS, no recourse shall be had for any amount due under
this Agreement against Continental Bank International in its
individual capacity, with certain proceeds from the sale of
liquefied natural gas being the sole source of repayment
hereunder of all such amounts, except as specifically provided
herein.

NOW, THEREFORE, in consideration of the mutual promises
contained herein, the parties hereto agree as follows:

SECTION 1. DEFINITIONS

As used in this Agreement,'the following capitalized
expressions shall have the following respective meanings, such
meanings to be applicable to both the singular and the plural
forms of such expressions:

"Advance" means, with respect to Tranche A, each advance by
the Tranche A Lender, and, with respect to Tranche B, each
advance by a Tranche B Lender, in each case to the Borrower
hereunder on a Borrowing Date or, where the context so requires,
the amount of such advance from time to time outstanding.

"Agent" means The Industrial Bank of Japan Trust Company
acting in its capacity as agent for the Tranche B Lenders
hereunder, or any successor thereto appointed pursuant to Section
8.10 hereof.

"Applicable Margin" means for Advances with respect to
Tranche B (including any Deferred Portion thereof) and with
respect to any Deferred Portion of Tranche A (i) on any date
during the period beginning on the Effective Date and ending on
the Completion Date, 1%, (ii) on any date during the period
beginning on the date following the Completion Date and ending on
the date that is the fifth anniversary of the Completion Date,
7/8%, and (iii) on any date following such fifth anniversary date
while this Agreement is in effect, 1%.

"Assumed Interest Rate" means the interest rate per annum
agreed by the Borrower and the Majority Lenders on or prior to
the date hereof; provided, however, that at any time and from
time to time following the date hereof upon the reasonable
request of the Borrower, the Tranche A Lender or the Agent on
behalf of the Majority Tranche B Lenders, then the Borrower, the
Tranche A Lender and the Agent on behalf of the Majority Tranche
B Lenders shall negotiate in good faith to reach agreement on an
interest rate per annum to serve as the Assumed Interest Rate
which is acceptable to the Borrower, the Tranche A Lender and the
Agent on behalf of the Majority Tranche B Lenders. If agreement
cannot be reached on such interest rate within 30 days following
a request for such negotiations, then the Assumed Interest Rate
shall be the interest rate per annum specified in good faith by
the Tranche A Lender and the Agent on behalf of the Majority
Tranche B Lenders.

"Availability Period" means the period beginning on the
Effective Date and ending on the earlier of (i) the date six
months following the Completion Date or (ii) September 30, 1990.

"Basic Agreements" means the agreements listed on Schedule 1
hereto.

"Bontang Excess Sales Account (KCO Quantities)" has the
meaning set forth in Article 1 of the Bontang Excess Sales Trust
Agreement.

"Bontang Excess Sales Account (Yokkaichi Trade)" has the
meaning set forth in Article 1 of the Bontang Excess Sales Trust
Agreement.

"Bontang Excess Sales Trust Agreement" has the meaning set
forth in Article 1 of the Trust Agreement.

"Bontang I Trust Agreement" has the meaning set forth in
Article 1 of the Trust Agreement.

"Bontang Plant" means the natural gas liquefaction plant at
Bontang Bay on the east coast of Kalimantan, Indonesia including
all related facilities, such as natural gas processing plants for
the production of LNG and liquefied petroleum gas consisting of
propane and butane, utilities, storage tanks, loading lines and
arms, harbor, docks, berths, tug boats, residential community,
workshops, offices, fixed plant and equipment and communication
systems, together with replacements, improvements, additions and
expansions of all such facilities (including Train E), together
also with natural gas transmission lines extending from "Delivery
Points" as defined in the Processing Agreement, and from such
other points in other fields from which natural gas is supplied,
to the said natural gas liquefaction plant (including associated
knock-out drums but excluding natural gas gathering pipelines
within fields).

"Bontang III Payment Account" has the meaning set forth in
Article 1 of the Trust Agreement.

"Borrowed Amounts" means any amounts borrowed pursuant to
the first sentence of Section 2.2(b) hereof.

"Borrower" means Continental Bank International, solely as
Trustee under the Trust Agreement and not in its individual
capacity. The term "Borrower" does not include Continental Bank
International in any other capacity or any one or more of the
Producers.

"Borrowing" means a borrowing hereunder consisting of
Advances of a Tranche made to the Borrower at the same time by
all then participating Lenders severally.

"Borrowing Date" means (i) a Business Day prior to February
18, 1988 specified in a Notice of Borrowing as a date on which
the Borrower will make a Borrowing hereunder, (ii) thereafter
each March 31, June 30, September 30 and December 31 during the
Availability Period and (iii) the last day of the Availability
Period; provided that if a Borrowing Date would otherwise occur
on a date which is not a Business Day, such Borrowing Date shall
be the immediately preceding Business Day.

"Business Day" means any day on which (i) dealings in Dollar
deposits are carried on in the London interbank market and (ii)
commercial banks are not authorized or required to close in any
of London, the City of New York or Tokyo.

"Buyer" means Chinese Petroleum Corporation, a corporation
organized under the laws of the Republic of China, as buyer under
the LNG Sales Contract.

"Chubu Sales Contract" means the LNG Sales and Purchase
Contract (Yokkaichi LNG Trade) between Pertamina and Nusantara
Gas Services Company, Inc. ("Nusantara"), dated August 28, 1987,
as heretofore and hereafter amended, including any extension or
renewal thereof, as supplemented by the Agreement Regarding
Incentive Volumes between Pertamina and Chubu Electric Power Co.,
Inc., dated August 28, 1987, as heretofore and hereafter amended,
and by the Side Letter to LNG Sales and Purchase Contract
(Yokkaichi LNG Trade) between Pertamina and Nusantara, dated
August 28, 1987, as heretofore and hereafter amended.

"Commitment" means, with respect to each Lender, the
principal amount set forth opposite such Lender's name under the
caption "Commitment" on the signature pages hereof, as such
amounts may be reduced from time to time pursuant to Section 3.7
hereof, or such Lender's commitment to lend such amounts, as the
context may require.

"Completion Date" means the date on which each of the
Tranche A Lender and the Agent shall have received a written
notice from the Borrower as required by Section 6.1(e) hereof, to
which is attached a notice from Pertamina to the effect that:

(i) the construction of Train E has been completed in
accordance with the Development Plan and Train E has been fully
and finally accepted by Pertamina under the Construction
Agreement;

(ii) Train E has demonstrated processing capabilities
consistent with those contained in the Development Plan and at
least 170,000 metric tons of LNG meeting the quality
specifications set forth in the LNG Sales Contract have been
produced over a period of 30 consecutive days and delivered to
storage during such period; and

(iii) actual aggregate shipments after the Start-up of
at least two full cargoes of LNG have been made to the Receiving
Facilities pursuant to the LNG Sales Contract during the 30-day
period referred to in clause (ii) above.

"Completion of the Receiving Facilities" means the first
date on which the Buyer is able to receive LNG at the Receiving
Facilities on a continuing basis so as to be in a position to
perform its obligations to purchase and receive LNG under the LNG
Sales Contract.

"Construction Agreement" means the Bontang LNG Expansion
Project Train E Agreement (Contract No. B30-JMC-001) to be
entered into prior to the initial Borrowing among Pertamina,
Chiyoda Chemical Engineering & Construction Co., Ltd. and
Mitsubishi Corporation, as thereafter amended.

"Contingent Reserve Account" has the meaning set forth in
Article I of the Trust Agreement.

"Contingent Support" means any or all of the First,, Second
or Third Contingent Supports.

"Contingent Support Account" means each of the Bontang
Excess Sales Account (KCO Quantities), Bontang Excess Sales
Account (Yokkaichi Trade) and each Future Long Term
Sales Contingent Support Account, Future Spot Sales Contingent
Support Account, Special Spot Contingent Support Account and the
relevant account for Contingent Support under each Special Long
Term Sales Trust Agreement.

"Contingent Support Agreements" means the agreements listed
on Schedule 2 hereto.

"Contingent Support Period" means any of the First, Second
or Third Contingent Support Periods.

"Contingent Support Trust Agreements" means the Bontang
Excess Sales Trust Agreement, the Bontang I Trust Agreement and
any Special Long Term Sales Trust Agreement.

"Debt Coverage Ratio" means:

(i) during the Availability Period, an amount determined as
the product of (a) (i) the sum of (x) the present value as of the
later of June 30, 1990 or the time of calculation (determined by
discounting by the Discount Rate at the time of calculation) of
the Source of Debt Service reasonably anticipated to be payable
from such later date to the Final Maturity Date plus (y) the
amount held in the Reserve Account at the time of calculation,
divided by (ii) the total Commitments, multiplied by (b) 100; and

(ii) thereafter, an amount determined as the product of (a)
(i) the sum of'(x) the present value as of the time of
calculation (determined by discounting by the Discount Rate at
the time of calculation) of the Source of Debt Service reasonably
anticipated to be payable from the time of calculation to the
Final Maturity Date plus (y) the amount held in the Reserve
Account at the time of calculation, divided (ii) by the
outstanding principal amount of the Notes at the time of
calculation, multiplied by (b) 100.

During any Contingent Support Period, the references to "the
Source of Debt Service reasonably anticipated to be payable to
the Final Maturity Date" contained in this definition of Debt
Coverage Ratio shall be deemed to mean the amounts of Contingent
Support reasonably anticipated to be payable during such
Contingent Support Period (taking into account the amounts of
Source of Contingent Support reasonably anticipated to be payable
during such Contingent Support Period) plus, if it is reasonably
anticipated that such Contingent Support Period will end, any
Source of Debt Service reasonably anticipated to be payable after
the end thereof to the Final Maturity Date.

For purposes of calculating the Debt Coverage Ratio,
whenever (i) a quarterly calculation of the Debt Coverage Ratio
is required pursuant to Section 6.1(b) hereof, (ii) the Tranche A
Lender or the Agent on behalf of the Majority Tranche B Lenders
requests a calculation in accordance with Section 6.1(c) hereof,
or (iii) at any time the Borrower reasonably requests, the
Borrower, the Tranche A Lender and the Agent shall negotiate in
good faith to reach agreement on assumptions necessary for
calculating the Debt Coverage Ratio which are acceptable to the
Borrower, the Tranche A Lender and the Agent on behalf of the
Majority Tranche B Lenders. If the Borrower, the Tranche A
Lender and the Agent on behalf of the Majority Tranche B Lenders
cannot reach agreement on such assumptions within 10 days prior
to the date a quarterly statement is due under Section 6.1(b)
hereof or within 30 days following a request by one to the others
for such negotiations, whichever is earlier, then the assumptions
used for purposes of the relevant calculation or calculations
shall be those specified in good faith by the Tranche A Lender
and the Agent on behalf of the Majority Tranche B Lenders.

"Debt Coverage Reserve Account" has the meaning set forth in
Article 1 of the Trust Agreement.

"Debt Service Account" has the meaning set forth in Article
1 of the Trust Agreement.

"Deferred Portion" means any portion of the outstanding
principal amount of a Tranche, the payment of which has been
deferred pursuant to Section 2.10(b) hereof.

"Development Plan" means the Development Plan for Train E
entitled BADAK LNG III (TRAIN E) PROJECT DEVELOPMENT PLAN dated
December 1987, as heretofore and hereafter amended.

"Discount Rate" means at any time the weighted average
(based on principal amounts then outstanding) of (i) with respect
to Tranche A, 11-1/2% per annum and (ii) the Assumed Interest
Rate as if it were the interest rate applicable to Tranche B.

"Disputed Force Majeure Account Agreement" means the
agreement so entitled, dated as of March 19, 1987, between
Pertamina, the Buyer and Chemical Bank, as heretofore and
hereafter amended.

"Dollars" and the sign "$" mean such coin or currency of the
United States of America as is, at the relevant time, legal
tender for the payment of public and private debts.

"Drawdown Schedule" means the schedule of Borrowings on each
of the Borrowing Dates in accordance with Schedule 3 hereto as
amended or supplemented pursuant to Section 2.2(b) hereto.

"Effective Date" means the date this Agreement is fully
executed by all of the parties hereto.

"Encumbrance" means any lien, security interest, mortgage,
deed of trust, pledge, charge or any other encumbrance of any
kind, including, without limitation, the rights of a vendor,
lessor or similar party under any conditional sale agreement or
other title retention agreement or lease substantially equivalent
thereto, any production payment, and, with respect to any
property or assets, any other right of or arrangement with any
creditor to have its claim satisfied out of any such property or
assets, or the proceeds therefrom, prior to the general creditors
of the owner thereof.

"Escrow Agreement" means the Badak Escrow and Trust
Agreement dated as of July 15, 1974 among Pertamina, The
Industrial Bank of Japan, Limited and Japan Indonesia LNG Co.,
Ltd., as heretofore and hereafter amended.

"Event of Default" means any of the events specified in
Section 7 hereof.

"Excluded Taxes" means:

(i) with respect to Tranche A, (x) any Taxes imposed by
Japan or any department, agency or political subdivision or
taxing authority thereof or therein and (y) the additional amount
of any Taxes that may be imposed upon or with respect to a
Payment arising solely by reason of the fact that the Tranche A
Lender changes the source of the funds it uses to make or
maintain Advances from that contemplated as of the date of this
Agreement, for any reason other than a change in the source of
funding made in connection with maintaining any Overdue Amounts
or any Deferred Portion of Tranche A; and

(ii) with respect to Tranche B, (x) any Taxes (including
withholdings) based upon gross or net income payable by a Tranche
B Lender or the Agent to the jurisdiction of such Lender's
incorporation or the jurisdictions in which such Lender capital
has its principal executive office or in which its Lending Office
is located, or any department, agency or other political
subdivision or taxing authority in any of such jurisdictions and
(y) the additional amount of any Taxes (other than Taxes
described in the preceding clause (x) prior to a change in the
Lending Office) that may be imposed upon or with respect to a
Payment arising solely by reason of the facts that the Lender is
a foreign corporation or other non-resident person within the
meaning of the Internal Revenue Code of 1986, as amended, and the
Lending office receiving such Payment is not located in the
United States of America. Solely for purposes of the preceding
sentence, the term "Lending Office" shall mean, in addition to
the definition set forth below in this Section 1, a branch or
office of a Tranche B Lender which has physical custody of a
Tranche B Note, this Agreement or the Letter Agreement or which
conducts the activities that are the responsibilities of a
Tranche B Lender described in this Agreement or, solely in the
event that a taxing jurisdiction asserts a tax by reason of the
fact that a branch or office of a Tranche B Lender previously had
(but no longer has) such custody or conducted (but no longer
conducts) such activities, such other branch or office.

"Final Maturity Date" means the fortieth Maturity Date
occurring following the last day of the Availability Period.

"First Contingent Support" means amounts from time to time
held in the Contingent Support Accounts (other than the Special
Spot Contingent Support Accounts) under the Bontang Excess Sales
Trust Agreement, which amounts are (a) 100% of (i) the gross
invoice amount payable under the Chubu Sales Contract, any Future
Long Term Sales Contract and any Future Spot Sales, on a cargo by
cargo basis, and received by the Bontang Excess Sales Trustee
under the Bontang Excess Sales Trust Agreement, less any relevant
Permitted Amounts, plus (ii) any relevant Related Amounts, and
(b) all amounts received by the Bontang Excess Sales Trustee
under the Bontang Excess Sales Trust Agreement from the Trustee
under the Bontang I Trust Agreement relating to the Korean
Carry-Over Quantities. With respect to the First Contingent
Support Period referred to in clause (i) of the definition
thereof, there are no Future Long Term Sales Contracts or Future
Spot Sales.

"First Contingent Support Period" means each of (i) if
Start-up does not occur prior to January 1, 1990, the period
commencing on January 1, 1990 and ending on the earlier to occur
of (x) Start-up and (y) September 30, 1990, (ii) if Completion of
the Receiving Facilities does not occur on or before September
30, 1990, the period commencing on October 1, 1990 and ending on
the date of Completion of the Receiving Facilities, (iii) if
Pertamina exercises its right to suspend deliveries under Section
10.5 of the LNG Sales Contract, the period of such suspension,
and (iv) the periods referred to in clauses (ii) and (iii) of the
definition of Third Contingent Support Period contained herein.

"Future Long Term Sales Contracts" means, with respect to
any First Contingent Support Period referred to in clauses (ii),
(iii) and (iv) of the definition thereof, all Long Term Sales
Contracts, other than Special Long Term Sales Contracts, in
effect and with respect to which payment or performance or both
are not yet completed (and any proceeds of which have not been
deposited in the relevant Contingent Support Account under the
Bontang Excess Sales Trust Agreement) at the time of commencement
of such First Contingent Support Period.

"Future Long Term Sales Contingent Support Accounts" has the
meaning set forth in Article 1 of the Bontang Excess Sales Trust
Agreement.

"Future Spot Sales" means, with respect to any First
Contingent Support Period referred to in clauses (ii), (iii) and
(iv) of the definition thereof, all Spot Sales, other than
Special Spot Sales, pursuant to agreements in effect and with
respect to which payment or performance or both are not yet
completed (and any proceeds of which have not been deposited in
the relevant Contingent Support Account under the Bontang Excess
Sales Trust Agreement) at the time of commencement of such First
Contingent Support Period.

"Future Spot Sales Contingent Support Accounts" has the
meaning set forth in Article 1 of the Bontang Excess Sales Trust
Agreement.

"Gross Invoice Amount" means the sum of (i) the amounts
payable to the Borrower pursuant to the LNG Sales Contract in
respect of LNG purchased or, if not taken, required to be
purchased but not taken thereunder, (ii) amounts payable to the
Borrower pursuant to Section 6.3 of each Supply Agreement or
Section 23 of the Transportation Agreement (with respect to
amounts payable to Pertamina), (iii) all amounts payable to the
Borrower pursuant to Section 5 of the Disputed Force Majeure
Account Agreement, (iv) all amounts payable to the Borrower on
account of interest due by reason of the late payment of invoices
for LNG under Section 10.3(c) of the LNG Sales Contract and (v)
all demurrage payable to the Borrower by the Buyer under Section
4.4(c) of the LNG Sales Contract; provided that the Gross Invoice
Amount shall not be reduced by any rebate, setoff, reduction or
discount given or agreed to by one or more parties to the LNG
Sales Contract from such amount payable as so defined, adjusted
and calculated.

"Guarantee" by any Person means any obligation, contingent
or otherwise, of such Person guaranteeing any Indebtedness or
other obligation of any other Person and, without limiting the
generality of the foregoing, any obligation, direct or indirect,
contingent or otherwise, of such Person (i) to purchase or pay
(or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation (whether arising by virtue of
partnership arrangements, by agreement to keep-well, to purchase
assets, goods, securities or services, to take-or-pay or to
maintain financial statement conditions or otherwise) or (ii)
entered into for the purpose of assuring in any other manner the
obligee of such Indebtedness or other obligation of the payment
thereof or to protect such obligee against loss in respect
thereof (in whole or in part); provided that the term Guarantee
shall not include endorsements for collection or deposit in the
ordinary course of business.

"Indebtedness" means, with respect to any Person, (i) all
indebtedness or obligations of such Person for borrowed money,
(ii) all indebtedness or obligations of such Person evidenced by
bonds, debentures, notes, swap agreements or other similar
instruments or agreements, and all securities issued by such
Person providing for mandatory payments of money, whether or not
contingent, (iii) all obligations of such Person to pay the
deferred purchase price of property or services, except trade
accounts payable arising in the ordinary course of business, (iv)
all obligations of such Person as lessee under capital leases,
(v) all obligations of such Person to purchase securities (or
other property) which arise out of or in connection with the sale
of the same or substantially similar securities or property, (vi)
all non-contingent obligations of such Person to reimburse any
Person in respect of amounts paid under a letter of credit or
similar instrument to the extent that such reimbursement
obligations remain outstanding five business days after they
become non-contingent, (vii) Indebtedness of others secured by an
Encumbrance on any asset of such Person, whether or not such
Indebtedness is assumed by such Person or (viii) all Guarantees
by such Person of or with respect to the Indebtedness of another
Person.

"Interest Payment Date" means the last day of each Interest
Period.

"Interest Period" means (except in the case of the initial
Interest Period), with respect to Tranche A, a period of three
months, and, with respect to Tranche B, a period of three or six
months selected or deemed selected by the Borrower as provided in
Section 2.4 hereof, and, in each case, determined as follows:

(i) The initial Interest Period for each Borrowing will
begin on the date of such Borrowing and will end on the March 31,
June 30, September 30 or December 31 next occurring within three
months thereafter, and each subsequent Interest Period for such
Borrowing will begin on the Interest Payment Date ending the
previous Interest Period and end on the June 30, September 30,
December 31 or March 31 next occurring three or six months
thereafter, as the case may be, subject to clauses (ii), (iii)
and (iv) of this definition.

(ii) Subject to clause (iv) of this definition, all
Borrowings with respect to Tranche B for which Interest Periods
end on the same Interest Payment Date shall be consolidated so
that all subsequent elections of Interest Periods for such
Borrowings of such Tranche shall apply to all such Borrowings so
consolidated.

(iii) If any Interest Period would otherwise end on a
day which is not a Business Day, such Interest Period shall end
on the immediately preceding Business Day.

(iv) If the Borrower wishes to elect an Interest Period of
six months for Borrowings of Tranche B and if the aggregate
outstanding principal amount of the Borrowings of Tranche B for
which a Notice of Interest Period is then to be given is greater
than the amount of the repayment installment of such Tranche due
to the Tranche B Lenders on a Maturity Date approximately three
months following the date of the proposed election, then, for
purposes of calculating interest, such Borrowings shall be
divided and henceforth treated as two separate Borrowings of such
Tranche (such division to be pro rata as to each Tranche B
Lender's Advances), one of an amount equal to the amount of the
repayment installment of such Tranche due to the Tranche B
Lenders on such Maturity Date (the Interest Period for which will
end on such Maturity Date) and the other of an amount equal to
the remainder of such-consolidated Borrowings of such Tranche.
The Borrower's election of a six month Interest Period shall only
apply to such remainder of the consolidated Borrowings of such
Tranche.

(v) Notwithstanding the foregoing provisions of this
definition, no election of one or more Interest Periods may be
made which would cause the aggregate number of all Interest
Periods then in effect for both Tranches to exceed 10.

"Invoice Settlement Agreements" means the Invoice Settlement
Agreement for 1973 LNG Sales Contract dated as of March 31, 1987
between Pertamina and the buyers under the 1973 LNG Sales
Contract, as heretofore and hereafter amended, including any
extension or renewal thereof, and the Invoice Settlement
Agreement for 1981 LNG Sales Contract dated as of March 31, 1987
between Pertamina and the buyers under the 1981 LNG Sales
Contract, as heretofore and hereafter amended, including any
extension or renewal thereof.

"Japanese Business Day" means any day on which commercial
banks are not authorized or required to close in Tokyo.

"KCO General Account" has the meaning set forth in the
Bontang I Trust Agreement.

"Korean Carry-over Quantities" has the meaning set forth in
the Korean Quantities Agreement.

"Korean Quantities Agreement" means the Tripartite Agreement
dated January 29, 1988, effective as of the 12th day of August,
1983, among the Producers and Mobil Oil Indonesia Inc., as
heretofore and hereafter amended, including any extension or
renewal thereof.

"Korean Quantities Supplemental Memorandum" means the
Supplemental Memorandum dated January 29, 1988, among the
Producers relating to the Korean Carry-Over Quantities, as
heretofore and hereafter amended.

"Korean Sales Contract" means the LNG Sales and Purchase
Contract (Arun III Trade) between Pertamina and Korea Electric
Power Corporation, dated August 12, 1983, as assigned to Korea
Gas Corporation pursuant to an agreement dated August 13, 1984,
as heretofore and hereafter amended, including any extension or
renewal thereof.

"Lead Managers" means the financial institutions named under
the caption "Lead Managers" on the signature pages hereof.

"Legal Requirements" means all applicable (i) laws, rules,
regulations, ordinances, orders, decrees, permits, licenses,
authorizations, directions and requirements of all governments
and governmental departments, commissions, boards, authorities
and agencies, (ii) court and governmental administrative agency
judgments and injunctions, (iii) arbitral awards and (iv)
requirements of courts and arbitral tribunals.

"Lenders" means the Tranche A Lender and each of the Tranche
B Lenders.

"Lending Office" means (i) initially for each Lender its
office or branch located as of the date hereof at its address set
forth on the signature pages hereof and (ii) subsequently for
each Lender such other office or branch of such Lender as such
Lender may designate by notice in writing to the Borrower and the
Agent as the office or branch from or at which such Lender's
Advances with respect to a Tranche will thereafter be made or
maintained and for the account of which all payments of principal
of and interest on the relevant Notes and all other payments to
such lender under this Agreement will thereafter be made;
provided that the designation of a new Lending Office shall be
subject to the conditions stated in Section 10.4 hereof.

"Letter Agreement" has the meaning set forth in Section
2.8(b) hereof.

"LIBOR" has the meaning set forth in Section 2.5 hereof.

"LNG" has the meaning set forth in Article 1 of the
Processing Agreement.

"LNG Sales Contract" means the Badak III LNG Sales Contract,
dated as of March 19, 1987, between Pertamina and the Buyer, as
heretofore and hereafter amended, including any extension or
renewal thereof.

"Long Term Sales Contracts" means contracts entered into by
Pertamina to sell two or more cargoes of LNG from the Bontang
Plant, as thereafter amended, including any extension or renewal
thereof. Long Term Sales Contracts do not include the LNG Sales
Contract, the Chubu Sales Contract, the Korean Quantities
Agreement, the Korean Sales Contract, the 1981 LNG Sales
Contract, the 1973 LNG Sales Contract or the Invoice Settlement
Agreements.

"Majority Lenders" means the Tranche A Lender and the
Majority Tranche B Lenders.

"Majority Tranche B Lenders" means at any time Tranche B
Lenders holding in excess of 66-2/3% of the aggregate unpaid
principal amount of the Advances of Tranche B, or if no such
Advances are at the time outstanding, Tranche B Lenders having in
excess of 66-2/3% of the aggregate amount of the Commitments with
respect to Tranche B.

"Maturity Date" means the first March 31, June 30, September
30 or December 31 to occur at least three months following the
last day of the Availability Period and, thereafter, each March
31, June 30, September 30 and December 31 occurring three months
following the last of the same to occur, each of which shall be
an Interest Payment Date; provided, however, that if any such
date is not a Business Day, such Maturity Date shall be the
immediately preceding Business Day.

"1973 LNG Sales Contract" means the LNG Sales Contract,
dated as of December 3, 1973, between Pertamina and The Chubu
Electric Power Co., Inc., The Kansai Electric Power Co., Inc.,
Kyushu Electric Power Co., Inc., Nippon Steel Corporation and
Osaka Gas Company, Ltd. as heretofore and hereafter amended,
including any extension on renewal thereof, as supplemented by
the Memorandum of Agreement between Pertamina and The Chubu
Electric Power Co., Inc., The Kansai Electric Power Co., Inc. and
Kyushu Electric Power Co., Inc., dated as of January 1, 1983, as
heretofore and hereafter amended, including any extension or
renewal thereof.

"1981 LNG Sales Contract" means the LNG Sales Contract dated
as of April 14, 1981, between Pertamina and The Chubu Electric
Power Co., Inc., The Kansai Electric Power
Co., Inc., Osaka Gas Company, Ltd. and Toho Gas Company, Ltd., as
heretofore and hereafter amended, including any extension or
renewal thereof.

"Note" means any one of the Tranche A Note or Tranche B
Notes provided for in Section 2.9 hereof.

"Notice of Borrowing" means a notice from the Borrower to
each of the Tranche A Lender and the Agent substantially in the
form of Exhibit A hereto.

"Notice of Deferral" means a notice from the Borrower to
each of the Tranche A Lender and the Agent substantially in the
form of Exhibit B-1 hereto.

"Notice of Interest Period" means a notice from the Borrower
to the Agent substantially in the form of Exhibit B-2 hereto.

"Notice of Start-up" means the notice that Start-up has
occurred given by Pertamina to the Tranche A Lender, the Agent
and the Borrower.

"Overdue Tranche A Amounts" means any overdue principal of
the Tranche A Note and any other overdue amounts owing pursuant
to this Agreement with respect to Tranche A and the Tranche A
Note.

"Pari Passu Swap Indebtedness" has the meaning set forth in
Section 6.4 hereof.

"Payments" has the meaning set forth in Section 3.3 hereof.

"Permitted Amounts" means, with respect to each Contingent
Support Trust Agreement, (i) all freight, charterhire and costs
payable by Pertamina for transport of LNG pursuant to the
transportation agreement, if any, relating to sales of LNG giving
rise to any Source of Contingent Support which will constitute
Contingent Support under such Contingent Support Trust Agreement,
(ii) processing charges payable with respect to such LNG under
the Processing Agreement, (iii) Permitted Marketing Fees, if any,
with respect to such Source of Contingent Support, (iv) any other
charges with respect to the sale or delivery of LNG giving rise
to the Source of Contingent Support, and any fees and expenses of
the trustee under such Contingent Support Trust Agreement, in an
aggregate amount not to exceed $25,000 per calendar quarter, (v)
in the case of the Bontang Excess Sales Trust Agreement only, an
Approved Level of Working Capital (as defined therein) not to
exceed $50,000 at any one time, and (vi) in the case of the
Bontang I Trust Agreement only, amounts required to be set aside
and paid pursuant to Article 2 and Sections 4.1 and 14.2 of the
Bontang I Trust Agreement; provided, however, Permitted Amounts
shall not include amounts referred to in clauses (i), (ii) or
(iii) of this definition with respect to amounts received by the
Bontang Excess Sales Trustee under the Bontang Excess Sales Trust
Agreement from the Trustee under the Bontang I Trust Agreement
relating to the Korean CarryOver Quantities.

"Permitted Marketing Fees" means, with respect to Source of
Contingent Support arising under the Chubu Sales Contract or any
Future or Special Long Term Sales Contract, fees payable for
marketing services incurred in connection with LNG sold under
such Contract, but only if Pertamina shall have furnished the
Tranche A Lender and the Agent promptly upon receipt copies of
all agreements and invoices relating to such fees.

"Person" means and includes any individual, corporation,
juridical entity, association, statutory body, partnership, joint
venture, trust, estate, unincorporated organization or
government, state or any political subdivision, instrumentality,
agency or authority thereof.

"Pertamina" means Perusahaan Pertambangan Minyak Dan Gas
Bumi Negara, a State Enterprise of the Republic of Indonesia,
which is wholly owned by the Republic of Indonesia, and its
successors and assigns permitted under the Producers Agreement.

"Plant Use Agreement" means the Agreement for Use and
operation of Plant dated as of July 1, 1983 between Pertamina and
P.T. Badak, as heretofore and hereafter amended.

"Processing Agreement" means the Amended and Restated
Bontang Processing Agreement, dated as of the date hereof, among
the Producers on the one hand and P.T. Badak on the other, as
hereafter amended.

"Producers" means Pertamina, Roy M. Huffington, Inc.,
Huffington Corporation, Virginia International Company, Virginia
Indonesia Company, Ultramar Indonesia Limited, Union Texas East
Kalimantan Limited, Universe Tankships, Inc., Total Indonesie,
Unocal Indonesia, Ltd., and Indonesia Petroleum, Ltd. and Persons
succeeding to their interests in the manner permitted by Section
6.3 of the Producers Agreement.

"Producers Agreement" means the Bontang III Producers
Agreement of even date herewith among the Producers, the Tranche
A Lender, the Agent and the Tranche B Lenders, as hereafter
amended.

"P.T. Badak" means P.T. Badak Natural Gas Liquefaction
Company, a corporation organized under the laws of the Republic
of Indonesia.

"Quarterly Debt Service" has the meaning set forth in
Section 9.1 hereof.

"Receiving Facilities" means "Receiving Facility" as set
forth in Article 1 of the LNG Sales Contract.

"Reference Banks" means The Industrial Bank of Japan,
Limited, London Branch, Morgan Guaranty Trust Company of New
York, London Branch, and The Bank of Tokyo, Ltd., London Branch.

"Regular Reserve Account" has the meaning set forth in
Article 1 of the Trust Agreement.

"Related Amounts" means, with respect to the 1973 Sales
Contract (insofar as they relate to the Korean CarryOver
Quantities), the Chubu Sales Contract, Future Spot Sales, Future
Long Term Sales Contracts, Special Long Term Sales Contracts and
Special Spot Sales, as relevant, amounts payable to Pertamina
relating to such contracts or shipments of LNG thereunder that
are comparable to amounts described in clauses (ii), (iii), (iv)
and (v) in the definition of Gross Invoice Amount contained
herein.

"Reserve Account" has the meaning set forth in Article 1 of
the Trust Agreement.

"Reserves" has the meaning set-forth in Section 2.6 hereof.

"Responsible Officer of the Borrower" means the chairman and
vice chairman of the board of directors, the chairman of the
executive committee of the board of directors, the president, any
executive vice president, any senior vice president or any vice
president of Continental Bank International.

"Second Contingent Support" means amounts from time to time
held in the Special Spot Contingent Support Accounts under the
Bontang Excess Sales Trust Agreement, which amounts are 100% of
(i) the gross invoice amount payable under any Special Spot
Sales, on a cargo by cargo basis, and received by the Bontang
Excess Sales Trustee under the Bontang Excess Sales Trust
Agreement, less any relevant Permitted Amounts, plus (ii) any
relevant Related Amounts.

"Second Contingent Support Period" means each of (i) the
period referred to in clause (ii) of the definition of First
Contingent Support Period contained herein and (ii) the periods
referred to in clauses (ii) and (iii) of the definition of Third
Contingent Support contained herein.

"Side Letter" means the Side Letter to the LNG Sales
Contract, dated March 19, 1987, from Pertamina to the Buyer, as
heretofore and hereafter amended.

"Source of Contingent Support" means any amounts payable
pursuant to a Contingent Support Agreement and any Related
Amounts relating thereto that will constitute Contingent Support
and, without duplication, any amounts payable pursuant to the
Bontang I Trust Agreement that will constitute Contingent
Support.

"Source of Debt Service" means

(I) in respect of each amount payable to the Borrower for
LNG purchased, or for LNG required to be purchased but not taken,
under the LNG Sales Contract, or payable to the Borrower pursuant
to the Disputed Force Majeure Account Agreement, the Supply
Agreements or the Transportation Agreement or otherwise pursuant
to the LNG Sales Contract (without duplication), the portion, if
any, of the amount so payable equal to 50% of the Gross Invoice
Amount payable (i) under each invoice rendered with respect to
each cargo purchased, or in the case of LNG required to be
purchased but not taken under each invoice rendered with respect
to the same quantity not taken, and (ii) otherwise in respect of
each cargo, plus 50% of all indemnities and additional amounts
payable by the Buyer under the LNG Sales Contract, without any
reduction or set-off from any such amounts; provided, however,
that if the Borrower is authorized and requested by the Producers
(which authorization and request may be given pursuant to Section
1.16(b) of the Producers Agreement) to execute and deliver an
agreement providing for the amendment of this definition of
Source of Debt Service, and if the Tranche A Lender and the Agent
on behalf of the Tranche B Lenders also execute and deliver such
agreement, this definition of Source of Debt Service shall be
deemed amended for all purposes of this Agreement as set forth in
such agreement; and

(II) in respect of any period the aggregate amount of the
Source of Debt Service payable during such period.

"Special Long Term Sales Contracts" means Long Term Sales
Contracts entered into at any time during any Third Contingent
Support Period.

"Special Long Term Sales Trust Agreement" means any Special
Long Term Sales Trustee and Paying Agent Agreement in form and
substance satisfactory to the Majority Lenders entered into prior
to the time the first payments are due from the buyer or buyers
under the related Special Long Term Sales Contract, which shall
provide for the trustee thereunder to receive amounts payable
under such Special Long Term Sales Contract and any relevant
Related Amounts and provide that, upon notice from Pertamina as
provided in section 1.18 hereof, amounts of Third Contingent
Support held pursuant thereto shall be payable to the Borrower
under the Trust Agreement.

"Special Spot Contingent Support Accounts" has the meaning
set forth in Article 1 of the Bontang Excess Sales Trust
Agreement.

"Special Spot Sales" means Spot Sales, the proceeds of which
are payable at any time during any Second Contingent Support
Period.

"Spot Sale" means any sale made by Pertamina of a single
cargo of LNG to be supplied from the Bontang Plant. Spot Sales
do not include any sales under the LNG Sales Contract, the Chubu
Sales Contract, the Korean Quantities Agreement, the Korean Sales
Contract, the 1981 LNG Sales Contract, the 1973 LNG Sales
Contract, any Long Term Sales Contract or the Invoice Settlement
Agreements.

"Start-up" means the first date on which the Buyer is able
to receive and Pertamina is able to deliver LNG at the Receiving
Facilities on a continuing basis so as to be in a position to
perform their respective obligations to purchase and receive and
to sell and deliver LNG under the LNG Sales Contract.

"Subordinated Indebtedness" has the meaning set forth in
Section 6.4 hereof.

"Supply Agreements" means:

(i) Supply Agreement for Badak III LNG Sales Contract,
dated October 19, 1987, by and between Pertamina, on the one
hand, and Total Indonesie and Indonesia Petroleum,
Ltd., on the other hand, as heretofore and hereafter amended;

(ii) Badak III LNG Sales Contract Supply Agreement, dated
October 19, 1987, by and between Pertamina, on the one hand, and
Roy M. Huffington, Inc., Huffington Corporation, Virginia
International Company, Virginia Indonesia Company, Ultramar
Indonesia Limited, Union Texas East Kalimantan Limited and
Universe Tankships, Inc., on the other hand, as heretofore and
hereafter amended; and

(iii) Supply Agreement for Badak III Sales Contract
(Attaka Field), dated October 19, 1987, by and between Pertamina,
on the one hand, and Unocal Indonesia, Ltd. and Indonesia
Petroleum, Ltd., on the other hand, as heretofore and hereafter
amended.

"Taxes" means any present or future taxes, levies, imposts,
duties, fees, assessments, deductions, withholdings or other
charges of whatsoever nature, that may now or hereafter be
imposed or asserted by any jurisdiction or any political
subdivision thereof or any taxing authority therein and all
interest, penalties or similar liabilities with respect thereto.

"Third Contingent Support" means amounts from time to time
held under all Special Long Term Sales Trust Agreements, which
amounts, with respect to each Special Long Term Sales Trust
Agreement, are such percentage of (i) the gross invoice amount
payable under the Special Long Term Sales Contract to which such
Special Long Term Sales Trust Agreement relates, on a cargo by
cargo basis, and received by the trustee under such Special Long
Term Sales Trust Agreement, less any relevant Permitted Amounts
plus (ii) any relevant Related Amounts, as shall result in an
initial Debt Coverage Ratio of 200% as of the date on which the
first payments are due from the buyer or buyers under such
Special Long Term Sales Contract, or if such percentage of such
amounts would exceed 100%, then (x) 100% of the amount payable,
on a cargo by cargo basis, and received by such trustee, less any
relevant Permitted Amounts plus (y) any relevant Related Amounts.

"Third Contingent Support Period" means each of (i) if
Start-up does not occur on or before September 30, 1991, the
period commencing on October 1, 1991 and ending on the date of
Start-up, (ii) if the LNG Sales Contract is terminated or
repudiated (whether by notice or in fact) by the Buyer, the
period after such termination or repudiation and (iii) if any
Event of Force Majeure under Section 15.1 of the LNG Sales
Contract excuses performance by the Buyer thereunder for 42
consecutive months, the period commencing at the end of such
42-month period and continuing for so long as such performance by
the Buyer is excused as a result of such Event of Force Majeure.

"Train E" means the additional gas liquefaction and
processing facility known as Train E and facilities related to or
used in connection therewith, to be completed in accordance with
the Development Plan.

"Tranche" means Tranche A or Tranche B and "Tranches" means
Tranche A and Tranche B.

"Tranche A" means Advances of the Tranche A Lender in an
aggregate maximum principal amount not exceeding $189,600,000.00.

"Tranche A Lender" means Train-E Finance Co., Ltd. and its
successors and assigns hereunder.

"Tranche A Note" has the meaning set forth in Section 2.9
hereof.

"Tranche B" means Advances of the Tranche B Lenders in an
aggregate maximum principal amount not exceeding $126,400,000.00.

"Tranche B Lender" means each of the banks and other
financial institutions named under the caption "Tranche B
Lenders" on the signature pages hereof and their respective
successors and assigns.

"Tranche B Note" has the meaning set forth in Section 2.9
hereof.

"Transportation Agreement" means the LNG Vessel Time Charter
Party Badak III (New Build) Hull No. 2011 dated as of May 1, 1987
among Cometco Shipping Inc., PT Humpuss and Pertamina, as
heretofore and hereafter amended.

"Trust Agreement" means the Bontang III Trustee and Paying
Agent Agreement among Continental Bank International, as Trustee,
and the Producers, dated as of the date hereof, as hereafter
amended.

SECTION 2. THE ADVANCES

2.1 The Commitments. Upon the terms and subject to the
conditions set forth in this Agreement, the Tranche A Lender
agrees to make Advances to the Borrower of Tranche A, and each
Tranche B Lender severally, and not jointly or jointly and
severally, agrees to make Advances to the Borrower of Tranche B,
in each case in Dollars through its Lending Office. The Advances
shall be made by each Lender on the Borrowing Dates and in the
amounts provided for in Section 2.2 hereof, but in no event in an
amount that exceeds the aggregate amount of its Commitment;
provided that such Commitment has not theretofore been terminated
or canceled pursuant to Section 3.4(a) hereof or Section 3.7
hereof or otherwise.

2.2 Manner of Borrowing.

(a) The Borrower shall give to each of the Tranche A
Lender and the Agent, in each case not later than noon, New York
time, on or prior to the eleventh Business Day preceding each
Borrowing Date, a Notice of Borrowing, in writing or by telex,
which shall be in accordance with the Drawdown Schedule; provided
that notice to the Tranche A Lender with respect to each
Borrowing Date shall be deemed timely if received by the Tranche
A Lender not later than noon Tokyo time on the date ten Business
Days preceding such Borrowing Date. The amount to be drawn down
on any Borrowing Date shall be $1,000,000.00 or an integral
multiple thereof. The total amount to be drawn down on any
Borrowing Date shall be apportioned 60% to the Tranche A Lender
and 40% to the Tranche B Lenders, and the amount apportioned to
the Tranche B Lenders shall be apportioned by the Agent on a pro
rata basis among the outstanding Commitments of the Tranche B
Lenders. A Notice of Borrowing, once received by the Tranche A
Lender and the Agent, shall not be revocable by the Borrower.

(b) On or prior to the last day of the Availability
Period, the Borrower shall have the right to elect to borrow from
the Lenders on each relevant Borrowing Date, in addition to the
amounts set forth on the Drawdown Schedule, an amount equal to
(i) the amount of interest, fees, expenses, taxes and other
amounts payable by the Borrower pursuant to Sections 2.3, 2.7,
2.8, 3.3, 3.4(b) and 10.6 hereof, plus (ii) the difference
between such amount and the next highest amount that is
$1,000,000.00 or an integral multiple thereof. Such election
shall be exercised by including the amount to be borrowed in the
Notice of Borrowing given pursuant to Section 2.2(a) hereof. The
amount of such Borrowings shall thereafter be added to the
outstanding principal of the Advances and shall bear interest as
specified in Sections 2.3, 2.4, 2.5, 2.6 and 2.7 hereof. Except
as provided in Section 3.7 hereof, no changes to the Drawdown
Schedule will be permitted, except changes that (i) are requested
in a written notice delivered to both the Tranche A Lender and
the Agent seeking an alteration of $1,000,000.00 or an integral
multiple of $1,000,000.00 in the Drawdown Schedule, (ii) do not
increase the amount of the Commitments and (iii) are approved in
writing by the Tranche A Lender (and notified to the Borrower and
the Agent). If the Commitments shall be canceled in part, or
other such changes to the Drawdown Schedule are made, the Tranche
A Lender and the Agent shall promptly deliver to the Borrower a
revised Drawdown Schedule appropriately reflecting such changes.
The Borrower shall promptly deliver to the Tranche A Lender and
the Agent pursuant to Section 3.3(f) of the Trust Agreement a
notice either confirming that it agrees with the revised Drawdown
Schedule or indicating that it does not agree and specifying the
reasons therefor. Upon confirmation by the Borrower that it
agrees with the revised Drawdown Schedule, such revised Drawdown
Schedule shall be effective.

(c) With respect to each Notice of Borrowing received
by the Tranche A Lender, upon and subject to the terms and
conditions of this Agreement, before 1:00 p.m. New York time on
the Borrowing Date identified therein the Tranche A Lender shall
make available in Dollars to the Borrower to the account in New
York City specified with respect to Tranche A in such Notice of
Borrowing on such Borrowing Date the amount of funds requested of
the Tranche A Lender by the Borrower in such Notice of Borrowing
in same day settlement funds by credit of Federal or other
immediately available funds.

(d) Upon receipt of a Notice of Borrowing, the Agent
shall forthwith notify each Tranche B Lender of the Borrowing
Date identified therein. Before 11:00 a.m. New York time on such
Borrowing Date each Tranche B Lender will make available in
Dollars the amount of such Tranche B Lender's Advance to be made
on such Borrowing Date in same day settlement funds by credit of
Federal or other immediately available funds satisfactory to the
Agent to the account of the Agent (account no. 631-21-359) at
Morgan Guaranty Trust Company of New York located at 23 Wall
Street, New York, New York 10005, U.S.A. for the account of the
Borrower or at such other office or bank in New York, New York or
elsewhere as the Agent may from time to time designate by telex
(to be confirmed by letter) to the Tranche B Lenders. Upon and
subject to the terms and conditions of this Agreement, before
1:00 p.m. New York time on such Borrowing Date the Agent shall
make available to the Borrower to the account in New York City as
shall have been specified with respect to Tranche B by the
Borrower in such Notice of Borrowing on such Borrowing Date the
funds made available to the Agent pursuant to the next preceding
sentence in the same funds as received by the Agent.

(e) The failure of a Lender to make an Advance to be
made by it on the date specified therefor shall not relieve any
other Lender of its obligation to make its Advance hereunder on
such date, and no Lender shall be responsible for the failure of
any other Lender to make an Advance to be made by such other
Lender on the date specified therefor. Unless the Agent shall
have been notified by a Tranche B Lender prior to a Borrowing
Date (which notice shall be effective only upon receipt) that
such Tranche B Lender does not intend to make available to it
such Tranche B Lender's Advance with respect to Tranche B to be
made on such date, the Agent may assume that such Tranche B
Lender has made such Tranche B Lender's Advance available to it
on such date, and the Agent may, in reliance upon such
assumption, make available to the Borrower a corresponding
amount. If the Tranche B Lender's Advance is not in fact made
available to the Agent by such Tranche B Lender, the Agent shall
be entitled to recover such amount either on demand from such
Tranche B Lender or on demand and in accordance with the
provisions of Section 3.9 hereof from the Borrower together with
interest thereon at a rate per annum representing the interest
cost to the Agent (as determined by the Agent using reasonable
efforts to minimize such cost) of funding the amount in question
until reimbursement thereof to the Agent; provided that to the
extent such amount is recovered from the Borrower, interest paid
thereon by the Borrower shall not exceed the rate or rates per
annum then applicable to the Advances made with respect to
Tranche B.

2.3 Interest. The Borrower shall pay interest on the
unpaid principal amount of all Advances outstanding from time to
time at the applicable interest rates determined in accordance
with Section 2.5 or 2.6 hereof, as the case may be, with respect
to each Interest Period. Such interest payable with respect to
each Interest Period shall be paid on the Interest Payment Date
at the end of such Interest Period. Interest on the Advances
shall be calculated from and including the relevant Borrowing
Date up to but not including the date of actual repayment and
shall be computed on the basis of a year of 365 days with respect
to Tranche A (other than any Overdue Tranche A Amounts and any
Deferred Portion thereof) and a year of 360 days with respect to
Tranche B (including any Deferred Portion thereof), any Deferred
Portion of Tranche A and any Overdue Tranche A Amounts, and shall
be payable in each case for the actual number of days elapsed.

2.4 Election of Interest Periods for Tranche B. The
Borrower shall have the option to elect an Interest Period of
three months or six months to apply to the entire amount of the
Borrowings outstanding with respect to Tranche B for which an
Interest Period is then to be determined, except (i) for the
initial Interest Period referred to in clause (i) of the
definition of Interest Period; (ii) for each other Interest
Period during the Availability Period, each of which shall be a
three-month Interest Period; (iii) with respect to any amounts of
principal coming due in approximately three months, to which a
three-month Interest Period shall apply as provided in clause
(iv) of the definition of Interest Period; and (iv) with respect
to any Deferred Portion of such Tranche, to which a three-month
Interest Period shall apply. Such option shall be exercised by
delivery to the Agent of a written or telexed Notice of Interest
Period and the Agent shall promptly notify the Tranche B Lenders
of the Interest Period so elected. If a Notice of Interest
Period in respect of any Interest Period is not received by the
Agent at least five Business Days prior to the commencement of
such Interest Period, the Borrower shall be deemed to have
elected an Interest Period of three months' duration.

2.5 Interest Rates.

(a) The interest rate applicable to Tranche A (other
than any Overdue Tranche A Amounts and any Deferred Portion of
Tranche A) for each Interest Period shall be 11-1/2% per annum.

(b) On the date which is two days, during which banks
are open for dealings in interbank Dollar deposits in London,
prior to the commencement of each Interest Period, the Agent
shall fix the interest rate for the Advances with respect to
Tranche B and any Deferred Portion of Tranche A or Tranche B to
be outstanding with respect to and during such Interest Period at
the rate per annum equal to the sum of the Applicable Margin plus
the London Interbank Offered Rate (the London Interbank Offered
Rate is referred to as "LIBOR"). LIBOR for each such Interest
Period shall be the average (rounded upward, if necessary, to the
nearest 1/16 of 1%) of the respective rates per annum at which
deposits in Dollars are offered to each of the Reference Banks in
the London interbank market as of approximately 11:00 a.m.,
London time, on such date for a period comparable to such
Interest Period and in an amount approximately equal to one-third
(1/3) of the aggregate amount of the Advances with respect to
Tranche B and any Deferred Portion of Tranche A or Tranche B to
be outstanding during such Interest Period. The Agent, whose
determination shall be conclusive in the absence of manifest
error, shall determine the interest rate on the above basis as
soon as practicable thereafter, New York time. If for any reason
no quotation is furnished by one or more of the Reference Banks
to the Agent, the Agent shall determine such interest rate on the
basis of the quotations furnished by the remaining Reference
Banks or Reference Bank.

2.6 Alternative Interest Rates. If, on any date on which
an interest rate is to be fixed pursuant to Section 2.5(b)
hereof, (i) none of the Reference Banks is able to furnish a
quotation to the Agent for purposes of determining an interest
rate pursuant to Section 2.5(b) hereof or (ii) the Agent is
notified by all the Reference Banks that deposits in Dollars in
an amount equal to the amount of the applicable Advances and any
Deferred Portions, to which such Interest Period relates, during
such Interest Period are not being offered to the Reference Banks
in the London interbank market or (iii) the Agent is notified by
the Majority Tranche B Lenders, or the Tranche A Lender with
respect to any Deferred Portion of Tranche A with respect to
which the Tranche A Lender's cost of funding includes costs
associated with Reserves (as defined below), that the rates at
which Dollar deposits are being offered to the Reference Banks in
the London interbank market plus all costs associated with
reserves, special deposits, deposit insurance or similar
requirements to be maintained or paid in accordance with the
regulations or other requirements of the Federal Reserve System,
the Federal Deposit Insurance Corporation or any other
department, agency or instrumentality of the United States of
America or any state thereof (collectively, "Reserves") in effect
on the date of this Agreement do not adequately reflect the cost
to the relevant Lenders of making or maintaining for the next
succeeding Interest Period their respective Advances with respect
to Tranche B, any Deferred Portion of Tranche B and any Deferred
Portion of Tranche A with respect to which the Tranche A Lender's
cost of funding includes costs associated with Reserves, then the
Agent shall promptly give notice of such fact to the Borrower and
the relevant Lenders. During the 30 days next succeeding the
giving of such notice, the Borrower and the relevant Lenders
shall negotiate in good faith in order to arrive at a mutually
satisfactory interest rate which shall be applicable to such
Advances and Deferred Portions to be outstanding during such
Interest Period instead of LIBOR. If within such 30-day period
the Borrower and the relevant Lenders agree in writing upon an
alternative interest rate, such rate shall be substituted for
LIBOR and shall be effective with respect to the relevant amounts
from the commencement of such Interest Period. The Borrower
shall pay to the relevant Lenders interest on such Advances and
Deferred Portions calculated based upon such alternative interest
rate plus the Applicable Margin during such Interest Period. If
the Borrower and the relevant Lenders fail to agree upon such an
alternative interest rate within such 30-day period, the interest
rate during such Interest Period, applicable to each relevant
Tranche B Lender's Advance and each relevant Lender's Deferred
Portion and effective from the commencement of such Interest
Period shall be such rate as such Lender shall determine (in a
certificate delivered by such Lender to the Agent setting forth
the basis of the computation of such rate, which certificate
shall in the absence of manifest error be conclusive and binding
on the Borrower) to be necessary to compensate each such Lender
for its actual out-of-pocket cost, and costs associated with such
Reserves (determined in good faith using reasonable efforts to
minimize the interest cost to the Borrower, rounded upward, if
necessary, to the nearest 1/16 of 1% and disregarding for such
purposes all costs of Reserves in effect on the date of this
Agreement), as of the commencement of such Interest Period, of
funds for such Interest Period in an amount equal to the
aggregate principal amount of each relevant Tranche B Lender's
Advances and each relevant Lender's Deferred Portion to which
such Interest Period relates plus the Applicable Margin. The
Agent shall notify the Borrower of such determination as promptly
as practicable. After the Agent shall have notified the Borrower
of such determination and during the period such interest rate
continues to be applicable, the Borrower may elect to prepay any
one or more of the relevant Tranche B Notes or the Deferred
Portion of the Tranche A Note without premium or penalty (except
as provided in Sections 2.7(c) hereof) in accordance with the
provisions of Section 3.5 hereof.

2.7 Interest Rate on Overdue Amounts; Other Indemnities.

(a) The Borrower shall pay interest on overdue
principal of the Tranche A Note or any Tranche B Note and, so far
as may be lawful, on any other overdue amount owing pursuant to
this Agreement, the Notes and the Letter Agreement, from and
including, the date the payment thereof was due to, but not
including, the day of actual payment, at a rate per annum which
shall be 2% over the average (rounded upward, if necessary, to
the nearest 1/16 of 1%) of the respective rates at which deposits
in Dollars with maturities of longer than six days and shorter
than six months, as the Agent may elect, are offered to each of
the Reference Banks in the London interbank market as of
approximately 11:00 a.m., London time, on the day such rate of
interest is determined in an amount equal to the aggregate amount
of such overdue payment due to the Lenders. If for any of the
reasons specified in clauses (i), (ii) or (iii) of Section 2.6
hereof an alternative interest rate would be determined pursuant
thereto, then such alternative interest rate shall be determined
and the Borrower shall pay to the relevant Lenders interest on
such overdue principal or other amounts at a rate per annum that
shall be 2% over such alternative interest rate without the
addition of the Applicable Margin.

(b) To the extent permitted by applicable law, without
prejudice to the other rights of the Tranche A Lender under
Sections 2.7(a), 2.7(c) and 10.6(b) hereof, the Borrower shall
promptly pay to the Tranche A Lender in the event of any
prepayment of any Advance, or any Event of Default resulting in
acceleration, an amount in each case calculated in accordance
with the following formula:

The amount due from the Borrower shall be X.

X = X1 + the Dollar equivalent determined by the

Tranche A Lender of X2

X1 = NPV1 of E (P1 x 1/4 x e1)
X2 = NPV2 of E (P2 x 1/4 x e2)

NPV1 means the net present value determined by the Tranche A
Lender by discounting the relevant amount of
interest for the periods from and including the
date of prepayment or acceleration, as the case
may be, to the date the relevant amount of
interest was originally scheduled to be due
pursuant to this Agreement (the "Periods"),
utilizing a discount rate per annum equal to the
effective yield to maturity on United States
Treasury securities purchasable on the date of
prepayment or acceleration, as the case may be,
and with maturities comparable to the relevant
Periods (but adjusting such yield from a
semi-annual to a quarterly basis) (such yield so
determined = a%).

P1 means each portion of the amount prepaid or accelerated, as
the case may be, which would have been outstanding
during the relevant Period had no such prepayment or
acceleration occurred.

e1 means the excess of 11-1/2% over a% (other than those
intended to be covered by the provisions of Section
2.7(b) hereof).

NPV2 means the net present value determined by the Tranche A
Lender by discounting the relevant amounts of
interest for the relevant Periods, utilizing a
discount rate per annum equal to the effective
yield to maturity on Japanese government bonds
purchasable on the date of prepayment or
acceleration, as the case may be, and with
maturities comparable to the relevant Periods (but
adjusting such yield to a quarterly basis).

P2 means an amount in Japanese yen determined by the Tranche A
Lender to be equivalent to P1 and calculated using the
weighted average rates of exchange used for conversion
of Japanese yen into Dollars for each Advance.

e2 means the excess of b% over 4.6%.

b% means the Japanese long term prime rate per annum prevailing
on the date of prepayment or acceleration, as the case
may be, plus 0.5%.

(c) To the extent permitted by applicable law, without
prejudice to the other rights of the Lenders under Sections
2.7(a), 2.7(b) and 10.6(b) hereof, the Borrower shall indemnify,
without duplication, each such Lender against, hold each such
Lender harmless from and promptly pay to the Tranche A Lender or
the Agent on behalf of each Tranche B Lender, as the case may be,
all out-of-pocket costs, losses (excluding loss of profit) or
expenses which each such Lender may sustain or incur (other than
the items to be indemnified for as contemplated by the provisions
of Section 2.7(b) hereof) as a consequence of (i) any prepayment
of any Advance with respect to Tranche B (including any Deferred
Portion thereof) or any Deferred Portion of Tranche A or (ii) the
failure by the Borrower to pay when due the principal of or
interest on any Note or any other amount payable under this
Agreement or the Letter Agreement, including but not limited to
funding costs and any amounts payable by such Lender in order to
maintain its Advances with respect to Tranche B (including any
Deferred Portion thereof), and any Deferred Portion of Tranche A
(until the end of the relevant Interest Period in the event of
prepayment or until payment of all amounts then due by
acceleration or otherwise in the event of a failure to pay), but
excluding any such costs, losses or expenses resulting from
prepayment on an Interest Payment Date of amounts for which an
Interest Period ends on such Interest Payment Date as permitted
in accordance with Section 3.6 hereof. In each case involving a
prepayment (other than a prepayment under Section 3.6 hereof for
which no costs, losses or expenses are payable), each Lender
shall act in good faith and use reasonable efforts to minimize
the costs, losses and expenses payable by the Borrower hereunder.

(d) A certificate of any Lender setting forth in
reasonable detail the basis for the determination of the amounts
necessary to indemnify such Lender pursuant to Section 2.7(b) or
(c) shall be conclusive as to the determination of such amounts
in the absence of manifest error.

2.8 Fees.

(a) The Borrower hereby agrees to pay a non-refundable
management fee in the amount specified in and otherwise in
accordance with the letter agreement between the Borrower and the
Lead Managers of even date herewith (the "Management Fee Letter
Agreement"). The allocation of such fee shall not be the
responsibility of the Borrower or the Producers.

(b) The Borrower hereby agrees to pay a non-refundable
agency fee in the amount specified in and otherwise in accordance
with the agency fee letter agreement between the Borrower and the
Agent of even date herewith (the "Agency Fee Letter Agreement"
and, collectively with the Management Fee Letter Agreement, the
"Letter Agreement").

(c) The Borrower agrees to pay to the Agent for the
account of each Tranche B Lender a commitment fee at the rate of
1/4 of 1% per annum on the daily undrawn amount of such Tranche B
Lender's Commitment during the period from and including the
Effective Date to and including the last day of the Availability
Period. Such fee will be calculated on an estimated basis on the
first day of each Interest Period in accordance with the undrawn
amount of such Tranche B Lender's Commitment on that day and
amounts in respect thereof shall be accumulated for payment and
paid in accordance with Sections 3.2 and 3.3 of the Trust
Agreement, subject to adjustment when any Advance is made
hereunder. Such commitment fee shall be calculated on the basis
of the actual number of days elapsed and a 360-day year and shall
be paid, in accordance with Section 3.2 hereof, initially on the
first March 31, June 30, September 30 or December 31 to occur
within three months after the Effective Date and thereafter
quarterly in arrears, with the final payment on the Interest
Payment Date on or immediately following the last day of the
Availability Period.

2.9 The Notes. The Tranche A Lender's Advances shall be
evidenced by a single promissory note of the Borrower (the
"Tranche A Note"), substantially in the form of Exhibit C-1
hereto, and each Tranche B Lender's Advances shall be evidenced
by a single promissory note of the Borrower (a "Tranche B Note"),
substantially in the form of Exhibit C-2 hereto, each payable to
the order of such Lender for the account of its Lending Office in
an amount equal to such Lender's Commitment or, if less, the
aggregate unpaid principal amount of such Lender's Advances.
Each Note shall be dated the date of its delivery pursuant to
Section 5.1 hereof, shall have the blanks therein appropriately
completed, and shall bear interest as specified in Sections 2.3,
2.4, 2.5, 2.6 and 2.7 hereof. Each Lender shall, and is hereby
irrevocably authorized by the Borrower to, endorse on the
schedule attached to its Note or on a continuation of such
schedule attached to and made a part of such Note an appropriate
notation evidencing the date and amount of each Advance made by
such Lender and the date and amount of each payment, prepayment
or deferral of principal made by the Borrower with respect
thereto. The failure so to record any such amount or any error
in so recording any such amount shall not, however, limit or
otherwise affect the obligations of the Borrower hereunder or
under any of the Notes to repay the principal amount of all
Advances thereunder together with all interest accruing thereon.

2.10 Repayment on Maturity Dates; Deferral.

(a) Subject to Section 2.10(b), on each Maturity Date
the Borrower shall repay with respect to each Tranche, as
provided in Section 3.1 hereof, an amount of principal equal to
the percentage of the principal amount of such Tranche
outstanding at the end of the Availability Period set forth
immediately below; provided that on the Final Maturity Date the
Borrower shall repay in full the amount of the aggregate Advances
of both Tranches then outstanding.

Percentage of
Maturity Date Advance Payable

1st to 14th 2.0% each
15th to 26th 2.5% each
27th to 40th 3.0% each

(b) If after application of amounts to the payment of
interest and other amounts payable with respect to both Trenches
on any Maturity Date other than the Final Maturity Date, the
aggregate of the amounts held in the Debt Service Account and the
Reserve Account will be insufficient on such Maturity Date to pay
all or a portion of the principal payable on such Maturity Date
with respect to both Tranches, then the Borrower may elect (by
giving not later than noon New York time on or prior to the
seventh Business Day preceding such Maturity Date a Notice of
Deferral to the Tranche A Lender and the Agent, who shall
promptly notify the Tranche B Lenders thereof; provided that
notice to the Tranche A Lender with respect to such Maturity Date
shall be deemed timely if received by the Tranche A Lender not
later than noon Tokyo time on the date six Business Days
preceding such Maturity Date) to defer to the next succeeding
Maturity Date payment of the amount of principal for which such
funds will be insufficient (pro rata for the account of each
Lender to the unpaid principal amount of the Notes) (such amount
referred to as the "Deferred Portion"), subject to the following
being true on the Maturity Date on which such insufficiency
exists:

(i) The Borrower shall not have previously deferred
payments of any principal in accordance with this Section 2.10(b)
either (x) on the four consecutive Maturity Dates immediately
preceding such Maturity Date or (y) on a total of 15 previous
Maturity Dates, whether or not consecutive;

(ii) The LNG Sales Contract shall be in full force and
effect;

(iii) No material breach or default under the LNG
Sales Contract shall exist and no notice of incipient material
breach or default shall have been given by either party thereto;

(iv) No authorization or approval required for the
continued validity and enforceability of the LNG Sales Contract
shall have been revoked or suspended; and

(v) No Event of Default shall have occurred and be
continuing or would occur with the giving of notice or the lapse
of time.

2.11 Notices. The Tranche A Lender or the Agent, as
appropriate with respect to the Tranche A Note and the Tranche B
Notes, respectively, shall promptly give the Borrower, and the
Agent shall promptly give the Tranche A Lender or the Tranche B
Lenders or each of them, as appropriate, with respect to their
Notes (i) notice of each interest rate (or interest rates)
determined pursuant to Sections 2.5, 2.6 or 2.7 hereof, the date
of each of the next Interest Payment Dates with respect to which
the interest payable is then calculable, the date of the next
Maturity Date and the amount of principal interest on the
relevant Tranche, as the case may be, the amount of commitment
fees estimated in accordance with Section 2.8(c) hereof to be
paid to the Tranche B Lenders on each of such dates and the
amount of the fee referred to in Section 2.8(b) hereof, (ii) as
otherwise provided in this Agreement, notice of other relevant
amounts due and payable hereunder, and (iii) the notices to the
Borrower by the Tranche A Lender or the Agent or both that
Section 3.2(b) of the Trust Agreement requires this Agreement to
provide for. The Tranche A Lender or the Agent, as appropriate,
shall provide the foregoing information to the Borrower at the
time and in the manner specified in Section 3.2(b) of the Trust
Agreement; provided that no failure or delay in the giving of
such notice shall discharge or excuse the Borrower from or permit
the Borrower to delay making any payment hereunder.

SECTION 3. PAYMENTS

3.1 Allocation of Amounts; Substitute Payment.

(a) Unless otherwise provided in this Agreement, all
payments by the Borrower to the Tranche A Lender and the Agent
for the account of the Tranche B Lenders shall be allocated as
provided for in Section 3.3 of the Trust Agreement. All payments
by the Borrower of commitment fees shall be made to the Agent for
the account of the Tranche B Lenders, pro rata to their
respective Commitments. All payments referred to in this Section
3.1 which are received by the Agent in the manner provided in
Section 3.2 hereof shall be deemed to have been made to the
Tranche B Lenders, and such payments to the Agent shall discharge
the Borrower from any further liability to make such payments to
such Tranche B Lenders.

(b) Notwithstanding anything to the contrary contained
in this Agreement or in any Note, but subject always to the
provisions of Section 9 hereof, if the Agent shall have notified
the Borrower that it shall have become unlawful or, in the
opinion of the Agent, impracticable for any payment to be made as
aforesaid, the Borrower shall pay to each Tranche B Lender for
its own account in such funds as are required by Section 3.2
hereof or in such other manner as may be agreed between the
Borrower and the relevant Tranche B Lender and to such account as
may be specified by the relevant Tranche B Lender to the
Borrower, the amount of the relevant Tranche B Lender's portion
of the payment in question. Each such Tranche B Lender shall
keep the Agent fully informed as to all amounts received by it
and as to all agreements made between it and the Borrower as
referred to above.

3.2 Funds of Payment.

(a) Each payment made by the Borrower under this
Agreement with respect to Tranche A or under the Tranche A Note
shall be made in Dollars and in same day settlement funds by
credit of Federal or other immediately available funds
satisfactory to the Tranche A Lender (or such funds as may from
time to time be customary for the settlement in New York City of
international banking transactions in Dollars) not later than
10:00 a.m. Tokyo time on the Japanese Business Day immediately
following the day on which such payment is due to, as applicable,
the account of the Tranche A Lender in Tokyo, Japan (Account No.
228-02-01-041735005) at The Industrial Bank of Japan, Limited,
Head Office, or to such other account of the Tranche A Lender in
Tokyo, Japan as the Tranche A Lender may at any time or from time
to time designate by written notice to the Borrower, and payment
in such manner shall fully discharge the Borrower's obligations
with respect to the amount paid.

(b) Each payment made by the Borrower under this
Agreement with respect to Tranche B, the Tranche B Notes and the
Letter Agreement shall be made in Dollars and in same day
settlement funds by credit of Federal or other immediately
available funds satisfactory to the Agent (or such funds as may
from time to time be customary for the settlement in New York
City of transactions in Dollars) not later than 11:00 a.m. New
York time on the Business Day on which such payment is due by
credit to the account of the Agent (Account No. 631-21-359) at
Morgan Guaranty Trust Company of New York, 23 Wall Street, New
York, New York 10005 U.S.A. or to such other account of the Agent
as the Agent may at any time or from time to time designate by
written notice to the Borrower. The Agent will promptly cause
each such payment received by it to be distributed to each
Tranche B Lender (in each case for the account of such Tranche B
Lender's Lending Office) in like funds with respect to each
payment received by such Agent for the account of such Tranche B
Lenders or the holders of the Tranche B Notes.

(c) Whenever any payment hereunder or under any Note falls
due on a day which is not a Business Day, the due date for such
payment shall be advanced to the next succeeding Business Day,
unless the next succeeding Business Day falls in another calendar
month, in which case such payment shall be advanced to the
immediately preceding Business Day.

3.3 Set-Off, Counterclaim and Taxes. The Borrower will (i)
pay all amounts of principal of and interest on the Notes and all
other amounts payable under this Agreement, the Notes and the
Letter Agreement ("Payments") without set-off or counterclaim,
and, to the extent permitted by law, free and clear of, and
without deduction or withholding for or on account of, any Taxes,
and (ii) pay to, indemnify for and hold each of the Lenders
harmless from and against any Taxes which are stamp or like taxes
imposed directly or indirectly with respect to the preparation,
execution, delivery, registration, filing or recording of this
Agreement, the Notes, the Producers Agreement, the Trust
Agreement, the Letter Agreement or any document connected
herewith or therewith and any Taxes which are imposed directly or
indirectly on any Lender or the Agent, with respect to this
Agreement, the Notes, the Producers Agreement, the Trust
Agreement, the Letter Agreement, any document connected herewith
or therewith or the transactions contemplated by any of the
foregoing documents or any Payments. Notwithstanding the
foregoing, the provisions of the first sentence of this Section
3.3 shall not require the Borrower to pay any Excluded Taxes. If
any Taxes (other than Excluded Taxes) are required by law to be
deducted or withheld from any Payment, the Borrower will increase
the amount of such Payment to the Tranche A Lender or the Agent
or both, and the Tranche B Lenders through the Agent, to the
extent necessary in order that the net amount received by the
Tranche A Lender and Agent, and the Tranche B Lenders through the
Agent, after deduction of all Taxes required to be deducted or
withheld with respect to such Payment as so increased and any
other Taxes payable by the Lenders with respect to the amount of
such increase, will equal the full amount of the Payment due and
payable to the relevant Lender or Lenders. The Borrower will
furnish to each Lender, in such number of copies as such Lender
shall request, certified copies of tax receipts or other
appropriate evidence of payment, satisfactory to such Lender,
evidencing the payment of all Taxes levied or imposed upon any
Payment within 45 days after the date any such payment is due
pursuant to applicable law. If any Taxes (other than Excluded
Taxes) are imposed on or with respect to any Payment or are
required to be paid by the Tranche A Lender, the Agent or any
Tranche B Lender on or with respect to any Payment or in
connection with this Agreement or the Notes, the Borrower will
pay or otherwise indemnify and hold the Tranche A Lender, the
Agent and each Tranche B Lender harmless from any such Taxes or
will reimburse to the Tranche A Lender, the Agent and each
Tranche B Lender on demand, subject to the provisions of Section
3.9 hereof, such amounts as may be necessary in order that the
net amount received by the Tranche A Lender, the Agent and each
Tranche B Lender pursuant to such indemnity or reimbursement,
after deduction of all Taxes required to be deducted, withheld or
otherwise paid by the Tranche A Lender, the Agent and the Tranche
B Lenders with respect to such amount, shall equal the amount of
such Taxes so imposed or otherwise subject to indemnity and
reimbursement.

If a Lender shall receive a refund of any Taxes paid by the
Borrower pursuant to this Section 3.3 by reason of the fact that
such Taxes were not correctly or legally asserted, the Lender
shall within 45 days after receipt of such refund pay to the
Borrower the amount of such refund, as determined solely by the
Lender; provided, however, that in no event shall the amount paid
by the Lender to the Borrower pursuant to this sentence exceed
the amount of Taxes originally paid by the Borrower; and further
provided that no Lender shall have any obligation under this
Agreement to claim or otherwise seek to obtain any such refund.

3.4 Change of Law.

(a) Notwithstanding any other provision in this
Agreement to the contrary, if any change in any applicable law,
rule or regulation or in the interpretation or administration
thereof by any governmental authority charged with the
interpretation or administration thereof, or compliance by any
Tranche B Lender (or its Lending Office) with any new request,
interpretation or directive of any relevant central bank or other
governmental authority, shall make it unlawful for any Tranche B
Lender (or its Lending Office) to (i) maintain its Commitment,
then such Commitment of such Tranche B Lender shall thereupon
terminate, or (ii) maintain or fund its Advances, then such
Commitment of such Tranche B Lender shall thereupon terminate,
and the principal amount of such Tranche B Lender's Note then
outstanding shall be repaid, together with interest accrued
thereon and any other amounts payable to such Tranche B Lender
under this Agreement, such Tranche B Lender's Note or the Letter
Agreement, commencing immediately as an accelerated mandatory
prepayment in accordance with Sections 3.2 and 3.3 of the Trust
Agreement; provided, however, that all such amounts shall be paid
on or prior to the Final Maturity Date. Upon the occurrence of
any such change or request making it unlawful for a Tranche B
Lender to maintain its Commitment as aforesaid, such Tranche B
Lender shall promptly forward to the Agent in writing, and the
Agent shall promptly forward to the Borrower, evidence certified
by such Tranche B Lender as to such change or request.

(b) If any change in any applicable law, rule or
regulation or in the interpretation or administration thereof, or
compliance, by any Tranche B Lender or by the Tranche A Lender
with respect to any Deferred Portion or any Overdue Tranche A
Amounts, with any new request (whether or not having the force of
law) of any relevant central bank or other governmental
authority, shall change the basis of taxation of payments to any
such Lender (or its Lending Office) of the principal of or
interest on any of the Notes or any other amounts payable under
this Agreement or the Letter Agreement (except for Excluded
Taxes) or shall impose, modify or deem applicable any similar new
requirement in respect of Reserves against assets of, deposits
with or for the account of, or credit extended by, or the
Commitment of, any such Lender (or its Lending Office) (except
for Reserves in effect on the date of this Agreement), or shall
impose on any such Lender (or its Lending Office) or the London
interbank market any other new condition directly affecting this
Agreement, any of the Notes, the Letter Agreement or the Advances
and the result of any of the foregoing is to increase the cost to
any Tranche B Lender of maintaining its Commitment or making or
maintaining its Advances, to increase the cost to the Tranche A
Lender of maintaining any Deferred Portion of its Advances or any
Overdue Tranche A Amounts, or to reduce the amount of any such
amount received or receivable by any such Lender (or its Lending
Office) hereunder, by an amount deemed by such Lender to be
material, then the Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender for
such additional cost or reduction. Such additional amount or
amounts shall, subject to Section 3.9 hereof, be paid on the
Interest Payment Date for the Interest Period to which such costs
relate. Each Lender agrees that it will promptly notify the
Borrower of any event which will entitle such Lender to an
additional amount pursuant to this Section 3.4(b). A certificate
of such Lender setting forth the basis in reasonable detail for
the determination of such additional amount necessary to
compensate such Lender as aforesaid shall be conclusive as to the
determination of such amount in the absence of manifest error.
After the receipt of any notice from any Lender indicating that
such Lender is entitled to an additional amount pursuant to this
Section 3.4(b), the Borrower may elect to prepay the relevant
Tranche B Note of such Lender or the Deferred Portion of the
Tranche A Note without premium or penalty (except as provided in
Section 2.7(c) hereof) in accordance with the provisions of
Section 3.5 hereof; provided that any such prepayment may be made
only if the amounts set forth in the certificate described in the
preceding sentence are paid by the Borrower prior to or
simultaneously with such prepayment.

(c) Each Lender agrees that, upon the occurrence of
any event giving rise to the operation of Section 3.4(a) or (b)
hereof with respect to such Lender, it will, if requested by the
Borrower, and in consultation with the Agent, use reasonable
efforts to designate another Lending Office for its Commitment or
its Advances; provided that such designation is made on such
terms that such Lender and its Lending Office suffer no economic,
legal or regulatory disadvantage, with the object of avoiding the
consequence of the event giving rise to the operation of Section
3.4(a) or (b) hereof. Nothing in this Section 3.4(c) shall
affect or postpone any of the obligations of the Borrower or the
rights of the Lenders provided in Section 3.4(a) or (b) hereof.

3.5 Certain Prepayments. Whenever the Borrower has elected
to prepay any relevant Note or Notes or any Deferred Portion
thereof pursuant to Section 2.6 or 3.4(b) hereof, the Borrower
shall give the Tranche A Lender and the Agent notice of such
prepayment at least five Business Days in advance thereof
(provided that such notice to the Tranche A Lender shall be
deemed timely if received by the Tranche A Lender in Tokyo at
least four Business Days in advance thereof), and on the date
specified in such notice (which shall be a Business Day and a
single date) the principal then outstanding of the affected Note
or Notes (or, in the case of the Tranche A Note, only the
Deferred Portion thereof) shall be repaid in full, together with
interest accrued thereon and, to the extent then ascertainable,
any other amount (other than non-deferred principal of the
Tranche A Note) payable under this Agreement to the Lender or
Lenders holding such Note or Notes. Any notice of prepayment
under this Section 3.5 hereof shall be irrevocable.

3.6 Other Prepayments. Subject to the prior written
consent of the Tranche A Lender, the Borrower may, upon not less
than eleven Business Days' irrevocable prior notice to the
Tranche A Lender and the Agent (provided that such notice to the
Tranche A Lender shall be deemed timely if received by the
Tranche A Lender in Tokyo at least ten Business Days prior to
prepayment), prepay the Notes in whole or in part on a pro rata
basis (based on outstanding principal amount) on any Interest
Payment Date for the Notes being prepaid, and if in part in an
amount which is equal to $1,000,000.00 or an integral multiple of
$1,000,000.00. Whenever the Borrower seeks such consent, the
Borrower shall give the Agent written notice thereof at the same
time it gives notice to the Tranche A Lender with respect
thereto. Each partial prepayment of any Notes made pursuant to
this Section 3.6 shall be applied to the installments of
principal due thereunder in the inverse order of maturity.
Except as provided in Sections 2.7(b) and (c) hereof, such
prepayments shall be without premium or penalty; provided that
the right to prepay without premium or penalty shall not apply to
any amounts declared forthwith due and payable in accordance with
Section 7 hereof. All prepayments permitted pursuant to this
Section 3.6 shall be made together with payment of accrued
interest on the principal amount prepaid, and, to the extent then
ascertainable, any other amount payable under this Agreement or
the Notes.

3.7 Cancellation of Commitments. The Borrower may without
premium or penalty (a) upon not less than 30 days' irrevocable
prior notice to the Tranche A Lender and the Agent, cancel the
Commitments of the Lenders in whole or in part, and if in part in
an aggregate amount of $1,000,000.00 or an integral multiple of
$1,000,000.00, by reducing amounts to be drawn down pursuant to
the Drawdown Schedule in inverse order, all such cancellations to
be on a pro rata basis as among the Lenders based on their
respective Commitments, or (b) upon not less than five Business
Days' irrevocable prior notice to the Agent, cancel the
Commitment of any Lender whose Note is prepaid in accordance with
the provisions of Section 3.5 hereof.

3.8 No Reborrowing. The Commitments are not revolving in
nature, and no amount repaid or prepaid under this Agreement may
be reborrowed hereunder.

3.9 Payments to be Made at End of Interest Period. Except
for amounts owing pursuant to Sections 3.4(a), 7 and 10.6 hereof
which become payable as provided in such Sections, and
notwithstanding any provision of any Section other than Sections
3.4(a), 7 and 10.6 hereof to the contrary, in view of the nature
of the Borrower and the nature of the Source of Debt Service and
Contingent Support from which payments hereunder will be made,
all amounts becoming payable hereunder, which would otherwise be
due on a date which does not fall on an Interest Payment Date
instead shall be due on the Interest Payment Date next to occur
thereafter and prior to which the Borrower is notified that such
amount is payable, subject in each such case to the relevant
provisions of Sections 3.2 and 3.3 of the Trust Agreement;
provided, however, that all amounts due and payable under this
Agreement and the Notes shall be paid on or prior to the Final
Maturity Date.

SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE BORROWER

The Borrower and, only to the extent expressly stated to be
in its individual capacity, Continental Bank International,
represent and warrant to the Lenders that:

4.1 Power and Authority. The Borrower has full power,
authority and legal right to incur the Indebtedness and other
obligations provided for in this Agreement, the Notes and the
Letter Agreement, to execute and deliver this Agreement, the
Notes, the Trust Agreement and the Letter Agreement and the other
documents contemplated hereby or referred to herein to which the
Borrower is a party, to borrow, pay and repay hereunder and under
the Notes and the Letter Agreement and to perform and observe the
terms and provisions hereof and thereof. Continental Bank
International, in its individual capacity, is a banking
corporation duly organized and validly existing in good standing
under the laws of the United States of America and has the full
power, authority and legal right to execute, deliver and perform
this Agreement, the Notes, the Trust Agreement and the Letter
Agreement as Trustee.

4.2 Legal Action. All necessary legal action has been
taken to authorize the Borrower (i) to execute and deliver this
Agreement, the Notes, the Trust Agreement, the Letter Agreement
and the other documents contemplated hereby or referred to herein
to which the Borrower is a party, (ii) to borrow, pay and repay
hereunder and under the Notes and the Letter Agreement and (iii)
to perform and observe the terms and provisions of this
Agreement, the Notes, the Trust Agreement and the Letter
Agreement.

4.3 Restrictions. There is no Legal Requirement and no
contractual or other obligation binding on the Borrower or
Continental Bank International in its individual capacity, that
is or will be contravened (or, in the case of a contractual
obligation, in respect of which a breach has occurred or will
occur) by reason of the execution and delivery of this Agreement,
the Notes, the Trust Agreement, the Letter Agreement or any of
the other documents contemplated hereby or referred to herein to
which the Borrower is a party, the making of Borrowings by the
Borrower hereunder or the performance or observance by the
Borrower of any of the terms or provisions hereof or thereof in
each case in the manner contemplated hereby and thereby.

4.4 Registration and Approvals. No registrations,
declarations or filings with, or consents, licenses, approvals or
authorizations of, any legislative body, governmental department
or governmental authority necessary under any applicable laws are
required of the Borrower or Continental Bank International in its
individual capacity for the due execution and delivery by the
Borrower, or for the performance by the Borrower, of this
Agreement, the Notes, the Trust Agreement, the Letter Agreement
or any of the other documents contemplated hereby or referred to
herein to which the Borrower is a party, or to authorize the
Borrowings hereunder or to assure the validity or enforceability
hereof or thereof, except in each case for those as have been
made or obtained and copies of which have been furnished to the
Tranche A Lender and the Agent and which are in full force and
effect.

4.5 Agreement Binding. This Agreement, the Trust Agreement
and the Letter Agreement constitute, and the Notes when executed
and delivered pursuant hereto for value will constitute, the
legal, valid and binding obligations of the Borrower enforceable
against the Borrower to the extent specified in Section 9 hereof
in accordance with its and their respective terms, subject in the
case of enforcement to any applicable bankruptcy, insolvency,
moratorium or other similar laws affecting the enforcement of
creditors' rights generally and to equitable principles of
general application.

4.6 Ranking of Advances; Encumbrances. The Borrower has no
outstanding Indebtedness charging or to be paid out of the Source
of Debt Service, Source of Contingent Support, Contingent Support
or Borrowed Amounts other than the obligations and liabilities of
the Borrower hereunder and under the Notes and the Letter
Agreement and any Indebtedness permitted by Section 6.4 hereof.
The Borrower has not created, incurred or suffered to exist (i)
any Encumbrance on the Source of Debt Service, Source of
Contingent Support or any Contingent Support, in each case
received or receivable by it prior to its deposit in the Bontang
III Payment Account, or (ii) any Encumbrance on any Borrowed
Amounts, in each case under clause (i) or (ii) resulting from any
act of the Borrower or any failure by the Borrower to perform any
of its obligations under this Agreement or the Trust Agreement or
any of its duties thereunder, except any Encumbrance permitted
pursuant to Section 6.2 hereof.

4.7 Litigation. There is no suit, action, proceeding or
investigation pending against the Borrower or, to the knowledge
of the Borrower, threatened against the Borrower, which (a)
questions the validity of this Agreement, any Note, the Trust
Agreement or the Letter Agreement, or any action taken or to be
taken by the Borrower pursuant hereto or thereto, (b) affects or
is likely to affect the amount of the Source of Debt Service or
Contingent Support received by it or to the best of the
Borrower's knowledge, receivable by it, or (c) would or is likely
to affect adversely the Borrower's ability to perform its
obligations under this Agreement, the Notes, the Trust Agreement
or the Letter Agreement or any other agreement to which it is a
party or by which it or its properties or assets is bound.

4.8 Compliance With Other Instruments, etc. Continental
Bank International in its individual capacity is not in violation
of any term of its charter or by-laws. The Borrower is not in
violation of any term of any agreement or any instrument to which
it is a party or by which it or any of its properties or assets
is bound or of any Legal Requirement, which violation would or is
likely to have an adverse effect on the Borrower's ability to
perform its obligations under this Agreement, the Notes, the
Trust Agreement, the Letter Agreement or any other agreement to
which it is a party or by which it or its property or assets are
bound.

4.9 No Defaults. No Event of Default referred to in
Sections 7(a) through 7(e) hereof has occurred and is continuing
and no event has occurred or failed to occur, the occurrence or
non-occurrence of which, with the giving of notice or lapse of
time or both, would constitute such an Event of Default, and the
Borrower is not in violation of any of its obligations under the
Trust Agreement.

4.10 Trust Agreement. The copy of the Trust Agreement
delivered to the Lenders on the Effective Date is a true,
complete and correct copy thereof as in effect on the Effective
Date.

SECTION 5. CONDITIONS PRECEDENT

5.1 Conditions Precedent to the Initial Advances. Except
as the Majority Lenders may otherwise consent, the obligation of
each Lender to make the initial Advance to be made by such Lender
hereunder is subject to the condition precedent that the Tranche
A Lender and the Agent shall have one Business Day prior to the
date of the initial Advance received the following, all in form
and, as to Sections 5.1(a) to (p) inclusive and 5.1(r) and (s)
hereof and as to the Indonesian governmental authorizations and
consents referred to in Section 5.1(t) hereof, in substance
satisfactory to the Lenders:

(a) in the case of the Tranche A Lender only, the
Tranche A Note payable to the order of the Tranche A Lender
complying with the requirements of Section 2.9 hereof;

(b) in the case of the Agent only, a Tranche B Note
payable to the order of each Tranche B Lender complying with the
requirements of Section 2.9 hereof;

(c) a signed copy of an opinion of Kelley Drye &
Warren, counsel to the Borrower and the trustees under the
Bontang Excess Sales Trust Agreement and the Bontang I Trust
Agreement, substantially in the form of Exhibit D-1 hereto, dated
one Business Day prior to the date of such Advance;

(d) a signed copy of an opinion of in-house counsel to
the Borrower, substantially in the form of Exhibit D-2 hereto,
dated one Business Day prior to the date of such Advance;

(e) a signed copy of an opinion of the Special Legal
Advisor to the President Director of Pertamina, substantially in
the form of Exhibit E-1 hereto, dated at least one but not more
than five Business Days prior to the date of such Advance;

(f) a signed copy of an opinion of Baker & Botts,
special counsel to Roy M. Huffington, Inc., Huffington
Corporation, Virginia International Company, Virginia Indonesia
Company, Ultramar Indonesia Limited, and Union Texas East
Kalimantan Limited, substantially in the form of Exhibit E-2
hereto, dated one Business Day prior to the date of such Advance;

(g) a signed copy of an opinion of White & Case,
special New York counsel to Pertamina, substantially in the form
of Exhibit E-3 hereto, dated one Business Day prior to the date
of such Advance;

(h) signed copies of opinions of counsel for each of
the Producers other than Pertamina, dated at least one but not
more than five Business Days prior to the date of such Advance;

(i) a signed copy of an opinion of Paul, Weiss,
Rifkind, Wharton & Garrison, special counsel to the Tranche A
Lender, the Agent and the Tranche B Lenders, substantially in the
form of Exhibit F-I hereto, dated one Business Day prior to the
date of such Advance;

(j) a signed copy of an opinion of Tsar & Tsai,
special Taiwan counsel to the Tranche A Lender, the Agent and the
Tranche B Lenders, substantially in the form of Exhibit F-2
hereto, dated one Business Day prior to the date of such Advance;

(k) a signed copy of an opinion of Johnson, Stokes &
Master, special counsel to the Tranche A Lender, the Agent and
the Tranche B Lenders, dated one Business Day prior to the date
of such Advance;

(l) a copy of the Trust Agreement with all amendments
to the date of the initial Advance certified by the Borrower;

(m) a copy of a notice from the Producers to the
Borrower that they have approved the form and terms of this
Agreement and authorizing and requesting the execution and
delivery of this Agreement by the Borrower as contemplated by
Section 3.1 of the Trust Agreement;

(n) copies of the Bontang Excess Sales Trust Agreement
and the Bontang I Trust Agreement, in each case with all
amendments to the date of such Advance certified by the trustees
party thereto;

(o) a copy of the executed and delivered Construction
Agreement with all amendments to the date of such Advance
certified by Pertamina, but not including Exhibits A and B
thereto;

(p) a certificate of Pertamina and, with respect to
each such agreement to which each representative referred to in
Section 13.3 of the Trust Agreement is a party, of such
representative, to the effect that the copies of (i) the
Development Plan, (ii) the Basic Agreements, (iii) the Chubu
Sales Contract, (iv) the 1973 LNG Sales Contract, (v) the Korean
Quantities Agreement, (vi) the Korean Quantities Supplemental
Memorandum, (vii) the Korean Sales Contract, (viii) the Bank
Indonesia Relending Agreement dated as of August 26, 1975 between
the Republic of Indonesia and Pertamina, (ix) the Loan Agreement
for Badak dated as of May 17, 1974, between Pertamina and Japan
Indonesia LNG Co., Ltd., (x) the Badak Escrow and Trust Agreement
dated as of July 15, 1974 among Pertamina, The Industrial Bank of
Japan, Limited and Japan Indonesia LNG Co., Ltd., (xi) the
Transportation Agreement dated as of September 23, 1973 between
Burmast East Shipping Corporation and Pertamina, (xii) the Supply
Agreement for "Korean Carry-Over Quantities" dated as of December
30, 1987 by and between Pertamina, on the one hand, and Roy M.
Huffington, Inc., Huffington Corporation, Virginia International
Company, Virginia Indonesia Company, Ultramar Indonesia Limited,
Union Texas East Kalimantan Limited and Universe Tankships, Inc.,
on the other hand, (xiii) the Supply Agreement for "Korean
Carry-Over Quantities" dated as of December 30, 1987 by and
between Pertamina, on the one hand, and Total Indonesie and
Indonesia Petroleum, Ltd., on the other hand, (xiv) the Supply
Agreement for "Korean Carry-over Quantities" dated as of December
30, 1987 by and between Pertamina, on the one hand, and Unocal
Indonesia, Ltd. and Indonesia Petroleum, Ltd., on the other hand,
(xv) the Bontang Excess Sales Trust Agreement and (xvi) the
Bontang I Trust Agreement, in each case as amended, provided to
the Tranche A Lender and the Agent on the date hereof were true,
correct and complete copies of such documents with all amendments
and that no change has been made in such documents since the date
of this Agreement, except for such changes as are permitted
without the consent of the Majority Lenders pursuant to the
Producers Agreement;

(q) a copy of the most recent statements, entitled
"Certificate of Gas Reserves Nilam Field, East Kalimantan,
Indonesia, as of January 31, 1986," "Certificate of Gas Reserves
Badak Field, East Kalimantan, Indonesia, as of January 31, 1986,"
"Certificate of Gas Reserves, Bekapai, Handil, and Tambora Fields
Operated by Total Indonesie, East Kalimantan, Indonesia, as of
January 31, 1986," "Certificate of Gas Reserves, Tunu Field, East
Kalimantan, Indonesia, as of January 31, 1986," and "Certificate
of Gas Reserves, Attaka Field, East Kalimantan, Indonesia, as of
January 31, 1986," each of which has been prepared by DeGolyer
and MacNaughton, relating to the gas reserves in the Badak and
certain other East Kalimantan fields;

(r) a certificate of Pertamina to the effect that (i)
Property Insurance Policy No. N 76020 dated June 1, 1987,
together with any amendments, issued by P.T. Tugu Pratama
Indonesia in favor of Pertamina, among others, covering the
Bontang Plant (excluding Train E) and (ii) Contractors "All
Risks" Insurance Policy No. E 71031, dated January 25, 1988,
together with any amendments, issued by P.T. Tugu Pratama
Indonesia in favor of Pertamina, among others, covering Train E
have been delivered to the Tranche A Lender and the Agent prior
to the date hereof and, except as permitted by Section 1.11 of
the Producers Agreement, remain in full force and effect in
compliance with Section 1.11 of the Producers Agreement;

(s) copies certified by the Borrower to be true and
correct as of the date of the initial Advance of (i) the
designation of each entity and individual authorized to give
borrowing instructions under Section 3.4(a) of the Trust
Agreement, (ii) the borrowing instructions to the Borrower from
an entity and individual so designated, and (iii) specimen
signatures of the persons who are authorized to act for the
Borrower under and in accordance with the terms of this
Agreement, the Notes, the Trust Agreement and the Letter
Agreement;

(t) certified copies of all required or appropriate
authorizations and consents of all relevant governmental
authorities of Indonesia (certified by Pertamina) and Japan
(certified by the Tranche A Lender), if any, in connection with
the transactions contemplated by this Agreement, the Notes, the
Letter Agreement and the Producers Agreement.

All legal matters in connection with the transactions con-
templated hereby and the making of the initial Advances, and all
documents and instruments evidencing such matters or incident
thereto including, but not limited to, the documents delivered
pursuant to Sections 5.1(a) to (p) inclusive and 5.1(r), (s) and
(t) hereof (but excluding the documents delivered pursuant to
Section 5.1(q) hereof and the Japanese governmental
authorizations and consents referred to in Section 5.1(t) hereof)
shall be satisfactory in form and substance to special counsel to
the Lenders, and special counsel to the Lenders shall have
received all such other documents and instruments, or copies
thereof, certified if requested, as they may reasonably request
in order to enable them to pass upon such matters.

5.2 Conditions Precedent to the Initial and Subsequent
Advances. Except as the Majority Lenders may otherwise consent,
the obligation of each Lender to make each Advance to be made by
such Lender hereunder (including the initial such Advance) is
subject to the further conditions precedent (i) that the Tranche
A Lender and the Agent shall have received a Notice of Borrowing
in accordance with the provisions of Section 2.2(a) hereof, (ii)
that on the date of the making of such Advance and after giving
effect thereto (A) no Event of Default shall have occurred and be
continuing and no event shall have occurred or failed to occur
the occurrence or non-occurrence of which, with the giving of
notice or lapse of time or both would constitute, an Event of
Default, and (B) the representations and warranties of the
Borrower contained in this Agreement and of the Producers
contained in the Producers Agreement shall be true and correct on
and as of the date of the making of such Advance with the same
effect as though such representations and warranties had been
made on and as of such date, (iii) that the Tranche A Lender and
the Agent shall have received from the Borrower a statement from
the Producers conforming to the requirements of Section 6.1(b)
hereof indicating that the Debt Coverage Ratio is not less than
200%, (iv) that there shall have been no material adverse change
(x) since December 31, 1987, in the business, assets, financial
condition or results of operation of the Borrower or any of the
Producers which affects materially and adversely, or would be
likely to affect materially and adversely, the performance by
Pertamina of or the ability of Pertamina to perform its
obligations under the LNG Sales Contract, or (y) in the operation
of the Bontang Plant, (v) that the authorizations and consents
described in Section 5.1(t) hereof shall be in full force and
effect and (vi) no event shall have occurred or circumstance
exist that renders impracticable any of the events set forth in
clauses (i), (ii) or (iii) of the definition of Completion Date
in Section 1 hereof.

5.3 Representations. The making of each Borrowing
hereunder shall be deemed to be a representation and warranty by
the Borrower as of the date of such Borrowing that the facts
specified in Section 5.2(ii)(A) hereof as to Sections 7(a)
through 7(e) hereof only, Section 5.2(ii)(B) hereof and Section
5.2(iv) hereof in each case as to the Borrower only are true and
correct on the date of such Borrowing.

SECTION 6. COVENANTS

Until payment in full of all of the Notes, and of all other
amounts due and owing under this Agreement at the time the Notes
are paid in full, unless compliance with the provisions of this
Section shall have been waived by the Majority Lenders, the
Borrower covenants and agrees with the Lenders that:

6.1 Information. The Borrower shall provide or cause to be
provided to the Tranche A Lender and the Agent:

(a) as soon as possible and in any event within 45
days after the end of the first three calendar quarters in each
year commencing with the quarter ending March 31, 1988, for each
such quarter, and within 45 days after the end of each calendar
year, for such year and for the final calendar quarter thereof, a
statement setting forth for the relevant period or periods (i)
the Gross Invoice Amount invoiced under the LNG Sales Contract,
(ii) the amount of such Gross Invoice Amount received by the
Borrower, (iii) during any Contingent Support Period, the amount
of any Contingent Support received by the Borrower, (iv) during
any Contingent Support Period, a copy of any notice received from
Pertamina setting forth the amount of Source of Contingent
Support invoiced under the relevant Contingent Support Agreements
and received by the relevant trustees and (v) the debits and
credits from the Debt Service Account and Reserve Account and all
subaccounts thereof (as provided in the Trust Agreement);

(b) as soon as possible and in any event within 45
days after the end of each calendar quarter, a statement in
writing setting forth (i) the Source of Debt Service reasonably
anticipated to be payable in each calendar quarter to the Final
Maturity Date (or during any Contingent Support Period, the
amounts of Contingent Support reasonably anticipated to be
payable during such Contingent Support Period, taking into
account the amounts of Source of Contingent Support reasonably
anticipated to be payable during such Contingent Support Period)
plus, if it is reasonably anticipated that such Contingent
Support Period will end, any Source of Debt Service reasonably
anticipated to be payable after the end thereof to the Final
Maturity Date, (ii) the aggregate principal, interest and other
amounts reasonably anticipated to be payable during each calendar
quarter to the Final Maturity Date under this Agreement, the
Notes and the Letter Agreement, (iii) the Debt Coverage Ratio
(calculated both including and excluding any amounts held in the
Debt Coverage Reserve Account), (iv) if the Debt Coverage Ratio
is less than 120%, the amount required to be held in the Debt
Coverage Reserve Account in order for the Debt Coverage Ratio to
be at least equal to 120%, and (v) the reasonably anticipated
Gross Invoice Amount under the LNG Sales Contract in each
calendar quarter to the Final Maturity Date, such statement to be
prepared using the most recent assumptions approved by the
Tranche A Lender, the Agent and the Majority Tranche B Lenders
for purposes of such calculation, which approval shall be
obtained in accordance with the last paragraph of the definition
of Debt Coverage Ratio in Section 1 hereof;

(c) information of the type referred to in clauses (a)
and (b) of this Section 6.1 at such times other than those
specified above as the Tranche A Lender or the Agent may
reasonably request;

(d) as soon as a Responsible officer of the Borrower
obtains actual knowledge thereof, notice of each Event of Default
and each event which has occurred or failed to occur, the
occurrence or non-occurrence of which with the giving of notice
or lapse of time would constitute an Event of Default; and

(e) as soon as the Borrower receives notice from
Pertamina that the events set forth in clauses (i), (ii), and
(iii) of the definition of Completion Date have occurred, a
written notice together with the original copy of the notice of
Pertamina certifying that such events have occurred.

The Agent shall forthwith cause a copy of all
information provided under this Section 6.1 to be distributed to
each Tranche B Lender.

6.2 Negative Pledge. The Borrower will not create, incur
or suffer to exist any Encumbrance on the Source of Debt Service,
Source of Contingent Support or any Contingent Support received
or receivable by it prior to its deposit in the Bontang III
Payment Account, or any Encumbrance on any Borrowed Amounts, in
each case resulting from any act or any failure to perform any
obligation of the Borrower under this Agreement or of the Bontang
III Trustee under the Trust Agreement or any duty as Bontang III
Trustee, except any Encumbrance, if any, (i) arising pursuant to
the Trust Agreement or in favor of the holders of Indebtedness
permitted in accordance with Section 6.4 hereof or (ii) arising
pursuant to statute or otherwise by operation of law, and not
pursuant to any agreement, which is discharged in the ordinary
course of business and which is not enforced by attachment or
levy.

6.3 No Consent to Changes. The Borrower will not terminate
or revoke the Trust Agreement or amend, modify, revise,
supplement or waive any of the provisions of (a) Article 1, 4 or
10 or Section 2.1, 2.2, 2.4, 2.5, 3.1, 3.2, 3.3, 3.7 or 6.1, or
the second sentence of Section 8.2 of the Trust Agreement, in
each case other than to permit the Borrower to enter into
Subordinated Indebtedness, or (b) any other provision of the
Trust Agreement if any such amendment, modification, revision,
supplement or waiver would or would be likely to affect adversely
the trust created under such Trust Agreement, the rights of the
Lenders under or the ability of the Borrower to perform its
obligations under this Agreement, the Notes or the Letter
Agreement. Any consent of the Majority Lenders necessary to
permit any action otherwise prohibited by this Section 6.3 shall
not be unreasonably withheld. The Borrower shall promptly
provide to the Tranche A Lender and the Agent copies of any
agreement or document evidencing any revocation, amendment,
modification or revision of the Trust Agreement or any provision
thereof not requiring the consent of the Majority Lenders under
this Section 6.3.

6.4 Indebtedness. The Borrower shall not create, assume or
become liable for, directly or indirectly, any Indebtedness
charging or to be paid out of the Source of Debt Service, Source
of Contingent Support or Contingent Support, except for (i) all
obligations and liabilities under this Agreement, the Notes or
the Letter Agreement, (ii) any Indebtedness (a) that shall be
payable out of amounts of the Source of Debt Service and
Contingent Support only after the Trustee shall have accumulated
amounts in the Debt Service Account and the Reserve Account
during each Interest Period required to be accumulated therein
pursuant to Sections 7 and 9 hereof and (b) the proceeds of which
shall be applied solely in connection with the Bontang Plant (the
"Subordinated Indebtedness") and (iii) with respect to Source of
Debt Service only, obligations (other than Subordinated Indebt-
edness) in respect of interest rate swap arrangements of the
Borrower entered into solely for the purpose of exchanging
floating interest rate obligations with respect to Tranche B for
fixed interest rate obligations, if such Indebtedness is pari
passu in right of payment and does not benefit from any
Encumbrance other than equally and ratably with, or subordinate
to, the Indebtedness owed to the Lenders under this Agreement,
the Notes and the Letter Agreement and if the terms and
conditions of such arrangements are approved as to form and
substance by the Majority Lenders ("Pari Passu Swap
Indebtedness"), such approval not to be unreasonably withheld;
provided that the withholding of such consent by the Majority
Lenders shall be deemed reasonable if the Borrower and the
Majority Lenders are unable to agree with respect to (x)
amendments to this Agreement, including without limitation
amendments to the definitions of "Debt Coverage Ratio" and
"Discount Rate," with respect to such Pari Passu Swap
Indebtedness, (y) amendments to the Trust Agreement relating to
such Pari Passu Swap Indebtedness or (z) such other changes to
the terms and conditions, including the Events of Default, of the
Trust Agreement, the Producers Agreement and this Agreement as
the Majority Lenders shall request in connection with such Pari
Passu Swap Indebtedness. The Borrower shall not create, assume
or become liable for, directly or indirectly, any Indebtedness
charging or to be paid oui of any Borrowed Amounts, except for
Indebtedness for which such Borrowed Amounts were borrowed.

6.5 Notice at End of Availability Period. After the end of
the Availability Period, the Tranche A Lender and the Agent shall
deliver to the Borrower a notice setting forth the outstanding
amounts of principal and interest as of the final Borrowing Date
and a repayment schedule. The Borrower shall either promptly
confirm that it agrees with such amounts and such schedule by
signing and returning to each of the Tranche A Lender and the
Agent a copy of such notice or promptly deliver to the Tranche A
Lender and the Agent a notice indicating that it does not agree
and specifying the reasons therefor. The delivery or lack of
delivery of such notice to the Borrower shall in no way affect
any of the obligations of the Borrower pursuant to this Agreement
other than those set forth in this Section 6.5.

SECTION 7. EVENTS OF DEFAULT

If any one or more of the following events ("Events of
Default") shall occur and be continuing:

(a) (i) failure to make any payment of the principal of any
of the Notes with respect to either or both of the Tranches
within two days following, or interest on any of the Notes with
respect to either or both of the Tranches within three days
following, the date when due and payable in accordance with the
terms hereof and thereof (provided that for the purposes of this
clause (i) a deferral of payment of an amount of principal
pursuant to Section 2.10(b) hereof shall not be deemed to be a
failure to make such payment), or (ii) failure to pay any other
amounts payable under this Agreement, any of the Notes or the
Letter Agreement within seven days following the date when due in
accordance with the terms of this Agreement, including Section
3.9 hereof; or

(b) any representation or warranty made or deemed made by
or on behalf of the Borrower in Section 4 or Section 5.3 of this
Agreement or in any certificate delivered to the Tranche A
Lender, the Agent or the Tranche B Lenders pursuant hereto shall
prove to have been incorrect or misleading in any material
respect as of the date when made; or

(c) failure by the Borrower to perform or observe any term,
covenant or agreement contained in Section 6.2, 6.3 or 6.4
hereof; or

(d) failure by the Borrower to perform its obligations
under Section 6.1(d) hereof for seven days after written notice
of such failure shall have been given to the Borrower by the
Tranche A Lender or by the Agent at the request of any Tranche B
Lender; or

(e) any failure by the Borrower to perform or observe any
term, covenant or agreement contained in this Agreement (other
than those referred to in clauses (a), (b), (c) or (d) of this
Section 7), or any failure by the Borrower or any Producer to
perform or observe any term, covenant or agreement contained in
the Trust Agreement, for 30 days after written notice of such
failure shall have been given to the Borrower by the Tranche A
Lender or by the Agent at the request of any Tranche B Lender; or

(f) a Default as defined in the Producers Agreement shall
have occurred thereunder; then the Tranche A Lender and the Agent
shall, upon the written request of the Majority Lenders, by
notice of default given to the Borrower, (i) declare the
Commitment of each Lender to be forthwith terminated and/or (ii)
declare all the Notes outstanding hereunder to be forthwith due
and payable, whereupon the then outstanding principal amount of
such Notes, together with accrued interest thereon and any and
all other amounts due under this Agreement and the Letter Agree-
ment, shall forthwith become due and payable without diligence,
presentment, demand, protest, notice of dishonor, or other notice
of any kind, all of which are hereby expressly waived by the
Borrower.

Should the principal amount of the Notes be declared or
become due and payable in the foregoing manner, the entire amount
of the Source of Debt Service and the Contingent Support received
by the Borrower thereafter shall to the extent provided by the
Trust Agreement, as and when received by the Borrower, be
accumulated and paid to the Tranche A Lender and the Agent for
application to the amounts owing by the Borrower under this
Agreement, the Notes which were declared to be or which became
due and payable and the Letter Agreement until all principal of
and interest on such Notes and all other amounts then due and
payable under this Agreement, the relevant Notes and the Letter
Agreement shall have been paid in full.

SECTION 8. AGENT

The Tranche B Lenders, the Agent, and the Lead Managers
agree among themselves and, where the context of Section 8.9 or
8.10 so requires, with the Borrower as follows:

8.1 Appointment and Authority.

(a) Each Tranche B Lender, and each subsequent holder
of any Tranche B Note by its acceptance thereof, irrevocably
authorizes the Agent to receive all payments of principal,
interest and other amounts due to such Tranche B Lender or such
holder under this Agreement and the Tranche B Notes and to take
all other actions on behalf of such Tranche B lender or such
holder and to exercise such powers hereunder as are specifically
delegated to such Agent by the terms hereof, together with all
other such powers as shall be reasonably incidental thereto.

(b) The relationship between each of the Tranche B
Lenders and the Agent is and shall be that of agent and principal
only, and nothing herein shall be construed to constitute the
Agent a trustee for any holder of a Tranche B Note or of a
participation therein nor to impose on the Agent duties and
obligations other than those expressly provided for herein nor to
confer upon the Agent any relationship of agency or trust with
the Borrower. Neither the Agent, nor any of its directors,
officers, employees or agents shall be liable to any of the
Tranche B Lenders for any action taken or omitted to be taken by
it or them hereunder or in connection herewith, whether as a
result of any conflicts affecting or involving the Agent and the
Lead Managers resulting from their responsibilities relating to
Tranche B or otherwise, except for its own or their own gross
negligence or willful misconduct. Each of the Tranche B Lenders,
and each subsequent holder of any Tranche B Note by its
acceptance thereof, agrees (which agreement shall survive payment
of the Tranche B Notes) to indemnify the Agent (to the extent not
reimbursed by the Borrower) and the Lead Managers, in amounts
which are pro rata to the respective Commitments of such Tranche
B Lenders and, in the case of a subsequent holder of any Tranche
B Notes, of the Tranche B Lender from whom such holder acquired
(directly or indirectly) such Tranche B Notes, from and against
any and all losses, claims, damages, liabilities and expenses of
any kind which may be imposed on, incurred by or asserted against
the Agent or the Lead Managers (in their capacities as such) in
any way related to or arising out of this Agreement or any
Advances with respect to Tranche B or any action taken or omitted
by such Agent or the Lead Managers under this Agreement whether
as a result of any conflicts affecting or involving the Agent and
the Lead Managers resulting from their responsibilities relating
to Tranche B or otherwise, except (i) normal administrative
expenses incidental to the performance of their duties as such
Agent and Lead Managers hereunder and (ii) any losses, claims,
damages, liabilities or expenses resulting from its or their
gross negligence or willful misconduct.

8.2 Agent May Rely on Documents. The Agent shall be
entitled to rely on any communication, instrument or document
reasonably believed by it to be genuine and correct and to have
been signed or sent by the proper Person or Persons, and with
respect to all legal matters shall be entitled to rely on the
advice of legal and other professional advisors selected by it
from time to time concerning all matters relating to this
Agreement, the Tranche B Notes and its duties hereunder and
thereunder, and shall not be liable to any of the Tranche B
Lenders for the consequences of such reliance.

8.3 No Amendment to Duties of Agent Without Consent. The
Agent shall not be bound by any waiver, amendment, supplement or
modification of this Agreement which affects its duties under
this Agreement unless it shall have given its prior written
consent, as Agent, thereto.

8.4 Responsibilities of Agent and Lead Managers. The Agent
may treat the payee of any Tranche B Note as the holder thereof
until written notice of the transfer thereof shall have been
received by it. Neither the Agent nor any of the Lead Managers
makes any warranty or representation to any Tranche B Lender, nor
shall any of them be responsible for any recitals, statements,
representations or warranties herein or in any document prepared
by or given by the Borrower or any other Person to the Tranche B
Lenders in connection herewith (or for the accuracy or
completeness of any such document) or for the execution,
effectiveness, genuineness, validity or enforceability of this
Agreement or the Tranche B Notes or any other document, agreement
or instrument delivered in connection herewith or related hereto,
or be liable for failing to make any inquiry concerning the
performance or observance of any of the terms, provisions or
conditions of this Agreement or any Tranche B Note or any other
document, agreement or instrument delivered in connection
herewith or related hereto. The Agent and each Lead Manager
shall be entitled to retain for its own use any amounts paid to
it in its capacity as such. The Agent shall not be deemed to
have known of the occurrence of an Event of Default or other
event the occurrence or non-occurrence of which with the giving
of notice or lapse of time or both would become an Event of
Default or comparable event under any other agreement unless the
Agent has received written notice from a Tranche B Lender or the
Borrower specifying such Event of Default or other event and
stating that such notice is a "Notice of Default" or from any
other relevant Person so specifying. If (i) the Agent receives a
notification pursuant to the preceding sentence, or (ii) the
Borrower fails to pay in accordance with the terms hereof to the
Agent when due the principal of or interest on any Tranche B Note
or any commitment fee payable to any Tranche B Lender hereunder,
the Agent shall promptly give written notice thereof to the
Tranche B Lenders. The Agent may decline to take any action
except upon the written direction of the Majority Tranche B
Lenders and the Agent may obtain a ratification by such Majority
Tranche B Lenders of any action taken by it under this Agreement
or any other document, agreement or instrument delivered in
connection herewith or related hereto. The Agent shall have no
liability to the Lead Managers or Tranche B Lenders for any
action taken by it upon the direction of the Majority Tranche B
Lenders or if ratified by the Majority Tranche B Lenders, nor
shall the Agent have any such liability for any failure to act
unless such Agent has been instructed to act by the Majority
Tranche B Lenders. The action of the Majority Tranche B Lenders
shall in each case bind all of the Tranche B Lenders hereunder.
The Agent shall not be required to take any action which exposes
such Agent to personal liability (unless indemnified to its
satisfaction for any and all consequences of such action) or
which is contrary to this Agreement or any Legal Requirement.

8.5 Funding Costs of Agent. If at any time the Agent makes
available to a Tranche B Lender amounts due from the Borrower
hereunder which the Borrower has failed to make available to the
Agent, then the Tranche B Lender shall on first demand forthwith
refund such amounts to the Agent together with interest thereon
at the rate offered by the Agent for overnight Dollar deposits in
the New York Federal Funds market.

8.6 Agent in Individual Capacity. The Agent and its
affiliates in their capacities as Tranche B Lenders shall have
the same rights and powers hereunder as any Tranche B Lender and
may exercise such rights and powers as though the Agent were not
the Agent. The Agent and its affiliates may (without having to
account therefor to any Tranche B Lender) accept deposits from,
lend money to and generally engage in any kind of banking, trust
or other business with the Borrower, any of the Borrower's
affiliates, the Producers and any of the Producers' affiliates,
as if such Agent were not acting in such capacity hereunder.
Each of the Tranche B Lenders other than the Agent hereby
expressly agrees and consents to the Agent's or an affiliate of
the Agent acting as trustee under the Escrow Agreement during the
term of this Agreement.

8.7 Credit Decision. Each Tranche B Lender represents,
warrants and acknowledges that it has, independently and without
reliance upon the Agent, the Lead Managers or any other Lender,
and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter
into this Agreement. Each Tranche B Lender also acknowledges
that it will, independently and without reliance upon the Agent,
the Lead Managers or any other Lender, and based on such
documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not
taking any action under this Agreement.

8.8 Lead Managers. Nothing in this Agreement shall impose
on the Lead Managers, in their capacity as such, any duties or
obligations whatsoever.

8.9 Change of Administrative Office of Agent. The Agent
may at any time or from time to time by written notice to the
Borrower and to each Tranche B Lender designate a different
office from which its duties as Agent will thereafter be
performed; provided that no such change to a location outside of
the City of New York shall be made without the Borrower's
consent, which consent shall not be unreasonably withheld.

8.10 Successor Agent. Subject to the appointment and
acceptance of a successor Agent as provided below, the Agent may
resign at any time by giving written notice thereof to the
Tranche B Lenders and to the Borrower. The Agent may be removed
at any time with or without cause by the Majority Tranche B
Lenders. Upon any such resignation or removal, such Majority
Tranche B Lenders shall have the right to appoint such successor
Agent. If no successor Agent shall have been so appointed by
such Majority Tranche B Lenders and shall have accepted such
appointment within 30 days after any such retiring Agent's giving
of notice of resignation, then such retiring Agent may appoint
such successor Agent. No successor Agent shall be appointed
without the consent of the Borrower, which consent shall not be
unreasonably withheld or delayed. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with
all the rights,
powers, privileges and duties of such retiring Agent, and such
retiring Agent shall be discharged from its duties and
obligations hereunder. After any such retiring Agent's
resignation hereunder as Agent, the provisions of this Section 8
shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as
any such Agent hereunder.

SECTION 9. SOURCE OF DEBT SERVICE; CONTINGENT SUPPORT; RECOURSE

9.1 Accumulation for Debt Service. Pursuant to Sections 3.2
and 3.3 of the Trust Agreement and except as therein stated, the
Borrower shall pay into the Debt Service Account the entire
amount of all Borrowed Amounts immediately upon receipt thereof,
and, starting with the commencement of each Interest Period, the
Borrower shall pay into the Debt Service Account the entire
amount of each payment of the Source of Debt Service and
Contingent Support, as and when actually received by the
Borrower, until the aggregate amount accumulated in the Debt
Service Account shall be sufficient to pay the principal of and
interest due on all of the Notes, as well as all other amounts
due and payable under this Agreement, the Notes and the Letter
Agreement, in each case during such Interest Period; provided,
however, that for any six-month Interest Period, the amount of
the Source of Debt Service and Contingent Support paid over to
and accumulated in the Debt Service Account for principal and
interest due during such Interest Period shall be in accordance
with Sections 3.2 and 3.3 of the Trust Agreement. All such
principal, interest and other amounts due during any Interest
Period are referred to herein as the "Quarterly Debt Service" for
such Interest Period.

9.2 Accumulation in Regular Reserve Account.

(a) Pursuant to Sections 3.2 and 3.3 of the Trust
Agreement, during each Interest Period, after all amounts of
Source of Debt Service and Continent Support required to be paid
into the Debt Service Account pursuant to Section 9.1 hereof with
respect to such Interest Period have been so paid, the Borrower
shall pay into the Regular Reserve Account the entire remaining
amount of each payment of the Source of Debt Service and
Contingent Support, as and when actually received by the
Borrower, until the aggregate amount accumulated in such Regular
Reserve Account shall equal 100% of the amount of Quarterly Debt
Service reasonably anticipated to be due (i) during the three
Interest Periods next succeeding such Interest Period, if such
Interest Period commences during the first seven years after the
Notice of Start-up, and (ii) during the two Interest Periods next
succeeding such Interest Period, if such Interest Period
commences more than seven years after such Notice. For purposes
of determining such amounts of Quarterly Debt Service, the
interest rate applicable to Tranche B (including any Deferred
Portion thereof) and any Deferred Portion of Tranche A shall be
deemed to be the Assumed Interest Rate.

9.3 Accumulation in Debt Coverage Reserve Account.
Pursuant to Section 3.2 of the Trust Agreement, if at any time
the Debt Coverage Ratio falls below 120%, then for each Interest
Period then in effect or thereafter occurring, after all amounts
of Source of Debt Service and Contingent Support required to paid
into the Debt Service Account and the Regular Reserve Account
pursuant to Sections 9.1 and 9.2 hereof with respect to such
Interest Period have been so paid, the Borrower shall pay into
the Debt Coverage Reserve Account the entire remaining amount of
each payment of the Source of Debt Service or Contingent Support,
as and when actually received by the Borrower, until the Debt
Coverage Ratio equals 120%. All amounts will be paid out of the
Debt Coverage Reserve Account and transferred into the Bontang
III Payment Account when the Debt Coverage Ratio (excluding in
the calculation thereof for such purpose all amounts contained in
the Debt Coverage Reserve Account) shall equal or exceed 130%.

9.4 Accumulation in Contingent Reserve Account.

Pursuant to Section 3.2 of the Trust Agreement, if the
Borrower does not receive the Notice of Start-up before January
1, 1990, the Borrower shall pay into the Contingent Reserve
Account the entire amount of any Contingent Support, as and when
actually received by the Borrower during the period commencing on
January 1, 1990 and ending on the earlier to occur of (i) receipt
by the Borrower of the Notice of Start-up and (ii) September 30,
1990. Upon the receipt by the Borrower of the Notice of
Start-up, the outstanding amount held in the Contingent Reserve
Account shall be transferred into the Regular Reserve Account to
the extent required in Sections 9.1, 9.2 and 9.3 hereof, and the
excess shall be transferred into the Bontang III Payment Account.

9.5 Payments Made from Debt Service Account and Reserve
Account. Except for any personal liability of the Borrower
arising as specifically provided in this Agreement, all payments
to be made by the Borrower under this Agreement, the Notes and
the Letter Agreement, including in each case, without limitation,
payments due on the Final Maturity Date, shall be made only from
the Debt Service Account as the same as defined in, and as at any
applicable time the same shall be funded under, Sections 3.2 and
3.3 of the Trust Agreement; provided, however, that if amounts
held in the Debt Service Account are insufficient to pay all such
amounts when due, any amounts then held (i) first, in the
Contingent Reserve Account, (ii) second, in the Regular Reserve
Account and (iii) third, in the Debt Coverage Reserve Account
shall be applied to make such payments to the extent provided in
Section 3.3 of the Trust Agreement. Except in accordance with
the preceding sentence with respect to any personal liability of
the Borrower, the Borrower shall only be obligated to make
payments under this Agreement, the Notes and the Letter
Agreement, including in each case, without limitation, payments
due on the Final Maturity Date, out of amounts of the Source of
Debt Service, Contingent Support and Borrowed Amounts received by
it. The Borrower agrees that, as long as moneys are held in such
Debt Service Account and such subaccounts of the Reserve Account,
the Lenders, to the extent necessary to make payments in
accordance with the terms of the Trust Agreement of principal,
interest and other amounts due under this Agreement, the Notes
and the Letter Agreement, are among those having a right as
provided under Section 2.2 of the Trust Agreement to receive
disbursements thereunder.

9.6 No Recourse. In furtherance of Sections 9.1 to 9.5
hereof, each of the Tranche A Lender, the Agent, the Lead
Managers, the Tranche B Lenders and each holder of a Note, by its
acceptance thereof, agrees that, except as provided in Section
9.5, it will look solely to the Source of Debt Service,
Contingent Support and Borrowed Amounts to the extent provided in
Section 9.5 hereof for all payments to be made by the Borrower
under this Agreement, the Notes and the Letter Agreement, as
provided therein or herein, including in each case, without
limitation, payments due on the Final Maturity Date, and that no
recourse shall be had for the payment of the principal of or
interest on the Notes or the payment of any other amounts due
under this Agreement or the Letter Agreement, or shall be had for
any claim based on any provision hereof or thereof, against
Continental Bank International (or any entity acting as successor
trustee under the Trust Agreement) in its individual capacity, or
against any past, present or future stockholder, officer,
director, employee or agent of Continental Bank International (or
any entity so acting), or against the grantors, settlors or
beneficiaries of any trust under the Trust Agreement, either
directly or through the Borrower or any successor of any thereof,
under any constitution, statute or rule of law or by the
enforcement of any assessment, or otherwise, and neither
Continental Bank International (or any such entity acting as such
successor trustee) nor any such other Person shall have any
personal obligation, liability or duty whatsoever to the Tranche
A Lender, the Agent, the Lead Managers or the Tranche B Lenders
or any holders of the Notes or anyone else for or with respect to
any such payment or for the performance of or compliance with any
covenant or agreement contained in any of said documents or for
the truth, accuracy or completeness of any statement or
representation made in any such document, except only in the case
of Continental Bank International (or any such entity acting as
successor trustee) for any material breach of a representation or
warranty expressly made by it under Section 4 or Section 5.3
hereof in its individual capacity and such liability as may arise
under this Agreement for gross negligence or willful misconduct
in acting hereunder. In such connection the Borrower (a) shall
be entitled to act upon any notice, certificate, request,
direction, waiver, receipt or other document which it in good
faith believes to be genuine and it shall be entitled to rely
upon the due execution, validity and effectiveness, and the truth
and acceptability of any provisions contained in any of the
foregoing so received, (b) may consult with, and obtain advice
from qualified accounting and legal advisers in connection with
the performance of its obligations and it shall incur no
liability and shall be fully protected in acting in good faith in
accordance with the opinion and advice of such advisers, and (c)
shall have no duties other than those specifically set forth or
provided for herein nor any obligation to familiarize itself with
nor any responsibility with respect to any other agreement
relating to the transactions contemplated by this Agreement to
which it is not a party.

9.7 Not to Limit Remedies. Nothing contained in this
Section 9 shall be construed to limit the exercise and
enforcement, in accordance with the terms of this Agreement, the
Notes or the Letter Agreement, of the rights and remedies of the
Tranche A Lender, the Agent, the Lead Managers or the Tranche B
Lenders or any holders of the Notes against the Borrower
hereunder to the extent of the Source of Debt Service, Contingent
Support and Borrowed Amounts as provided herein.

SECTION 10. MISCELLANEOUS

10.1 Notices. Any notice required or permitted to be given
hereunder shall be in writing and shall be (a) personally
delivered, (b) transmitted by postage prepaid registered mail,
return receipt requested, (c) transmitted by telex (with postage
prepaid mail confirmation) or (d) sent by facsimile transmission
to the parties as follows (as elected by the party giving such
notice):

To the Borrower: Continental Bank International,
as Trustee under the Bontang III
Trust Agreement dated as of February 9, 1988
520 Madison Avenue
New York, New York 10022
Attention: Securities Division
Telex: RCA 232304/ITT 420177
Answerback: CBI UR/ CBI UI
Telecopier: (212) 605-2999

To the Tranche A Lender: Train-E Finance Co., Ltd.
Toranomon 37 Mori Building
9th Floor
5-1, Toranomon 3-chome
Minato-ku
Tokoyo, Japan
Attention: Treasurer
Telex: (0) 2428181
Answerback: TEFCO J
Telecopier: (03) 578-0353

To the Agent: The Industrial Bank of Japan Trust Company
245 Park Avenue
New York, New York 10167
Attention: Loan Department
Telex: 425754 (ITT)
Answerback: IBJTC UI
Telecopier: (212) 557-3581

To the Tranche B Lenders: As provided on the signature pages
hereof

Any notice relating to a Borrowing or a prepayment shall only be
effective on receipt of a legible copy thereof. Except as
otherwise specified in this Agreement, all notices and other
communications shall be deemed to have been duly given on (i) the
date of delivery if delivered personally, (ii) five days
following posting if transmitted by mail, (iii) the date of
transmission with confirmed answerback if transmitted by telex or
(iv) the date of receipt of a legible copy thereof if sent by
facsimile transmission, whichever shall first occur. Any party
may change its address for purposes hereof by notice to the other
parties.

10.2 No Waiver; Remedies Cumulative. No failure to exercise
and no delay in exercising, on the part of the Tranche A Lender,
the Agent, the Tranche B Lenders or the holders of any Note, any
right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right,
power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, power or
privilege. Subject always to the provisions of Section 9 hereof,
the rights and remedies herein provided shall be cumulative and
not exclusive of any rights or remedies provided by law. The
provisions of this Agreement shall inure to the benefit of any
subsequent holder of the Notes.

10.3 Use of English Language. All documents or notices to
be delivered pursuant to or in connection with this Agreement
shall be in the English language. English shall be the official
language for construction and interpretation of this Agreement,
the Notes, the Letter Agreement and all agreements, notices,
documents and instruments. If the original of any such document
or notice is not in the English language, an English translation
thereof shall be delivered.

10.4 Assignment; Successors and Assigns; Participations.
This Agreement shall be binding upon and inure to the benefit of
the Borrower, the Tranche A Lender, the Lead Managers, the
Tranche B Lenders, the Agent and their respective successors and
permitted assigns. The Borrower may not assign any of its rights
or delegate any of its obligations hereunder without the written
consent of all of the Lenders. Any Lender may at any time sell,
assign, transfer, negotiate, or otherwise dispose of, in whole or
in part, with the prior written consent (such consent not to be
unreasonably withheld) of the Borrower, its rights and
obligations under this Agreement or the Notes, provided that the
withholding of such consent by the Borrower shall be deemed
reasonable if the proposed sale, assignment, transfer,
negotiation or other disposition by a Lender would increase the
Borrower's tax indemnification obligations under Section 3.3
hereof. The exercise of such right by any Lender is, however,
subject to the conditions that immediately thereafter such Lender
shall have given written notice of any such transfer to the Bor-
rower and, in the case of a Tranche B Lender only, the Agent, and
the transferee shall (a) not have, or shall have effectively
waived, any right pursuant to Section 3.4(b) hereof to claim from
the Borrower any additional amounts above and beyond those which
could have been claimed by the transferor and (b) not have any
right pursuant to Section 3.4(a) hereof not possessed by the
transferor. The Borrower may treat each Lender, and the Agent
may treat each Tranche B Lender, as the holder of the Note drawn
to its order and delivered to such Lender until written notice of
transfer shall have been received by it. All agreements,
representations and warranties made herein shall survive the
making of any such transfer hereunder by any Lender.
Notwithstanding the foregoing, each Lender may grant
participations which do not create or purport to create binding
obligations of the Borrower, in whole or in part, in its rights
under this Agreement and the Note without any restriction and
without notice to the Borrower.

10.5 Amendments. Any provision of this Agreement or the
Notes may be amended or waived if, and only if, such amendment or
waiver shall be in writing and signed (including the form of
signatures on any telex, cable or facsimile) by the Tranche A
Lender (except with respect to Section 8 hereof), the Majority
Tranche B Lenders and, if the Agent's rights or duties as agent
are affected, the Agent; provided that any such amendment must
also be signed by the Borrower; and provided further that no such
amendment or waiver shall, unless signed by the Tranche A Lender
and each Tranche B Lender, do any of the following: (a) increase
or decrease the Commitment of any Lender or subject any Lender to
any additional obligation hereunder; (b) reduce the amount or
postpone the date of any payment of principal, interest or other
amount hereunder with respect to a Tranche; (c) with respect to
Tranche B only, reduce the percentage of the amount of the
Commitments with respect to Tranche B or the Advances with
respect to Tranche B, specified in the definition of "Majority
Tranche B Lenders" or otherwise required to take any action
hereunder; or (d) amend or waive any provision of this Section
10.5. Any such amendment or waiver shall be signed by the Tranche
A Lender and by the Agent on behalf of the relevant Tranche B
Lenders if the Agent has been so authorized in writing or by
telex, cable or facsimile transmission by the Majority Tranche B
Lenders or all of the Tranche B Lenders, as the case may be. Any
amendment or waiver signed by the Agent in accordance with the
preceding sentence shall be binding upon the Tranche B Lenders
and any holder of a Tranche B Note. Any action that the Agent
may take on behalf of the Majority Tranche B Lenders under this
Agreement and that the Agent in fact so takes shall be binding on
all of the Tranche B Lenders.

10.6 Expenses; Indemnification.

(a) Whether or not the transactions contemplated by
this Agreement shall be consummated, the Borrower agrees (i) to
pay, or reimburse the Tranche A Lender and the Agent, on behalf
of the Tranche B Lenders, for, all reasonable disbursements,
charges and fees of the Lenders' special New York and Taiwan
counsel and (ii) to pay, or reimburse the Agent, on behalf of the
Lead Managers, for, all other reasonable out-of-pocket expenses
of the Lead Managers, including, but not limited to, travel and
photocopying expenses, in each case in connection with the
preparation, negotiation and signing of, and the initial
disbursement under, this Agreement. Upon the making of the
initial Advance under this Agreement, the Borrower shall pay such
amounts on the date of such Advance.

(b) The Borrower agrees (i) to pay, or reimburse the
Tranche A Lender or the Agent or both, as the case may be, for
all reasonable out-of-pocket expenses, including, but not limited
to, travel expenses, legal fees, disbursements and other charges
of Lenders' counsel incurred by the Tranche A Lender or the Agent
or both in connection with any amendment or supplement to, or
modification or waiver of, this Agreement, the Trust Agreement,
the Producers Agreement or other related documents after this
Agreement has been fully executed and (ii) whether or not amounts
due under this Agreement, any of the Notes or the Letter
Agreement are accelerated, upon the occurrence of an Event of
Default or an event the occurrence or non-occurrence of which
would, with notice or lapse of time or both constitute an Event
of Default (but only if such event later becomes an Event of
Default), (1) to pay, or reimburse the holder of the Tranche A
Note for, all expenses of such holder arising in connection with
such Event of Default or the enforcement of this Agreement, such
Tranche A Note, the Letter Agreement or the Producers Agreement,
including but not limited to the fees and expenses of counsel
employed by such holder and (2) to pay, or reimburse the Agent
for, all expenses of the Agent and each holder of any Tranche B
Notes arising in connection with such Event of Default or the
enforcement of this Agreement, such Tranche B Notes, the Letter
Agreement or the Producers Agreement, including but not limited
to the fees and expenses of counsel employed by the Agent or such
holder.

10.7 Sharing of Set-Off and Other Payments. In the event
that any Tranche B Lender shall have received an amount in excess
of its ratable share of payments hereunder or under the Tranche B
Notes through the exercise of any lien, set-off or similar right
or any voluntary payment by the Borrower, such Tranche B Lender
shall promptly (and in any event within 15 days) purchase for
cash without recourse that portion of each other Tranche B
Lender's Advances as will result in each Tranche B Lender
receiving its ratable share of the amount of such lien, set-off
or similar right, or voluntary payment; provided that to the
extent that such excess amount or any portion thereof is
subsequently recovered from the purchasing Tranche B Lender, its
purchases from the other Tranche B Lenders shall be rescinded and
the price repaid without interest; and provided further that if,
after acceleration of the maturity of the relevant Tranche B
Notes pursuant to Section 7 hereof, any Tranche B Lender shall
commence an action or proceeding in any court to enforce the
relevant Tranche B Notes held by such Tranche B Lender and as a
result thereof, or in connection therewith, shall receive an
excess payment on such Tranche B Notes, such Tranche B Lender
shall not be required to share any portion of such excess payment
with a Tranche B Lender which has received sufficient notice to
enable it to and which, has the legal right to, but does not,
join such action or proceeding or commence and diligently
prosecute a separate action or proceeding to enforce its Tranche
B Notes in another court. Nothing herein contained shall in any
way affect (a) expenses pursuant to Section 2.7(c) hereof,
prepayments pursuant to Section 3.4 hereof and interest payments
calculated in accordance with the provisions of the fifth
sentence of Section 2.6 hereof and (b) the right of any Lender to
obtain payment of indebtedness of the Borrower other than
Indebtedness under this Agreement, the Notes and the Letter
Agreement.

10.8 Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on
separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts
together shall constitute one and the same instrument. Complete
sets of counterparts shall be lodged with the Tranche A Lender,
the Agent and the Borrower.

10.9 Table of Contents and Section Headings. The table of
contents and the section headings in this Agreement are inserted
for convenience of reference only and shall be ignored in
construing this Agreement.

10.10 Governing Law. This Agreement and the Notes shall
be governed by and construed in accordance with the laws of the
State of New York, United States of America, applicable to
agreements made and to be performed entirely within such State.

10.11 Severability. If any one or more of the
provisions contained in this Agreement or any document executed
in connection herewith shall be invalid, illegal or unenforceable
in any respect under any applicable law, the validity, legality
and enforceability of the remaining provisions contained herein
shall not in any way be affected or impaired.

10.12 Term of Agreement. The term of this Agreement
shall commence on the Effective Date and shall end on the
termination of all of the Lenders' Commitments or payment in full
of all of the Notes and all other amounts payable under this
Agreement and the Letter Agreement, whichever is later. The
agreements of the Borrower to pay expenses and indemnities
pursuant to Sections 3 and 10.6 of this Agreement shall survive
the repayment of the Advances and the cancellation of all of the
Notes until all amounts payable thereunder are paid in full.

IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective duly authorized
signatories as of the Effective Date.
<PAGE>
The Borrower:

CONTINENTAL BANK INTERNATIONAL,
as Trustee aforesaid

By /s/ Andries H. J. Jansma
Name: Andries H. J. Jansma
Title: Vice President

Commitment Tranche A Lender:

$189,600,000.00 TRAIN-E FINANCE CO., LTD.

By /s/ Rintaro Hara
Name: Rintaro Hara
Title: Executive Vice President

Lending Office:

Toranomon 37 Mori Building
9th Floor
5-1, Toranomon 3-chome
Minato-ku
Tokoyo, 105 Japan

Attention: Treasurer
Telex: (0) 2428181
Answerback: TEFCO J
Telecopier No.: (03) 578-0353

Lead Managers:

THE INDUSTRIAL BANK OF JAPAN TRUST
COMPANY

By /s/ Yoshiro Teranaka
Name: Yoshiro Teranaka
Title: Executive Vice President
<PAGE>
THE BANK OF TOKYO, LTD.
NEW YORK AGENCY

By /s/ Takefumi Murata
Name: Takefumi Murata
Title: Attorney-in-Fact

THE LONG-TERM CREDIT BANK OF
JAPAN, LIMITED
NEW YORK BRANCH

By /s/ Kenichi Amano
Name: Kenichi Amano
Title: Deputy General Manager

BANQUE INDOSEUZ

By /s/ Yves G. Gaden
Name: Yves G. Gaden
Title: First Vice President
Attorney-in-Fact

Agent:

THE INDUSTRIAL BANK OF JAPAN
TRUST COMPANY

By /s/ Yoshiro Teranaka
Name: Yoshiro Teranaka
Title: Executive Vice President

Commitment Tranche B Lenders:

$10,600,000.00 THE INDUSTRIAL BANK OF JAPAN
TRUST COMPANY

By /s/ Yoshiro Teranaka
Name: Yoshiro Teranaka
Title: Executive Vice President
<PAGE>
Lending Office:

245 Park Avenue
New York, New York 10167

Attention: Loan Department
Telex: 425754
Answerback: IBJTC UI
Telecopier No.: (212) 557-3581

Commitment

$10,600,000.00 THE BANK OF TOKYO, LTD.
NEW YORK AGENCY

By /s/ Takefumi Murata
Name: Takefumi Murata
Title: Attorney-in-Fact

Lending Office:

100 Broadway
New York, New York 10005

Attention: Mr. Takefumi Murata
Telex: 229049
Answerback: NBD NY-UR
Telecopier No.: (212) 732-1678

Commitment

$10,600,000.00 THE LONG-TERM CREDIT BANK OF
JAPAN, LIMITED
NEW YORK BRANCH

By /s/Kenichi Amano
Name: Kenichi Amano
Title: Deputy General Manager

Lending Office:

140 Broadway, 23rd Floor
New York, New York 10005

Attention: Mr. Ken-ichi Amano
Telex: 425722
Answerback: LTCB UI
Telecopier No.: (212) 797-1184

Commitment

$10,600,000.00 BANQUE INDOSUEZ
NEW YORK BRANCH

By /s/ Yves G. Gaden
Name: Yves G. Gaden
Title: Attorney-in-Fact

Lending Office:

1270 Avenue of the Americas
Rockefeller Center
New York, New York 10020

Attention: Mr. Fred Schmidt -
Loan Department
Telex: RCA 220898
Answerback: ISNYUR
Telecopier No.: (212) 408-5757

with a copy to:

Mme F. Struxiano-Auffray - D.I.F.S.
Banque Indosuez
44, Rue de Courcelles
75008 Paris - France
Tel. (33.1.) 45.61.23.77
Telex: Paris 650409 INSU X

<PAGE>
Commitment

$7,000,000.00 THE DAI-ICHI KANGYO BANK,
LIMITED
NEW YORK BRANCH

By /s/ Munetoshi Matsumoto
Name: Munetoshi Matsumoto
Title: Vice President

Lending Office:

One World Trade Center
Suite 4911
New York, New York 10048

Attention: Mr. Munetoshi Matsumoto
Vice President
Business Department I
Telex: ITT 420720, 422581
RCA 232988
Answerback: DKB UI
DKB UR
Telecopier No.: (212) 524-0579

Commitment

$7,000,000.00 THE DAIWA BANK, LIMITED
NEW YORK BRANCH

By /s/ Hiroyuki Doi
Name: Hiroyuki Doi

Title: Manager

Lending Office:

75 Rockefeller Plaza
New York, New York 10019

Attention: Mr. Hiroyuki Doi
Telex: RCA 232246, ITT 422391
Answerback: NEWDAIWA
Telecopier No.: (212) 397-9317
<PAGE>
Commitment

$7,000,000.00 THE FUJI BANK AND TRUST COMPANY

By /s/ Mitsuhiro Nogahama
Name: Mitsuhiro Nogahama

Title: Vice President

Lending Office:

One World Trade Center
92nd Floor
New York, New York 10048

Attention: Mr. Yoshihiro Sawada
Senior Vice President
Telex: 425777
Answerback: FUJTR
Telecopier No.: (212) 524-0853

Commitment

$7,000,000.00 THE MUTSUBISHI BANK, LIMITED
NEW YORK BRANCH

By /s/ Takeshi Yokokawa
Name: Takeshi Yokokawa

Title: Manager

Lending Office:

One World Trade Center
Suite 8527
New York, New York 10048

Attention: Mr. Takeshi Yokokawa
Manager, Planning
and Administration
Department
Telex: 232328
Answerback: MIT UR
Telecopier No.: (212) 432-1157
<PAGE>
Commitment

$7,000,000.00 THE MUTSUBISHI TRUST AND BANKING
CORPORATION
NEW YORK BRANCH

By /s/ Ryoichi Mizukami
Name: Ryoichi Mizukami
Title: Manager

Lending Office:

520 Madison Avenue
25th Floor
New York, New York 10022

Attention: Mr. Ryoichi Mizukami
Manager
Telex: 23425078
Answerback: MTBA UI
Telecopier No.: (212) 755-2349

Commitment

$7,000,000.00 THE MITSUI BANK, LTD.
NEW YORK BRANCH

By /s/Ken-Ichi Sato
Name: Ken-Ichi Sato
Title: Senior Vice President

Lending Office:

277 Park Avenue
New York, New York 10172-0121

Attention: Mr. Mitsushige Kanameda
Telex: RCA 232962
Answerback: 232962 MTUI UR
Telecopier No.: (212) 644-9565
<PAGE>
Commitment

$7,000,000.00 THE MITSUI TRUST & BANKING CO.,
LTD.
NEW YORK BRANCH

By /s/ Kazuo Yasuda
Name: Kazuo Yasuda
Title: Deputy General Manager

Lending Office:

One World Financial Center
200 Liberty Street
New York, New York 10281

Attention: Mr. Hirohisa Gotoda
Assistant Vice President
Telex: 222401
Answerback: MBCOUR
Telecopier No.: (212) 945-4171
(212) 945-4170

Commitment

$7,000,000.00 THE SAITAMA BANK, LTD.
NEW YORK BRANCH

By /s/ Takayoshi Tasaka
Name: Takayoshi Tasaka
Title: Senior Manager

Lending Office:

44 Wall Street
New York, New York 10005

Attention: Mr. Takayoshi Tasaka
Telex: 233410/424019
Answerback: SAIB UR/SAIB UI
Telecopier No.: (212) 825-9033

<PAGE>
Commitment

$7,000,000.00 THE SANWA BANK, LIMITED
NEW YORK BRANCH

By /s/ Toshihiko Yoshizawa
Name: Toshihiko Yoshizawa

Title: Vice President

Lending Office:

200 Park Avenue
New York, New York 10166

Attention: Mr. Toshihiko Yoshizawa
Vice President
Telex: 232423
Answerback: SWB UR
Telecopier No.: (212) 557-0185

Commitment

$7,000,000.00 THE SUMITOMO BANK, LIMITED
NEW YORK BRANCH

By /s/ Kazuyoshi Ogawa
Name: Kazuyoshi Ogawa
Title: Vice President

Lending Office:

One World Trade Center
Suite 9651
New York, New York 10048

Attention: International Finance
Section
Telex: 420515 (ITT); 232407 (RCA)
Answerback: SMBK-UR
Telecopier No.: (212) 524-0612

<PAGE>
Commitment

$7,000,000.00 THE TOKAI BANK, LIMITED
NEW YORK BRANCH

By /s/Toshikazu Nakano
Name: Toshikzau Nakano

Title: Vice President

Lending Office:

One World Trade Center
Suite 8763
New York, New York 10048

Attention: Mr. Toshikazu Nakano
Vice President and Manager
International Finance and
Loan
Administration
Telex: 422857
Answerback: TOKAI
Telecopier No.: (212) 524-0224

Commitment

$7,000,000.00 THE TOYO TRUST & BANKING CO., LTD.
NEW YORK BRANCH

By /s/ Robert J. Tse
Name: Robert J. Tse

Title: Vice President

Lending Office:

437 Madison Avenue
New York, New York 10022

Attention: Mr. Robert Tse
Vice President
Telex: 23-222675
Answerback: TTBC UR
Telecopier No.: (212) 371-4963

<PAGE>
List of omitted Exhibits and Schedules to Bontang III Loan
Agreement, dated February 9, 1988, among Continental Bank
International as Trustee, Train-E Finance Co., Ltd., as Tranche A
Lender and The Industrial Bank of Japan Trust Company as Agent
for the Tranche B Lenders and as Tranche B Lender.

Exhibit Description

Exhibit A Form of Notice of Borrowing

Exhibit B-1 Form of Notice of Deferral

Exhibit B-2 Form of Notice of Interest Period

Exhibit C-1 Form of Tranche A Note

Exhibit C-2 Form of Tranche B Note

Exhibit D-1 Form of Legal Opinion of Kelley Drye &
Warren, Counsel for the Borrower

Exhibit D-2 Form of Legal Opinion of In-House
Counsel to the Borrower

Exhibit E-1 Form of Legal Opinion of the Special
Legal Advisor to the President Director
of Pertamina

Exhibit E-2 Form of Legal Opinion of Baker & Botts,
Special Counsel to Certain Members of
the Huffco Group

Exhibit E-3 Form of Legal Opinion of White & Case,
Special New York Counsel to Pertamina

Exhibit F-1 Form of Legal Opinion of Paul, Weiss,
Rifkind, Wharton & Garrison, Special
Counsel to the Tranche A Lender, the
Agent and the Tranche B Lender

Exhibit F-2 Form of Legal Opinion of TSAR & TSAI,
Special Taiwanese Counsel to the Tranche
A Lender, the Agent and Tranche B
Lenders

Schedule Description

Schedule 1 Basic Agreements

Schedule 2 Contingent Support Agreements

Schedule 3 Drawdown Schedule
TABLE OF CONTENTS

Page

RECITALS . . . . . . . . . . . . . . . . . . . . . . . . 1

1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . 2

2. THE ADVANCES. . . . . . . . . . . . . . . . . . . . 17
2.1 The Commitments . . . . . . . . . . . . . . . . 17
2.2 Manner of Borrowing . . . . . . . . . . . . . . 17
2.3 Interest. . . . . . . . . . . . . . . . . . . . 19
2.4 Election of Interest Periods for Tranche B. . . 19
2.5 Interest Rates. . . . . . . . . . . . . . . . . 19
2.6 Alternative Interest Rates. . . . . . . . . . . 20
2.7 Interest Rate on Overdue Amounts; Other Indemnities
21
2.8 Fees. . . . . . . . . . . . . . . . . . . . . . 23
2.9 The Notes . . . . . . . . . . . . . . . . . . . 23
2.10 Repayment on Maturity Dates; Deferral. . . . . 24
2.11 Notices. . . . . . . . . . . . . . . . . . . . 25

3. PAYMENTS. . . . . . . . . . . . . . . . . . . . . . 25
3.1 Allocation of Amounts; Substitute Payment . . . 25
3.2 Funds of Payment. . . . . . . . . . . . . . . . 26
3.3 Set-Off, Counterclaim and Taxes . . . . . . . . 26
3.4 Change of Law . . . . . . . . . . . . . . . . . 27
3.5 Certain Prepayments . . . . . . . . . . . . . . 29
3.6 Other Prepayments . . . . . . . . . . . . . . . 29
3.7 Cancellation of Commitments . . . . . . . . . . 29
3.8 No Reborrowing. . . . . . . . . . . . . . . . . 29
3.9 Payments to be Made at End of Interest Period . 29

4. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. . . 30
4.1 Power and Authority . . . . . . . . . . . . . . 30
4.2 Legal Action. . . . . . . . . . . . . . . . . . 30
4.3 Restrictions. . . . . . . . . . . . . . . . . . 30
4.4 Registration and Approvals. . . . . . . . . . . 30
4.5 Agreement Binding . . . . . . . . . . . . . . . 31
4.6 Ranking of Advances; Encumbrances . . . . . . . 31
4.7 Litigation. . . . . . . . . . . . . . . . . . . 31
4.8 Compliance with Other Instruments, etc. . . . . 31
4.9 No Defaults . . . . . . . . . . . . . . . . . . 31
4.10 Trust Agreement. . . . . . . . . . . . . . . . 32
<PAGE>
5. CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . 32
5.1 Conditions Precedent to the Initial Advances. . 32
5.2 Conditions Precedent to the Initial and Subsequent
Advances. . . . . . . . . . . . . . . . . . . . . . 35
5.3 Representations . . . . . . . . . . . . . . . . 35

6. COVENANTS . . . . . . . . . . . . . . . . . . . . . 35
6.1 Information . . . . . . . . . . . . . . . . . . 35
6.2 Negative Pledge . . . . . . . . . . . . . . . . 37
6.3 No Consent to Changes . . . . . . . . . . . . . 37
6.4 Indebtedness. . . . . . . . . . . . . . . . . . 37
6.5 Notice at End of Availability Period. . . . . . 38

7. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . 38

8. AGENT . . . . . . . . . . . . . . . . . . . . . . . 39
8.1 Appointment and Authority . . . . . . . . . . . 39
8.2 Agent May Rely on Documents . . . . . . . . . . 40
8.3 No Amendment to Duties of Agent Without Consent 40
8.4 Responsibilities of Agent and Lead Managers . . 40
8.5 Funding Costs of Agent. . . . . . . . . . . . . 41
8.6 Agent in Individual Capacity. . . . . . . . . . 41
8.7 Credit Decision . . . . . . . . . . . . . . . . 41
8.8 Lead Managers . . . . . . . . . . . . . . . . . 41
8.9 Change of Administrative Office of Agent. . . . 42
8.10 Successor Agent. . . . . . . . . . . . . . . . 42

9. SOURCE OF DEBT SERVICE; CONTINGENT SUPPORT; RECOURSE. . . 42
9.1 Accumulation for Debt Service . . . . . . . . . 42
9.2 Accumulation in Regular Reserve Account . . . . 42
9.3 Accumulation in Debt Coverage Reserve Account . 43
9.4 Accumulation in Contingent Reserve Account. . . 43
9.5 Payments Made from Debt Service Account and Reserve
Account . . . . . . . . . . . . . . . . . . . . . . 43
9.6 No Recourse . . . . . . . . . . . . . . . . . . 44
9.7 Not to Limit Remedies . . . . . . . . . . . . . 45

10. MISCELLANEOUS
10.1 Notices. . . . . . . . . . . . . . . . . . . . 45
10.2 No Waiver; Remedies Cumulative . . . . . . . . 46
10.3 Use of English Language. . . . . . . . . . . . 46
10.4 Assignment; Successors and Assigns; Participations
46
10.5 Amendments . . . . . . . . . . . . . . . . . . 47
10.6 Expenses; Indemnification. . . . . . . . . . . 47
10.7 Sharing of Set-Off and Other Payments. . . . . 48
10.8 Counterparts . . . . . . . . . . . . . . . . . 48
10.9 Table of Contents and Section Headings . . . . 48
10.10 Governing Law . . . . . . . . . . . . . . . . 48
10.11 Severability. . . . . . . . . . . . . . . . . 48
10.12 Term of Agreement . . . . . . . . . . . . . . 49

AMENDMENT NO. 1
TO
BONTANG III
PRODUCERS AGREEMENT

Dated as of
May 31, 1988

Train-E Finance Co., Ltd.
as Tranche A Lender

The Industrial Bank of Japan
Trust Company
245 Park Avenue
New York, New York 10167

As Agent for the Tranche B Lenders under the Bontang III Loan
Agreement dated as of February 9, 1988, among (a) Continental Bank
International, as trustee (the "Trustee") under the Bontang III
Trustee and Paying Agent Agreement among it and Perusahaan
Pertambangan Minyak Dan Gas Bumi Negara, Roy M. Huffington, Inc.,
Huffington Corporation, Virginia International Company, Virginia
Indonesia Company, Ultramar Indonesia Limited, Union Texas East
Kalimantan Limited, Universe Tankships, Inc., Total Indonesie,
Unocal Indonesia, Ltd., and Indonesia Petroleum, Ltd. (the
"Producers"), dated as of February 9, 1988 (the "Trust Agreement"),
and (b) Train-E Finance Co., Ltd., as Tranche A Lender; the lead
managers and Tranche B Lenders parties to said loan agreement; and
The Industrial Bank of Japan Trust Company as Agent for the Tranche
B Lenders under said loan agreement (the "Loan Agreement").

Dear Sirs:

Reference is made to the Bontang III Producers Agreement among
us dated as of February 9, 1988 (the "Producers Agreement").

1. Section 1.11 of the Producers Agreement is hereby amended
by inserting the following at the end of such Section as new
subparagraphs (f) and (g) thereof:

"(f) For the purposes of this Section 1.11 only, the
term "Bontang Plant" is used with the meaning defined in the Loan
Agreement - except that the following are expressly excepted and
excluded from the items included in such definition: property
outside the perimeter fence (other than the feed gas knock out
drums which are in a separately fenced area to the west of the main
plant, which are included in such definition); land acquisition,
site preparation, grading and infilling; roads, gates and fences;
foundations other than parts exposed at or above grade level;
pilings; underground pipes, sewers and drains; LNG and LPG loading
docks other than the equipment and superstructures thereon; cooling
water intakes other than the equipment thereon; cargo docks and
navigational aids located offshore; moveables other than spare
parts; fresh water systems, outfall canals and diversion dikes; and
temporary electrical and communications equipment.

(g) In determining the "full replacement value" of the
Bontang Plant pursuant to Section 1.11(b)(i), the cost of the
following shall be excluded: all basic engineering and part of
detail engineering to the extent that existing drawings and
specifications are expected to be available and will be used in a
reinstatement; all dredging work; water wells; all major excavation
work and the use of heavy earth moving equipment; and surplus
materials in excess of 5% of required quantities."

2. The Lenders by their execution and delivery of this
Amendment hereby acknowledge their acceptance of Robins, Davis &
Little International as the independent appraisers for the
determination of the replacement value of the LNG Plant as required
by Section 1.11(b)(i) of the Producers Agreement as amended hereby.

3. Except as amended hereby, the Producers Agreement remains
unchanged and in full force and effect. The capitalized terms not
otherwise defined herein have the same meanings as provided in the
Producers Agreement.

4. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

5. This Amendment may be executed in any number of
counterparts, each of which when so executed and delivered shall be
an original, but all such counterparts together shall constitute
one and the same instrument.

The undersigned Producers have caused this Amendment to be
duly executed by their respective duly authorized signatories as of
the date hereof.

PERUSAHAAN PERTAMBANGAN MINYAK
DAN GAS BUMI NEGARA (PERTAMINA)

By /S/
Name:
Title:

ROY M. HUFFINGTON, INC.

By /S/
Name:
Title:

HUFFINGTON CORPORATION

By /S/
Name:
Title:

VIRGINIA INTERNATIONAL COMPANY

By /S/
Name:
Title:

ULTRAMAR INDONESIA LIMITED

By /S/
Name:
Title:

VIRGINIA INDONESIA COMPANY

By /S/
Name:
Title:

UNION TEXAS EAST KALIMANTAN
LIMITED

By /S/
Name:
Title:

UNIVERSE TANKSHIPS, INC.

By /S/
Name:
Title:

TOTAL INDONESIE

By /S/
Name:
Title:

UNOCAL INDONESIA, LTD.

By /S/
Name:
Title:

INDONESIA PETROLEUM, LTD.

By /S/
Name:
Title:

Accepted:

TRAIN-E FINANCE CO., LTD., AS
TRANCHE A LENDER

By /S/
Name:
Title:

THE INDUSTRIAL BANK OF JAPAN
TRUST COMPANY, AS AGENT

By /S/
Name:
Title:

THE INDUSTRIAL BANK OF JAPAN
TRUST COMPANY, ON BEHALF OF THE
TRANCHE B LENDERS

By /S/
Name:
Title:

AMENDED AND RESTATED 1973 LNG SALES CONTRACT

This LNG Sales Contract ("Contract") dated as of the 3rd
day of December, 1973, amended by Amendment No.1 dated as of the
1st day of August, 1976, and amended and restated as of the 1st day
of January, 1990, by and between PERUSAHAAN PERTAMBANGAN MINYAK DAN
GAS BUMI NEGARA ("Pertamina"), a state enterprise of the Republic
of Indonesia ("Seller"), on the one hand, and CHUBU ELECTRIC POWER
CO., INC. ("Chubu Electric"), THE KANSAI ELECTRIC POWER CO., INC.
("Kansai Electric"), KYUSHU ELECTRIC POWER CO., INC. ("Kyushu
Electric"), NIPPON STEEL CORPORATION ("Nippon Steel"), OSAKA GAS
CO., =. ("Osaka Gas"), and TOHO GAS CO., LTD. ("Toho Gas"), all
corporations organized and existing under the laws of Japan
(referred to individually as "Buyer" and collectively as "Buyers"),
on the other hand.

WITNESSETH:
WHEREAS:

1. By Memorandum of Agreement, dated as of January 1, 1983,
Seller and Buyers other than Toho Gas agreed to amend the Fixed
Quantity provisions of the Contract with respect to calendar years
1983 through 1997 to provide for the sale to and purchase by Buyers
of additional quantities of LNG;

2. By Assignment dated as of January 30, 1987, Nippon Steel
assigned to Toho Gas all of its rights and Toho Gas assumed the
obligations with respect to a portion of the Fixed Quantities that
Nippon Steel had agreed to purchase under the Contract; Seller and
the other Buyers consented to such assignment pursuant to the
Contract and to the inclusion of Toho Gas as a Buyer under the
Contract as of January 1, 1987;

3. By Seller/Buyers Memorandum of Understanding Related to
Amendment No.3 to the Transportation Agreement, dated October 16,
1987, Seller and Buyers agreed on certain matters that relate to
transportation of LNG pursuant to the Contract and Seller and
Buyers have agreed to amend the Contract to incorporate such
agreements;

4. By that certain Invoice Settlement Agreement for 1973 LNG
Sales Contract dated as of March 31, 1987 and amended and restated
as of December 1, 1988, Seller and Buyers agreed to amend the
Contract to delete the currency adjustment provision and all
references thereto as of April 1, 1988;

5. By Memorandum of Agreement on Revisions to the 1973 LNG Sales
Contract dated as of September 7, 1989, Seller and Buyers agreed to
revise certain provisions of the Contract, to provide for the sale
and purchase of additional quantities of LNG during the period
1997; through 1999, and to amend the Contract to incorporate these
revisions effective as of January 1, 1990; and

6. Seller and Buyers have agreed to eliminate those provisions of
the Contract that are no longer operational and to make certain
linguistic and grammatical revisions to improve the clarity of the
Contract.
NOW, THEREFORE, Seller and each Buyer hereby agree to the
following terms:

ARTICLE 1 - DEFINITIONS

The terms or expressions below will have the following
meanings in this Contract:

1.1 Actual Cubic Foot (acf)
A volume equal to the volume of a cube whose edge is one
foot.

1.2 Adverse Weather Conditions
As defined in Section 4.4(b).

1.3 Affiliate
As defined in Article 19.

1.4 Allowance
The quantity of LNG by which a Buyer reduces a Quantity
Deficiency in respect of a given calendar year pursuant to the
provisions of Section 7.3(d).

1.5 Allowance Restoration Period
As defined in Section 7.3(d)(iv).
1.6 Annual Accounting Period
As defined in the Transportation Agreement.

1.7 Annual Program
As defined in Section 12.1(a).

1.8 Arun Facility
The liquefaction plant facilities, including processing,
storage, loading and related facilities and the Natural Gas
transmission pipeline from the field to the liquefaction plant,
located near Lhok Seumawe, Aceh, Indonesia.

1.9 Badak Facility
The liquefaction plant facilities, including processing,
storage,
loading and related facilities and the Natural Gas transmission
pipeline from the
field to the liquefaction plant, located in East Kalimantan,
Indonesia.

1.10 British Thermal Unit (BTU)
The amount of heat required to raise the temperature of
one avoirdupois pound of pure water from 59.OoF to 60.OoF at an
absolute pressure of 14.696 pounds per square inch.

1.11 Business Day in Japan
Every day other than Saturdays, Sundays, National
Holidays (including compensatory days), and January 2 and 3.

1.12 Buyers' Coordinator
Japan Indonesia LNG Co., Ltd. or such other entity as may
be designated by Buyers pursuant to Article 18.

1.13 Buyers' Facilities
For the purposes of Section 15.1 E in respect of any
Buyer, the Receiving Facilities of such Buyer and such other
facilities directly related to the use of LNG which, if not
operational, would reduce the amount of LNG which such Buyer is
able to receive hereunder.

1.14 Contract Sales Price
As defined in Section 8.1.

1.15 Coordinated Maintenance Schedule
As defined in Section 12.3.

1.16 Crew + Stores + Subsistence
The items included in the definition of Operating Costs
in the Transportation Agreement in the following categories: Crew
wages, overtime and fringe benefits, including subsistence and
repatriation expense; Stores and Equipment; and Subsistence.

1.17 Cubic Meter
A volume equal to the volume of a cube whose edge is one
meter.

1.18 Dedicated Vessel
As defined in the Transportation Agreement.
1.19 Delivery Point
The point at which the flange coupling of Buyer's
unloading line joins the flange coupling of the LNG discharging
manifold on board the LNG Tanker.

1.20 Escalating
As defined in the Transportation Agreement.

1.21 Exercising Buyer
As defined in Section 7.3(d)(i).

1.22 Financing Costs
As defined in the Transportation Agreement.

1.23 Fixed Quantity
As defined in Section 7.1(a).

1.24 Fixed Quantity Period
As defined in Section 7.1(a).

1.25 Force Majeure Deficiency
As defined in Section 7.6.

1.26 G.P.A.
Gas Processors Association.

1.27 Gross Heating Value
The quantity of heat expressed in British Thermal Units
produced by the complete combustion in air of one cubic foot of
anhydrous gas, at a temperature of 60oF and at an absolute pressure
of 14.696 pounds per square inch, with the air at the same
temperature and pressure as the gas, after cooling the products of
the combustion to the initial temperature of the gas and air, and
after condensation of the water formed by combustion.

1.28 Huffco Group
Roy M. Huffington, Inc., Huffington Corporation, Virginia
International Company, Virginia Indonesia Company, Ultramar
Indonesia Limited, Union Texas East Kalimantan Limited and Universe
Tankships, Inc.

1.29 Indonesian Facilities
The Arun Facility and the Badak Facility.

1.30 Initial Contract Sales Price
As defined in Section 8.1.

1.31 Insurance
As defined in the definition of Operating Costs in the
Transportation Agreement.

1.32 Inward Steaming Time
As defined in Section 4.4(b).

1.33 Liquefied Natural Gas (LNG)
Natural Gas in a liquid state at or below its boiling
point at a pressure of approximately one atmosphere.

1.34 LNG Element
As defined in Section 8.1.

1.35 LNG Tanker
An ocean-going vessel, suitable for transporting LNG,
which is used by Seller for transportation of LNG under this
Contract to the Unloading Ports.
1.36 Loading Ports
The ports located at the Arun Facility and the Badak
Facility.

1.37 Maintenance and Repairs
As defined in the definition of Operating Costs in the
Transportation Agreement.

1.38 Make-Good LNG
As defined in Section 7.3(d)(iv).
1.39 Make-Good Obligation

The obligation of a Buyer as set forth in Section
7.3(d)(iv) to take and pay for LNG in an amount (measured in BTUs)
equal to each allowance exercised.

1.40 Make-Up LNG
As defined in Section 7.5.

1.41 Market Value LNG Element
As defined in Section 8.2.

1.42 Minimum LNG Element
As defined in Section 8.2.

1.43 Mobil
Mobil Oil Indonesia Inc.

1.44 Natural Gas
Any hydrocarbon or mixture of hydrocarbons consisting
essentially of methane, other hydrocarbons, and non-combustible
gases in a gaseous state and which is extracted from the subsurface
of the earth in its natural state, separately or together with
liquid hydrocarbons.

1.45 Ninety-Day Schedule
As defined in Section 12.2.

1.46 Notice of Readiness
The notice given at the time prescribed in Section 4.4(b)
by the Master of each LNG Tanker or its agent to Buyer by
letter, telegraph, telex, facsimile, radio or telephone
that such LNG Tanker is ready to discharge LNG.

1.47 Operating Costs
As defined in the Transportation Agreement.

1.48 Outward Steaming Time
As defined in Section 4.4(b).

1.49 Quantity Deficiency
As defined in Section 7.3(a).

1.50 Receiving Facilities
The LNG receiving terminal facilities which Buyers have
constructed or will construct at the Unloading Ports including,
without limitation, berthing and unloading facilities, LNG storage
tanks, vessel services facilities and regasification plants.

1.51 Required Minimum Payment
As defined in the Transportation Agreement.

1.52 Restoration Quantities
As defined in Section 7.6.

1.53 Safety Pledge Letter
As defined in Section 4.1(c).

1.54 Seller's Facilities
For the purposes of Section 15.1 D, Natural Gas
reservoirs or production facilities in the field, the facilities
for transportation of Natural Gas from the field, and the
Indonesian Facilities.

1.55 Seller's Suppliers
In respect of a portion of the LNG to be delivered from
the Arun Facility, Mobil; and in respect of a portion of the LNG to
be delivered from the Badak Facility, Huffco Group; and any
successors and assignees of the aforesaid suppliers, who shall have
agreed in writing to be bound by all of the obligations of their
respective assignors under the applicable supply agreement with
Seller.

1.56 Standard Cubic Foot of Gas (scf)
The quantity of Natural Gas, free of water vapor,
occupying a volume of one Actual Cubic Foot at a temperature of
60oF and at an absolute pressure of 14.696 pounds per square inch.
1.57 Substitute LNG Tanker
An LNG Tanker other than a Dedicated Vessel.
1.58 Take-or-Pay Quantity
As defined in Section 7.5.

1.59 Take-or-Pay Transportation Amount
As defined in Section 7.3(e).

1.60 Transportation Agreement
Transportation Agreement made as of September 23, 1973
between Pertamina and Burmah Gas Transport Limited (as successor to
Burmast East Shipping Corporation), as amended by Amendment No.1
dated as of August 31, 1976, Amendment No.2 dated as of November
28, 1979, and Amendment No.3 dated as of May 27, 1981 (and
including any further amendment that may be agreed pursuant to
Section 4.1(b)), under which Transporter is obligated to furnish
LNG Tankers to transport all LNG to be sold and delivered
hereunder.

1.61 Transportation Element
As defined in Section 8.1.

1.62 Transportation Related Amount
As defined in Section 4.5(c).

1.63 Transporter
Burmah Gas Transport Limited which has contracted with
Seller to provide transportation pursuant to the Transportation
Agreement as required by Section 4.1.

1.64 Unloading Ports
The ports at locations in or near Nagoya, Osaka, Himeji
and Kita-Kyushu, and at such other locations in Japan as may be
agreed between Seller and Buyers, where the Receiving Facilities
are or will be constructed.

ARTICLE 2 - SALES AND PURCHASE

Seller agrees to sell and deliver, and each Buyer agrees to
purchase, receive and pay for, and to pay for if not taken, LNG, in
the quantities and at the price and in accordance with the other
terms and conditions set forth in this Contract.

ARTICLE 3 - SOURCES OF SUPPLY

The Natural Gas to be processed into LNG and sold and
delivered hereunder is to be produced from Contract Area "B" in
Sumatra, Indonesia, which is covered by the Mobil production
sharing contract referred to below, and from the Badak field
located in that area of East Kalimantan, Indonesia, covered by
the Huffco Group production sharing contract referred to below.
Seller represents that the production of Natural Gas from
said Contract Area "B' is governed by a production sharing
contract between Seller and Mobil, as contractor, and that the
production of Natural Gas from the said area of East Kalimantan
is governed by a production sharing contract between Seller and
the Huffco Group, as contractor. Under each of such production
sharing contracts, the contractor is entitled to a share of
production, subject to adjustment to give effect to the
contractor cost-recovery provisions thereof, and Seller is
entitled to the balance of such production.
Seller further represents that Seller has the right to sell
all of the quantities of LNG to be sold and delivered hereunder.
In this connection, Seller represents that it has executed supply
agreements with Mobil and the Huffco Group under which Mobil and
the Huffco Group have each made available, for sale and delivery
hereunder, their respective interests in the quantities of the
LNG covered by this Contract to be delivered from the Arun
Facility and the Badak Facility.

ARTICLE 4 - TRANSPORTATION AND UNLOADING

4.1 Transportation Agreement
(a) Seller shall be responsible for the continuous
transportation from the Indonesian Facilities to the Receiving
Facilities of the LNG to be sold and delivered hereunder, and for
this purpose Seller shall take all appropriate steps to secure
full and complete performance by Transporter of its obligations
under the Transportation Agreement. In order to fulfill its
responsibilities for transportation of LNG under this Contract,
Seller has arranged with Transporter in the Transportation
Agreement for Transporter to make time charter or other
arrangements for Substitute LNG Tankers. Seller, after
consultation with Buyers, may employ other LNG Tankers meeting
the requirements of this Contract. However, in the event
additional or replacement LNG Tankers are needed for purposes of
this Contract because of unavailability of LNG Tankers from
Transporter or loss of an LNG Tanker already in service, then
Buyers may offer to Seller other available LNG Tankers.

Each LNG Tanker shall have the following general
specifications:

LNG Tanker Capacity : about 125,000
cubic meters
Total Deadweight : about 64,000 long
tons
Length Overall : about 936 feet
Beam Extreme : about 144 feet
Design Draft fully laden in salt water : about 36 feet - 1
inch

All Substitute LNG Tankers shall be compatible with the
Receiving Facilities, unless such limitation is mutually waived
by Seller and Buyers.

(b) If the Transportation Agreement is amended or
terminated in whole or in part, or if for any other reason new
and/or additional transportation arrangements are required to
fulfill Seller's responsibility for transportation of LNG
hereunder, such amended, new and/or additional transportation
arrangements shall be concluded with the agreement of Seller and
Buyers. Seller shall permit Buyers to participate in
negotiations related thereto. Any decisions by Seller relating
to the use of Substitute LNG Tankers contemplated by the
Transportation Agreement shall be made with the agreement of
Seller and Buyers, which agreement will not be unreasonably
withheld by either Seller or Buyers.

(c) Seller shall use its best efforts to cause Transporter
to take such actions as are reasonably required by Japanese
authorities to evidence responsibility for safe operation of LNG
Tankers in accordance with the letter of the vessel operator
addressed to Japanese port authorities in connection with
permission for LNG Tankers to enter into Unloading Ports ("Safety
Pledge Letter"). Seller shall ensure that Transporter will
arrange for such number and types of fireboats and escort vessels
as are required by the Japanese authorities to attend the LNG
Tankers so as to permit safe and efficient movement of the LNG
Tanker within the maritime safe areas located in the approaches
to and from the Unloading Ports. The cost of such fireboats and
escort vessels shall be included in the Operating Costs of the
Dedicated Vessels and for other LNG Tankers shall be reimbursed
as part of the Transportation Element.

4.2 Notices of LNG Tanker Movements and Characteristics of
LNG Cargoes
(a) With respect to each cargo of LNG to be delivered
hereunder, Seller shall give, or cause the Master of the LNG
Tanker to give, to the Buyer at the Receiving Facility at which
such cargo is to be delivered, the following notices:

(i) A first notice which shall be sent upon the
departure of the LNG Tanker from a Loading
Port and which shall set forth the time and
date that loading was completed, the volume,
expressed in cubic meters, of LNG loaded on
board the LNG Tanker, and the estimated time
of arrival of the LNG Tanker at Buyer's
Unloading Port;

(ii) A second notice which shall be sent
ninety-six (96) hours prior to the estimated
time of arrival of the LNG Tanker at the
Unloading Port;

(iii) A third notice which shall be sent
forty-eight (48) hours prior to the
estimated time of arrival of the LNG
Tanker at the Unloading Port;

(iv) A fourth notice which shall be sent
twenty-four (24) hours prior to the estimated
time of arrival of the LNG Tanker at the
Unloading Port;

(v) A final notice which shall be sent five (5)
hours prior to the estimated time of arrival
of the LNG Tanker at the Unloading Port; and

(vi) A Notice of Readiness which shall be given at
the time prescribed in Section 4.4 (b) below.
(b) Within thirty-six (36) hours after departure of
each LNG Tanker from a Loading Port, Seller shall notify Buyer,
for Buyer's information only, of the following characteristics of
the LNG comprising its cargo as determined at the time of
loading:
(i) the Gross Heating Value per unit, and
(ii) the molecular percentage of hydrocarbon components
and nitrogen.

4.3 Obligations of Buyers at Unloading Ports
Each Buyer shall cooperate with Transporter or its
agent and the
Master of each LNG Tanker directed to an Unloading Port to insure
the continuous and efficient delivery of LNG hereunder. Each
Buyer shall provide a safe berth for prompt berthing of LNG
Tankers at its Receiving Facility and shall operate the Receiving
Facility, or ensure that it is operated, so as to permit
discharge of the cargo of each LNG Tanker as quickly as possible.
During discharge of each cargo of LNG, Buyer shall return to the
LNG Tanker natural gas in such quantities as are necessary for
the safe unloading of the LNG at such rates, pressures and
temperatures as may be required by the LNG Tanker design.

4.4 Demurrage at Unloading Ports
(a) In the event used laytime exceeds allowed laytime
in unloading an LNG Tanker, as provided in paragraph (b) below,
Buyer shall pay to Seller, or for Seller's account if so directed
by Seller, demurrage calculated at an initial daily rate of
U.S.$58,007 or prorated for a portion of a day, subject to
adjustment as provided below, except that the demurrage rate for
Substitute LNG Tankers shall be calculated to reflect the actual
demurrage costs of such Substitute LNG Tankers as agreed by
Seller and Buyers. The amount to be paid for demurrage shall be
adjusted at the time the Transportation Element is adjusted to
reflect changes in Operating Costs in accordance with the
following formula:
U.S.$ 58,007 (Escalating) = U.S.$ 48,154.20
+ U.S.$ 3,764.71 x (Crew + Stores + Subsistence)*
1,280,000 U.S.S/Yr.

+ U.S.$ 4,323.53 x Insurance*
1,470,000 U.S.$/Yr.

+ U.S.$ 1,764.71 x Maintenance and Repairs*
600,000 U.S.$/Yr.

Whenever Seller receives notice from Transporter that the
demurrage rate has been adjusted as contemplated above, Seller
shall promptly send a copy of such notice to each Buyer together
with a statement certified by a firm of certified public
accountants or other appropriate documentation of the calculation
of such adjustment. The adjusted demurrage rate shall become
effective on the date the corresponding Transportation Element
adjustment becomes effective and shall not apply to any demurrage
incurred prior to the date of effectiveness of such adjustment.

(b) Laytime to be allowed at each Unloading Port at which
the LNG Tanker discharges LNG being delivered hereunder shall be
thirty-six (36) consecutive hours extended by any period of delay
which is caused by:

(i) reasons attributable to Seller, the LNG Tanker or
its Master, crew, owner or operator;

(ii) force majeure as defined in Article 15; provided,
however, that delays resulting from the application of
safety regulations or similar governmental action shall not
be considered as an event of force majeure for the purposes
hereof; or

(iii) "Adverse Weather Conditions", which for
purposes hereof means weather and/or sea conditions actually
experienced at the Unloading Port which are sufficiently
severe either: (A) to prevent all LNG Tankers from
proceeding to berth, discharging or departing from berth in
accordance with the weather standards prescribed in the
M.S.A. standard published regulations, including the Safety
Pledge Letters, or (B) to cause an actual determination by
the Master that it is unsafe for the LNG Tanker to berth,
discharge or depart from berth. The period of delay to an
LNG Tanker caused by Adverse Weather Conditions shall not be
considered to extend past the time during which such Adverse
Weather Conditions actually prevailed except where
additional delay is caused by the occupation of the berth by
another LNG Tanker.

Upon arrival of each LNG Tanker at the agreed location off
each Unloading Port, and subject to any mutually agreed time
restrictions, the Master of the LNG Tanker or its agent
shall give Notice of Readiness to Buyer or its agent that
such LNG Tanker is ready to discharge LNG, berth or no
berth. Laytime shall commence upon receipt of Notice of
Readiness and shall continue to run until the LNG Tanker
clears the Unloading Port (i.e., when leaving the Unloading
Port passes the agreed position for tendering Notice of
Readiness). From used laytime calculated as above shall be
deducted all Inward Steaming Time and all Outward Steaming
Time.

For the purposes of this paragraph (b):

(A) "Inward Steaming Time" shall mean the total time
elapsed between Notice of Readiness and "all fast" in berth,
minus the period of any delay or stoppage that prevents the
forward movement of the LNG Tanker to the berth if and to
the extent the total of all such delays or stoppages exceeds
six (6) hours, and

(B) "Outward Steaming Time" shall mean the total of
all hours between the disconnection of the discharge and
return lines and the LNG Tanker clearing the Unloading Port,
minus the period(s) of any delay or stoppage that prevents
the outward movement of the LNG Tanker.

Any delay caused to an LNG Tanker by quarantine at an
Unloading Port (except that related to the presence aboard or
processing of refugees picked up by the LNG Tanker) shall count
as used laytime.

4.5 Effect of Unloading Port Delays: Transportation Costs

(a) Notwithstanding the provisions of Section 11.1, if
the Gross Heating Value of LNG to be delivered hereunder is
higher than the limits set forth in Section 11.1 by reason of
boil-off occurring during a delay in unloading an LNG Tanker of
more than forty-eight (48) hours after Notice of Readiness has
been given, such LNG shall be deemed to have met the quality
specifications of this Contract regarding Gross Heating Value.
(b) If an LNG Tanker is delayed in berthing and/or
commencement of unloading, for reasons other than force majeure
affecting Buyer's Receiving Facility or such LNG Tanker and other
than the fault of the LNG Tanker, its Master, crew, owner or
operator, and if, as a result thereof, the commencement of
unloading is delayed beyond thirty (30) hours after Notice of
Readiness has been given, then for each full hour by which
commencement of unloading is delayed beyond such thirty-hour
period, Buyer shall pay Seller an amount, on account of excess
boil-off equal to the Contract Sales Price multiplied by the
number of MMBTUs per hour by which such boil-off reduces the
aggregate number of BTUs of a full cargo at berth. The hourly
BTU reduction rate to be applied for such purpose shall be
determined by actual boil-off experience as determined at
appropriate intervals.
(c) For purposes of this paragraph (c), the following
amounts shall each be called a "Transportation Related Amount":

(i) Any amount due from Seller to Transporter
pursuant to Section 5.2.(b)(xii) of the
Transportation Agreement relating to the last
Annual Accounting Period under the
Transportation Agreement;

(ii) Any amount due from Seller to Transporter on
account of non-utilization of an LNG Tanker
caused by an event or circumstance of force
majeure affecting a Buyer during the first
ninety (90) days from the commencement
thereof. Such amounts shall not exceed, on a
daily basis, the daily demurrage rate set
forth in Section 4.4(a) (as escalated and in
effect during the period of LNG Tanker non-
utilization); and

(iii) Any amount due from Seller to
Transporter on account of
non-utilization of an LNG Tanker caused
by an event or circumstance of force
majeure affecting a Buyer during any
portion in excess of one hundred and
eighty (180) days. However, such
amounts shall: (A) not exceed, on a
daily basis, the Transporter's
unamortized Financing Costs (prorated on
a daily basis) falling due from time to
time after such 180th day of
non-utilization, and (B) include only
amounts payable for each day of
non-utilization of the LNG Tanker which
precedes the day the circumstance of
Buyer force majeure has ended, or the
day Transporter's unamortized Financing
Costs have been fully paid, whichever is
earlier.

A Transportation Related Amount under either clause (ii) or
(iii) above shall be adjusted downward to reflect any credits to
Seller for other revenues earned by the LNG Tanker during the
period of force majeure.

A Transportation Related Amount shall not include any
amount which becomes payable to Transporter:

(A) as the result of an event or circumstance of force
majeure affecting Seller;

(B) as the result of Seller's breach of its obligations
under this Contract; or

(C) by reason of non-utilization of an LNG Tanker caused by
the fault or negligence of such LNG Tanker or the
Transporter, including, but not limited to, the failure
of Transporter to satisfy Japanese authorities in
connection with permission for LNG Tankers to enter
into Unloading Ports as required pursuant to Section
4.1(c).
If and to the extent that a Transportation Related Amount
has not been paid and is not payable to Seller as part of the
Transportation Element or under any provisions of this Contract,
the Buyer(s) responsible therefor shall pay such Transportation
Related Amount to Seller.

Unless otherwise instructed in writing by Buyers, the total
of any lump sum payments due under Section 5.2.(b) (xii) of the
Transportation Agreement shall be apportioned among and paid by
each of the Buyers concerned in the respective proportions that
each Buyer's Fixed Quantities bear to the aggregate Fixed
Quantities of all concerned Buyers during the last Annual
Accounting Period.

In connection with each payment due under this paragraph
(c), Seller shall furnish to Buyer such available accounting and
other data as may reasonably be required by Buyer to establish
the basis upon which and the manner in which the amount of such
payment is calculated.

Seller shall invoice Buyer for payments under clauses (ii)
and (iii) above every seven (7) days and such invoice shall be
due and payable in accordance with Section 10.3).

Seller shall pay to the Buyers any amounts paid to Seller by
Transporter pursuant to Section 5.2.(b) (xii) of the
Transportation Agreement relating to the last Annual Accounting
Period thereunder. Unless otherwise instructed in writing by
Buyers, such payment shall be apportioned among and paid to each
of the Buyers concerned in the respective proportions that each
Buyer's Fixed Quantities bear to the aggregate Fixed Quantities
of all concerned Buyers during the last Annual Accounting Period.

ARTICLE 5 - ON-SHORE FACILITIES

5.1 Receiving Facilities

Each Buyer shall ensure, at no cost to Seller, that its Receiving
Facilities shall be compatible with the general specifications of
the LNG Tankers as provided for in Section 4.1(a) and shall include
the following:
A. Berthing facilities capable of receiving LNG Tankers
having an overall length of up to 950 feet, a beam of up to
150 feet and a draft of up to 36 feet 6 inches, which the LNG
Tankers can always safely reach, fully laden, and safely
depart, and at which the LNG Tankers can lie safely berthed
and discharge safely afloat at all times.

B. Unloading facilities capable of receiving LNG at a
rate which will permit the discharging of cargo from a fully
loaded LNG Tanker within twelve (12) hours of pumping time at
the full pumping rate specified by the LNG Tanker design.

C. A vapor return line system of sufficient capacity to
transfer to the LING Tankers quantities of natural gas
necessary for the safe unloading of LNG at such rates,
pressures and temperatures as may be required by the LNG
Tanker design.

D. Systems for timely provision of the LNG Tankers with
adequate fresh water and bunker oil, if necessary.

E. Facilities allowing access to the LNG Tankers from
onshore adequate for the handling and delivery of ship's
stores, provisions and spare parts to the LNG Tankers.

F. Shore-based tanks and loading lines for liquid
nitrogen adequate to service the LNG Tankers.

G. LNG storage tanks of adequate capacity to receive
and store a full cargo of LNG upon each scheduled arrival of
an LNG Tanker.

H. Appropriate systems for necessary radio
communications with LNG Tankers.

I. Regasification plant.

5.2 Indonesian Facilities

Seller shall ensure, at no cost to Buyers, that the
Indonesian Facilities shall include the following:

A. Natural Gas transmission pipelines for the delivery
to the liquefaction plants of Natural Gas for processing into
LNG.

B. LNG processing facilities of sufficient capacity to
process Natural Gas into the LNG to be sold and delivered
hereunder.

C. LNG storage tanks of adequate capacity for the
storage of quantities of LNG for subsequent loading on to LNG
Tankers.

D. Berthing facilities capable of receiving LNG Tankers
having an overall length of up to 950 feet, a beam of up to
150 feet and a draft of up to 36 feet 6 inches, which the LNG
Tankers can always safely reach, fully laden, and safely
depart, and at which the LNG Tankers can lie safely berthed
and load safely afloat at all times.

E. Loading facilities capable of loading LNG at a rate
which will permit the full loading of an LNG Tanker within
twelve (12) hours of pumping time.

F. Facilities allowing access to the LNG Tankers from
onshore adequate for the handling and delivery of ship's
stores, provisions, liquid nitrogen and spare parts to the LNG
Tankers.

G. Appropriate systems for necessary radio
communications with LNG Tankers.
ARTICLE 6 - DURATION OF CONTRACT

The terms of this Contract shall continue in effect until the
expiration of the parties' respective obligations to sell and
purchase LNG as provided in Article 7 or the earlier termination of
this Contract pursuant to Section 10.5. If Seller and any Buyer or
Buyers so agree at least five (5) years before the time this
Contract would otherwise expire, the term of this Contract as to
such Buyer or Buyers may be extended on such terms and conditions
as may be mutually agreed.

ARTICLE 7 - QUANTITIES

7.1 Required Deliveries
(a) During each calendar year or portion thereof
specified below (each such period being called a "Fixed
Quantity Period"), Seller shall sell and deliver to each
Buyer, and each Buyer shall purchase, receive and pay for, or
pay for if not taken, at the Contract Sales Price, a quantity
of LNG having a heating value as specified for such Buyer for
such Fixed Quantity Period (each such quantity being called a
"Fixed Quantity") as follows:<PAGE>
<TABLE>
<CAPTION>
CALENDAR FIXED QUANTITY FIXED QUANTITIES FOR
EACH BUYER
YEAR PERIOD (Billions of BTUs)

CHUBU KANSAI KYUSHU NIPPON OSAKA TOHO

TOTAL
ELECTRIC ELECTRIC ELECTRIC STEEL GAS GAS

<S> <C> <C> <C> <C> <C>
<C> <C>
1977 Oct. 18-Dec. 31 6,079.70 1,957.78 1,641.03 1,547.77 7,081.48 -
18,307.76
1978 Full Year 54,792 29,389 37,149 29,387 39,741 -
190,458
1979 Full Year 71,650 67,459 69,063 30,293 45,801 -
284,266
1980 Full Year 87,848 108,520 77,516 31,004 54,260 -
359,148
1981 Full Year 87,850 124,023 77,515 31,006 59,427 -
379,821
1982 Full Year 87,850 124,023 77,515 31,006 67,179 -
387,573
1983 Full Year 117,050 141,543 83,355 31,006 67,179 -
440,133
1984-1986 Each Full Year 117,050 132,783 86,275 31,006 67,179 -
434,293
1987-1997 Each Full Year 111,210 132,783 80,435 28,066 67,179 2,940
422,613
1998 Full Year 111,210 132,783 80,435 - 67,179 2,940
394,547
1999 Full Year 111,210 132,783 - - 67,179 - 311,172

/TABLE
<PAGE>
The above Fixed Quantities are subject to adjustment as
provided in Section 7.3 (a). After giving effect to any such
adjustment the term "Fixed Quantity" shall mean the applicable
Fixed Quantity as so adjusted, and the respective obligations of
Seller to sell and deliver, and each Buyer to purchase, receive
and pay for, or pay for if not taken, Fixed Quantities of LNG in
any Fixed Quantity Period, shall apply to the applicable Fixed
Quantities as so adjusted.
(b) In the event Seller is able to obtain an extension of
Dedicated Vessel availability, Seller shall so advise each Buyer
and, if Seller and Buyer mutually agree in writing, additional
Fixed Quantity Periods for such Buyer may be designated to
continue during such extended Dedicated Vessel availability.
During such additional Fixed Quantity Periods, Seller shall sell
and deliver and such Buyer shall purchase, receive and pay for,
or pay for if not taken, at the Contract Sales Price, such
quantities of LNG as shall have been designated as Fixed
Quantities for such Fixed Quantity Periods by mutual agreement of
Seller and Buyer.
7.2 Single-Port Cargoes: Reallocation of Cargoes: Rate of
Deliveries
(a) All deliveries of LNG by Seller and receipt thereof by
a Buyer shall be made in fully loaded LNG Tanker lots comprised
solely of LNG from the Arun Facility or the Badak Facility and,
except as provided in paragraph (c) below, each LNG Tanker shall
be unloaded at a single Receiving Facility in Japan.

(b) Each Buyer, upon appropriate notice to Seller,
may reallocate all of an LNG Tanker cargo from one Buyer to
another Buyer and/or from one Receiving Facility to another, and
also may reallocate any part of an LNG Tanker cargo from one
Buyer to another within one Receiving Facility.
In case of such reallocation, the ownership of such cargo
or part thereof shall be transferred directly from Seller to the
new Buyer in place of the original Buyer, but the respective
Fixed Quantities of the Buyers concerned shall not be changed and
the cargo in question shall be deemed to be received by the
original Buyer in connection with its take or pay obligations
under Section 7.3(a).
Each such reallocation shall be documented in a form to be
established by Seller and Buyers, executed by the original Buyer
and the Buyer which will actually receive the cargo, which
document will provide that the receiving Buyer will assume and be
responsible to Seller for performance of the obligations of the
original Buyer in respect of such cargo, and that such cargo is
deemed to be taken by the original Buyer in connection with its
take or pay obligations under Section 7.3(a).
Buyers will exercise the right to reallocate cargoes in a
manner that will not materially disrupt the shipping schedules.

(c) In addition to paragraph (b) above, upon reasonable
advance notice to Seller from the Buyer concerned, in case of
emergency, Seller and Buyers may reallocate all or any part of an
LNG Tanker cargo from one Receiving Facility to another, if such
change would not materially disrupt the shipping schedules.

(d) Within each Fixed Quantity Period the quantities to be
delivered by Seller and received by each Buyer from the
Indonesian Facilities shall be delivered at rates and intervals
and in quantities which are reasonably constant over the course
of such Fixed Quantity Period and give effect to the maintenance,
downtime and shipping schedules provided for in Article 12, so as
to assure, as nearly as possible, continuous full utilization of
the LNG Tankers, even production rates of each of the Indonesian
Facilities, and even rates of deliveries at each Buyer's
Receiving Facility.
7.3 Buyer's Obligation to Take or Pay
(a) If, during any Fixed Quantity Period, any Buyer should
fail to take the full Fixed Quantity applicable thereto, such
Buyer shall pay Seller, at the Contract Sales Price in effect as
of the last day of such Fixed Quantity Period, for the quantities
of LNG required to be purchased but which were not taken by such
Buyer during such Fixed Quantity Period (any such quantity
deficiency being called a "Quantity Deficiency"), subject,
however, to paragraphs (b), (c) and (d) below and the following:

(i) If, after taking into account all adjustments provided
for in this Section 7.3 including any Allowance that
has been exercised, there remains a Quantity Deficiency
for a Buyer at the end of any Fixed Quantity Period,
such Buyer may carry forward and add to the Fixed
Quantity for the next succeeding Fixed Quantity Period:
(A) the full amount when such Quantity Deficiency
amounts to less than a full LNG Tanker cargo lot;
or

(B) any fractional portion of a cargo when the
Quantity Deficiency exceeds one fall LNG Tanker
cargo lot.

Amounts so carried forward shall not be included in
such Quantity Deficiency.
(ii) If, at the end of any Fixed Quantity Period, a
Buyer has purchased and received quantities of
LNG hereunder in excess of the Fixed Quantity of
such Buyer for such Fixed Quantity Period other
than Make-Up LNG, Make-Good LNG, or Restoration
Quantities, the excess shall be applicable to
reduce the Fixed Quantity of such Buyer for the
next succeeding Fixed Quantity Period.
(b) The obligation (set forth in paragraph (a) above) of
each Buyer with regard to any Fixed Quantity Period to pay for
Fixed Quantities not taken shall be reduced by the quantity of
LNG which such Buyer was unable to purchase because of an event
of force majeure as defined in Article 15 affecting either Seller
or such Buyer or because of Seller's failure for any other reason
to make such quantity available for sale in accordance with this
Contract.
(c) In calculating the quantity of LNG delivered by Seller
and purchased by a Buyer for each Fixed Quantity Period,
quantities delivered and purchased within the first seven (7)
days of the next following Fixed Quantity Period shall be
included, provided such quantities were scheduled in the Annual
Program for the Fixed Quantity Period with respect to which the
calculation is being made.
(d) The obligation of a Buyer pursuant to paragraph (a)
above to pay for quantities not taken may be reduced by the
exercise of an Allowance as follows:

(i) Each Allowance must be exercised by notice in
writing given to Seller by Buyers' Coordinator,
which will act as agent for Buyers in connection
with the exercise of all Allowances. A notice of
the exercise of an Allowance given by Buyers'
Coordinator shall be deemed to have both the
authority of the Buyer on whose behalf it is
expressed to be given (the "Exercising Buyer")
and the consent of all other Buyers. No
purported direct exercise of an Allowance by a
Buyer shall be valid. A notice of exercise of an
Allowance must be received by Seller on or before
January 12 of the year following the Fixed
Quantity Period in respect of which such
Allowance is exercised.

(ii) Each notice of exercise of an Allowance shall
specify the ExercisingBuyer and the quantity of
LNG by which such Buyer's obligation to take
and/or pay during the relevant Fixed Quantity
Period is to be reduced.

(iii) No Allowance can be exercised which would
result in the aggregate Allowances then
outstanding for all Buyers being in excess of
21,131 billion BTUs; provided, however, that,
without accelerating the Make-Good Obligation
for any Allowance(s) exercised in an earlier
year, the limit on aggregate Allowances
outstanding for all Buyers shall be reduced
during the 1998 and 1999 Fixed Quantity
Periods to five percent (5%) of the total
Fixed Quantities for all Buyers for the
relevant of such Fixed Quantity Periods.
Subject to the provisions of subparagraph
(viii) below, an Allowance (or portion
thereof) is outstanding until either the
Make-Good Obligation pursuant to subparagraph
(iv) below is satisfied, or payment in
respect thereof is made pursuant to
subparagraph (vi) below.

(iv) Each Allowance shall be made good in full (even
if it amounts to a fractional portion of a full
cargo lot) by the purchase of an equal quantity
of LNG excess of Fixed Quantities ("Make-Good
LNG") within a period ("Allowance Restoration
Period") commencing January 1 of the year
following the Fixed Quantity Period in relation
to which such Allowance was exercised and ending
with the earlier of the expiration of five (5)
calendar years or the expiration of three (3)
months following the end of the last Fixed
Quantity Period for the Buyer concerned. No
Buyer may satisfy a Make-Good Obligation or any
part thereof during a Fixed Quantity Period until
it shall first have taken its Fixed Quantity for
such Fixed Quantity Period. If a Buyer has more
than one Allowance outstanding the Make-Good
Obligations in respect thereof shall be satisfied
in the same chronological order in which such
Allowances were exercised. One or more Buyers
may satisfy the Make-Good Obligation with respect
to an Allowance exercised by another Buyer.

(v) Every request for Make-Good LNG shall be made by
Buyers' Coordinator on behalf of a named Buyer in
accordance with Section 12.1 and shall specify
the Allowance to which it relates. Each such
request shall be deemed to have the authority of
the named Buyer and, if the named Buyer is not
the Fxercising Buyer, of the Exercising Buyer.

(vi) If at the expiration of the Allowance Restoration
Period a Make-Good Obligation has not been
satisfied in full, the Exercising Buyer (whether
or not a Buyer other than the Exercising Buyer
was named in any relevant request for Make-Good
LNG) shall pay for any unsatisfied portion of the
Make-Good Obligation at the Contract Sales Price
in effect as of the last day of such Allowance
Restoration Period. The Buyer shall have the
right to request Make-Up LNG pursuant to Section
7.5 with respect to any such payment.

(vii) Seller shall not be obligated to reserve any
LNG production or shipping capacity for the
purposes of permitting Buyers to satisfy
Make-Good Obligations.

(viii) In the event that Buyers' Coordinator
requests quantities of LNG to satisfy a
Make-Good Obligation on behalf of a Buyer or
Buyers which Seller is unable to make
available for any reason, including force
majeure, the following provisions shall
apply:

(A) The Exercising Buyer shall be relieved from
the obligation pursuant to subparagraph (vi)
above to pay for such requested quantities as
of the expiration of the Allowance
Restoration Period relating thereto, except
in the case where subparagraph (viii)(C)
below requires such payment;

(B) Such requested quantities shall be deemed not
outstanding for the purposes of subparagraph
(iii) above until Seller shall (whether
during or after the Allowance Restoration
Period) have offered the same to such Buyer
but shall then be outstanding if such Buyer
does not accept such offer; any change in the
quantity outstanding due to a failure to
accept such an offer shall not result in an
acceleration of any then outstanding
Make-Good Obligations; and

(C) Such requested quantities shall be scheduled
for delivery at any time prior to the
expiration of three (3) months following the
last Fixed Quantity Period for the Buyer
having the Make-Good Obligation as mutually
agreed by Seller and such Buyer. If such
requested quantities have not been scheduled
as of the end of the last Fixed Quantity
Period and should Seller be unable to deliver
such requested quantities during the three
(3) months following the last Fixed Quantity
Period, Buyer shall have no further
obligation in respect thereof. If Seller
gives Buyer reasonable notice that such
requested quantities are available during
such three-month period but Buyer does not
take such quantities, Buyer shall then make
the payment required under subparagraph (vi)
above.
(e) (i) The Transportation Element of the Contract Sales
Price payable for quantities required to be paid
for but not taken pursuant to paragraph (a) above
(the "Take-or-Pay Transportation Amount") shall
be reduced by an amount equal to the demurrage
payments made by such Buyer during such calendar
year under Section 4.4(a) if and to the extent
that corresponding demurrage payments by Seller
under Section 9.1 of the Transportation Agreement
result in a credit against the Required Minimum
Payment by Seller for such calendar year under
Section 4.2.(e) of the Transportation Agreement.

(ii) To the extent the amount of demurrage allowable
to reduce the Take-or-Pay Transportation Amount
for any Buyer under paragraph (i) above exceeds
the Take-or-Pay Transportation Amount of such
Buyer, such excess shall be allocated among those
Buyers that have a Take-or-Pay Transportation
Amount remaining after the application of
paragraph (i) above in proportion to each such
Buyer's share of the total remaining obligation
to pay Take-or-Pay Transportation Amounts and, as
so allocated can be used by such Buyers to
further reduce their respective Take-or-Pay
Transportation Amounts.

7.4 Allocation of Deliveries between Buyers and Other
Purchasers
(a) Whenever deliveries of LNG by Seller under this
Contract must be reduced by reason of an event or
circumstance of force majeure as defined in Article 15
affecting Seller's ability to produce or load LNG from
either the Arun Facility or the Badak Facility, an
allocation of quantities then available for sale from the
Indonesian Facility so affected will be made between Buyers
and other purchasers of LNG from such Indonesian Facility.
At such times the total quantities available for sale from
such Indonesian Facility shall be allocated among the
purchasers therefrom (including the Buyers) pro rata in the
ratio of their respective quantities which are eligible for
allocation as provided below. The quantities eligible for
such allocation shall, as to Buyers, be the portion of the
Fixed Quantities to be purchased hereunder during the
period of such force majeure from such Indonesian Facility
so affected (such portion to be determined by multiplying
the Fixed Quantities for such period by the percentage of
the total quantities scheduled for delivery in the Annual
Program for the Fixed Quantity Period during which the
event or circumstance of force majeure first occurred which
are to be delivered from the Indonesian Facility so
affected) and, as to other purchasers, be those fixed or
contract quantities of LNG which are committed for sale
from such Indonesian Facility so affected during the period
of such force majeure in satisfaction of Seller's contracts
with other purchasers which provide for sales of LNG from
such Indonesian Facility over a term of at least fifteen
(15) years.
(b) If such an event of force majeure does not
preclude full production and loading of all Fixed
Quantities under the allocation formula described in
paragraph (a) above, but is of such an extent as to prevent
Seller from producing and loading all Make-Up LNG,
Make-Good LNG and Restoration Quantities scheduled for
delivery from the Indonesian Facility so affected to Buyers
and equivalent quantities scheduled for delivery from such
Indonesian Facility to other purchasers under LNG sales
contracts providing for deliveries over a term of at least
fifteen (15) years, quantities of such LNG as are available
shall be allocated between Buyers and such other purchasers
in proportion to the respective quantities so scheduled.

7.5 Take-or-Pay Make-Up
If pursuant to Section 7.3(a) or Section 7.3(d)(vi) a Buyer
shall have paid for any quantity of LNG which was not taken by
such Buyer ("Take-or-Pay Quantity"), then in any subsequent year
the said Buyer may purchase up to an equal quantity of LNG from
Seller as make-up LNG ("Make-Up LNG") (to the extent not
previously made up). A Buyer may request Make-Up LNG by lgiving
written notice to Seller as provided in Section 12.1. If, during
any year for which Make-Up LNG has been requested, (i) Seller has
uncommitted quantities of LNG available for such purpose, (ii)
Seller has available LNG Tanker capacity which may be used to
transport such Make-Up LNG, and (iii) such Buyer shall have first
taken and paid for its Fixed Quantity for such year, then Seller
shall sell and deliver to such Buyer the quantity of Make-Up LNG
requested; provided, however, that after the expiration of three
(3) months following the end of the last Fixed Quantity Period
for the Buyer concerned such Make-Up LNG shall only be made
available if either: Seller has at the time uncommitted shipping
capacity available for the purpose, or the Buyer provides
transportation. A Buyer's right to purchase Make-Up LNG under
this Section 7.5 shall expire on December 31, 2000 unless such
Buyer shall have requested Make-Up LNG during the year 2000 and
Seller shall have had insufficient uncommitted LNG to meet such
request. In such circumstances, the parties shall consult to
agree upon a deferred schedule for Buyer to take delivery of any
outstanding balance of Takeor-Pay Quantity not made up by
December 31, 2000. Each Buyer shall pay for Make-Up LNG at the
Contract Sales Price in effect as of the date of delivery,
reduced by the amount previously paid on account of all or that
part of the Take-or-Pay Quantity being made up by such sale.
Take-or-Pay Quantities shall be made up, and prior payments
applicable thereto applied, in the same chronological order in
which such quantities accrued.
7.6 Force Majeure Deficiency
If during any Fixed Quantity Period or Fixed Quantity
Periods all or any portion of the Fixed Quantity of LNG required
to be taken by any Buyer therein is not delivered by Seller or
taken by such Buyer by reason of force majeure as defined in
Article 15 (any such quantity not taken for such reason being
called a "Force Majeure Deficiency"), Seller and the Buyer or
Buyers concerned shall each make best efforts to restore the
Force Majeure Deficiency in full by Seller selling and the Buyer
or Buyers purchasing such quantities of LNG prior to the
expiration of the last Fixed Quantity Period for such Buyer(s)
concerned. The restoration quantities so agreed ("Restoration
Quantities") will be scheduled for delivery pursuant to Article
12 at the mutual convenience of the parties. Such Restoration
Quantities shall be subordinate to Make-Good LNG requested
pursuant to Section 7.3(d) and Make-Up LNG requested pursuant to
Section 7.5.
7.7 Allocation for Make-Good LNG, Make-Up LNG and
Restoration Quantities
Whenever Make-Good LNG is requested under Section 7.3(d),
MakeUp LNG is requested under Section 7.5 and/or Restoration
Quantities are requested under Section 7.6 by a Buyer or Buyers,
and quantities are requested for similar purposes by other
purchasers from one or both of the Indonesian Facilities under
contracts which provide for sales of LNG over a term of at least
fifteen (15) years, and uncommitted quantities of LNG are not
available from such Indonesian Facilities to meet all such
requests, then the quantities of LNG which are available from
such Indonesian Facilities for such purposes shall be allocated,
as between such Buyer or Buyers on the one hand and such other
purchasers on the other hand, based on the proportion of the
contract quantities of each requesting purchaser to the total of
the contract quantities of all of the requesting purchasers.
7.8 Order of Priority of Make-Good LNG and Make-Up LNG
Make-Good LNG requested under Section 7.3(d) and Make-Up
LNG requested under Section 7.5 shall be delivered in the
priority specified by Buyers' Coordinator.
ARTICLE 8 - CONTRACT SALES PRICE

8.1 Formula Calculation of Price

The initial contract sales price applicable, as of December
3, 1973, to
the quantities of LNG to be sold and delivered at the Delivery
Point, and to any quantities of LNG required to be taken but
which are not taken and are required to be paid for by a Buyer
under this Contract, expressed in United States Dollars per
million British Thermal Units (U.S.S/MMBTU), shall be U.S.$1.29
(the "Initial Contract Sales Price"), of which U.S.$O.30 is the
deemed cost of transportation (the "Transportation Element") and
the balance of U.S.$O.99 is the LNG element (the "LNG Element").
The Transportation Element and the LNG Element are subject
to adjustment from time to time according to the following
provisions of this Article 8, and the sum thereof as adjusted and
in effect at any time shall be the contract sales price (the
"Contract Sales Price") which is in effect hereunder at such
time.

8.2 LNG Element
The LNG Element included in the Contract Sales Price as
adjusted from time to time shall always be the higher of the two
values calculated under paragraph (a) (the "Minimum LNG Element")
and paragraph (b) (the "Market Value LNG Element") below. Such
adjustments of the Contract Sales Price by reason of a chance in
the LNG Element shall be calculated and made at the times and in
the manner hereinafter specified:

(a) A Minimum LNG Element calculation shall be made
annually, as of the first day of January of each year commencing
with January 1, 1975, in accordance with the following formula:
Pn = Po ( 1 + 0.03 )n
in which

Pn = the Minimum LNG Element (as expressed in U.S.$/MMBTU).
Po = the LNG Element (U.S.$O.99) included in the Initial
Contract Sales Price.
n = 1 on January 1, 1975 and one higher whole number on
each subsequent January 1.

If the Minimum LNG Element calculated as of any January 1 is
higher than the Market Value LNG Element (as last calculated
pursuant to paragraph (b) below, including calculation as of such
January 1), then the Contract Sales Price shall be LNG Element
therein adjusted as of such January 1 by including such Minimum
LNG Element therein as the LNG Element.

(b) A Market Value LNG Element calculation shall be made as of
the first day of January of each year commencing with January 1,
1975, and thereafter as of each effective date on which either:
(i) the realized export prices of more than one of the field
classifications of Indonesian crude oils sold by Pertamina shall
have changed from the respective prices therefor included in the
last preceding calculation made pursuant to this paragraph (b);
or (ii) two or more field classifications of such crude oils
shall have been added to or deleted from the crude oils being
sold by Pertamina, since the date of the last preceding
calculation made pursuant to this paragraph (b); in each case
such calculation to be made in accordance with the following
formula:
PA = 9 Po - A + 1 Pn
10 U.S.$6.00 10

in which

PA = the Market Value LNG Element (as expressed in
U.S.$/MMBTU).

Po = the LNG Element (US $O.99) included in the
Initial Contract Sales Price.

A = the arithmetic average of the realized export
prices in U.S. Dollars per barrel, f.o.b.
Indonesia, of all Indonesian crude oils then
being sold by Pertamina, except such prices for
spot sales.

Pn = Pn as then in effect under paragraph (a) above.

Satisfactory procedures for verifying changes in the
realized export prices of all Indonesian crude oils shall be
agreed upon by Buyers and Seller in a separate memorandum.

If the Contract Sales Price in effect immediately prior to
the date of such calculation of the Market Value LNG Element
would change by including such recalculated Market Value LNG
Element as the LNG Element therein, then the Contract Sales Price
shall be adjusted as of and from such date by so including such
Market Value LNG Element, provided that no such adjustment shall
use an LNG Element which is less than the Minimum LNG Element
calculated as of the January 1 which coincides with or last
precedes the date of such adjustment.
8.3 Transportation Element.
The Transportation Element included in the Contract Sales
Price as adjusted from time to time shall initially be the
Transportation Element included in the Initial Contract Sales
Price, as specified in Section 8.1, and shall later be as
adjusted from time to time pursuant to this Section 8.3, provided
that during any period that Substitute LNG Tankers are employed
by Transporter, the Transportation Element shall be calculated as
provided in Section 8.4. The Transportation Element will be
adjusted according to the formula set forth below, and as
adjusted will be effective as of the following dates:
(i) annually as of each April 1, on account of adjustment
of Operating Costs, which adjustment is to be made
based on a written statement of the estimated average
per vessel Operating Costs of Dedicated Vessels; and

(ii) as of each other date on which a Substitute LNG
Tanker enters or leaves service if the freight
rate payable for such Substitute LNG Tanker is
higher or lower than the freight rate applicable
to a Dedicated Vessel, or on which a Dedicated
Vessel enters or leaves service if immediately
preceding such event any such Substitute LNG
Tanker was in service.

Each adjustment of the Transportation Element shall be
calculated according to the following formulas:
TEx = Tx-Y
Tx = T(x-l) . CFx
CF(x- 1)

in which:

TEx = the adjusted Transportation Element (as expressed
in U.S.$/MMBTU).

TX = the adjusted transportation factor (as expressed
in U.S.$/MMBTU).

Y = U.S.$O.0212/MMBTU, the amount of sharing by
Seller.
T(x-l) = the initial transportation factor
(U.S.$O.3624 in the case of the first
adjustment) or Tx as last determined to be
the adjusted transportation factor under this
Section 8.3 (in the case of each subsequent
adjustment).

CFx = the total amount in U.S. Dollars which Seller is
required to pay Transporter for transportation of
the total quantities of LNG which, Seller and
Transporter have agreed in Exhibit A to the
Transportation Agreement (without prejudice to
the right of Seller in its discretion to vary the
proportion of the quantities of LNG to be
delivered from the Arun Facility or the Badak
Facility), will be shipped during the period of
twelve (12) full calendar months which commences
as of the date of the adjustment being calculated
(or as of the first day of the next month, if the
adjustment date is not the first day of the
month), giving effect to the increased or
decreased transportation costs per vessel which
become effective as of the Transportation Element
adjustment date.

CF(x-1) = the total amount in U.S. Dollars which Seller
would have been required to pay Transporter
for transportation of the same total
quantities of LNG during the same twelve
month period used in CFx, if no change in
transportation costs per vessel had occurred
from the level reflected in the last
Transportation Element adjustment.

As of the date of each adjustment of the Transportation
Element, the Contract Sales Price shall be adjusted by including
therein the adjusted Transportation Element. In connection with
each adjustment of the Transportation Element, Seller shall
furnish to Buyers such available accounting and other data as may
reasonably be required by Buyers to establish the basis upon
which and the manner in which such adjustment is calculated.
Seller shall permit Buyers to review the reasonableness of the
current year estimated Operating Costs and prior year results in
conjunction with Seller's review as provided for in the
Transportation Agreement shall use its best efforts to provide
Buyers full access to periodic review procedures of Transporter's
operation established thereunder, and, in consultation and
agreement with Buyers, shall appoint independent auditors to
audit Transporter's Operating Costs pursuant thereto. Seller,
independently, or at Buyers' request, shall challenge the
inclusion of any unreasonable or unjustified item or amount that
affects the freight rate under the Transportation Agreement.
Should the Transporter persist in including the challenged
amount, Seller and Buyers shall consult on the course of action
to be followed.

8.4 Substitute LNG Tanker Adjustment

Whenever a Substitute LNG Tanker is in service at a cost to
Seller different from the cost of a Dedicated Vessel, the
Transportation Element shall be calculated as follows:

(A) determine a transportation factor for each such
Substitute LNG Tanker using following formula:
TF = Tx . SFx
CFx

where:
TF = transportation factor.

Tx = the current value of Tx as calculated under
Section 8.3.

CFx = the current value of CFx as calculated under
Section 8.3.

SFx = the total amount in U.S. Dollars that would be
paid if the same quantities used to calculate CFx
were transported at the unit cost at the
Substitute LNG Tanker, but the cost of the
Substitute LNG Tanker shall be adjusted to
exclude any payments by Seller related to
non-utilization (unless caused by one or more
Buyers) and to credit any other amounts received
by Seller in connection with the unavailability
of a Dedicated Vessel.

(B) The Transportation Element shall be determined by using
an adjusted Tx, calculated as the average of Tx determined for
Dedicated Vessels under Section 8.3 (weighted by the number of
Dedicated Vessels in service) and the transportation factor of
each Substitute LNG Tanker in service.

ARTICLE 9 - TRANSFER OF TITLE

The LNG to be sold by Seller and purchased by each Buyer
hereunder shall be delivered to such Buyer into its Receiving
Facility at an Unloading Port. Delivery shall be deemed
completed and title and risk of loss shall pass from Seller to
such Buyer as the LNG reaches the Delivery Point.

ARTTCLE 10 - INVOICES AND PAYMENTS

10.1 Invoice and Cargo Documents
Promptly after completion of unloading of a LNG Tanker,
Seller, or its representative, shall furnish to the receiving
Buyer, or its representative, a certificate of volume unloaded
together with such other documents concerning the cargo as may be
reasonably requested by Buyers for the purpose of Japanese
customs clearance. The receiving Buyer shall complete laboratory
analysis to determine quality and BTU content of the LNG as soon
as possible but not later than forty-eight (48) hours after the
completion of unloading.

Promptly upon completion of such analysis, Seller or its
representative shall by telex or telegram to the receiving Buyer
an invoice, stated in U.S. Dollars, in the amount of the Contract
Sales Price for the number of BTUs delivered. At the same time
Seller shall send to the receiving Buyer a signed copy of the
invoice together with relevant documents setting forth the basis
for the calculation thereof.
If the receiving Buyer has not completed the above
mentioned quality and BTU analysis within the forty-eight hour
period mentioned above, Seller may furnish a provisional
commercial invoice based upon the typical BTU content and typical
mole composition analysis of LNG then being delivered to Buyer,
and such provisional invoice shall be payable on the due date
specified in Section 10.3 subject only to any later adjusting
payment which may be called for when the aforesaid analysis has
been completed.

10.2 Other Invoices
In the event any amount is due from any Buyer to Seller,
including, without limitation, amounts payable pursuant to
Section 7.3(a) on account of Fixed Quantities of LNG required to
be purchased but which were not taken by such Buyer, Seller shall
furnish or cause to be furnished to such Buyer an invoice
therefor and relevant documents showing the basis for the
calculation thereof. The procedure set forth in Section 10.1 for
sending a copy of such invoice by telex or telegram may be
followed.

10.3 Invoice Due Dates, etc.
Each invoice for LNG delivered to a Buyer referred to in
Section 10.1 shall become due and payable by such Buyer on the
fifth (5th) Business Day in Japan after the date on which the
telex/telegraphic copy of such invoice has been received by such
Buyer in Japan. For this purpose a telex/telegraphic copy of an
invoice shall be deemed received by Buyer in Japan on the next
Business Day in Japan following the day on which it was sent.
Each other invoice to a Buyer referred to in Section 10.2
shall become due and payable by such Buyer within twenty (20)
calendar days after the date of such Buyer's receipt of such
invoice in Japan.
If any invoice due date is not a Business Day in Japan,
such invoice shall become due and payable on the next day which
is a Business Day in Japan.
In the event the full amount of any invoice is not paid
when due, any unpaid amount thereof shall bear interest from the
due date until paid, at an interest rate, compounded annually,
two percent (2%) greater than the rate or rates being charged
during the period of delinquency by Citibank, N.A., New York, New
York, to its prime commercial customers for 90-day loans, except
that any portion of the invoice representing payment due
Transporter under the Transportation Agreement shall bear
interest at a rate one percent (1%) greater than such prime
commercial rate. Such interest rates shall be adjusted up or
down as the case may be, to reflect any changes in the aforesaid
prime rate as of the dates of such changes in the prime rate. In
the event that Citibank, N.A shall for any reason cease quoting a
prime rate as described above, then a comparable rate shall be
determined using rates then in effect and shall be used in place
of the said prime rate.
10.4 Payment
Each Buyer shall pay, or cause to be paid, in U.S. Dollars
all amounts which become due and payable by such Buyer pursuant
to any invoice issued hereunder to a bank account or accounts in
the United States to be designated by Seller. Buyer shall not be
responsible for such bank's disbursement of amounts remitted by
Buyer to such bank, and Buyer's deposit in immediately available
funds of the full amount of each invoice with such bank shall
constitute full discharge and satisfaction of the obligations
under this Contract for which such amounts were remitted. Each
remittance from a Buyer to such bank which represents amounts
payable for LNG delivered from the Arun Facility or for LNG
required to be purchased but not taken from the Arun Facility
shall be so designated by such Buyer based on Seller's invoice at
the time of such remittance. Each remittance from a Buyer to
such bank which represents amounts payable for LNG delivered from
the Badak Facility or for LNG required to be purchased but not
taken from the Badak Facility shall be so desipated by such Buyer
based on Seller's invoice at the time of such remittance. Each
payment by a Buyer of any amount owing hereunder shall be in the
full amount due without reduction or offset for any reason
including without limitation Japanese taxes, exchange charges or
bank transfer charges.

Transfer of funds to the bank in the United States effected
from Japan before the close of business in Japan on or before the
due date of any invoice shall be deemed timely payment
notwithstanding that such U.S. bank cannot credit such transfer
as ready funds for a period of up to fourteen (14) hours by
reason of the time difference between Japan and the United
States, or for one or more days which are not banking days in the
United States.

10.5 Seller's Rights Upon Buyers' Failure to Make
Payment

If payment of any invoice for quantities of LNG delivered
hereunder or for Fixed Quantities of LNG not taken and for which
a Buyer is obligated to pay pursuant to this Contract is not made
within sixty (60) days after the due date thereof, Seller shall
be entitled, upon living thirty (30) days written notice to such
Buyer, to suspend subsequent deliveries to such Buyer until the
amount of such invoice and interest thereon has been paid, and
such Buyer shall not be entitled to any make-up rights in respect
of such suspended deliveries. If any such invoice is not paid
within one hundred and twenty (120) days after the due date
thereof, then, subject to the further provisions of this Section
10.5, Seller shall have the right, at Seller's election, upon not
less than eighty (80) days notice to Buyer or Buyers, as the case
may be, to exercise either of the following options:
(i) Seller may terminate this Contract in respect of the
defaulting Buyer only, in which event this Contract
shall continue in effect between Seller and the other
Buyers just as though the defaulting Buyer had never
been a party and the quantities of LNG to be purchased
and received by such defaulting Buyer had never been
included in this Contract; or

(ii) Seller may terminate this Contract in its
entirety as to Buyers, unless prior to such
termination, arrangements shall have been made
which are satisfactory to Seller, for the payment
of all amounts owed Seller by the defaulting
Buyer, and for the assumption of the LNG quantity
and other obligations of the defaulting Buyer
under this Contract by one or more Buyer(s) not
defaulting.

Termination by Seller under clause (i) or (ii) above shall become
effective upon receipt by each Buyer of notice from Seller to
such effect. Any such termination shall be without prejudice to
any other rights and remedies of Seller arising hereunder or by
law or otherwise including the right of Seller to receive payment
of all obligations and claims which arose or accrued prior to
such termination or by reason of such default by a Buyer or
Buyers.

10.6 Disputed Invoices

In the event of disagreement concerning any invoice,
the Buyer shall
make provisional payment of the total amount thereof and shall
immediately notify Seller of the reasons for such disagreement,
except that:
(i) in the case of obvious error in computation Buyer shall
pay the correct amount disregarding such error; and

(ii) in the case of any disputed invoice for demurrage
incurred at an Unloading Port, Buyer's
provisional payment shall be ninety percent (90%)
thereof or such greater amount as is not disputed
by Buyer.

Invoices may be contested by Buyer or modified by Seller, only
if, within a period of ninety (90) days after Buyer's receipt
thereof, Buyer serves on Seller notice questioning their
correctness. If no such notice is served, invoices shall be
deemed correct and accepted by both parties. Promptly after
resolution of any dispute as to an invoice, the amount of any
overpayment or underpayment shall be paid by Seller or Buyer to
the other, as the case may be.

ARTICLE ll - QUALITY

11.1 Gross Heating Value

The LNG when delivered by Seller to Buyers shall have,
in gaseous state, a Gross Heating Value of not less than 1070 BTU
per Standard Cubic Foot and not more than 1170 BTU per Standard
Cubic Foot. The expected range will be between 1110 and 1165 BTU
per Standard Cubic Foot.

11.2 Components

The LNG delivered by Seller to Buyers shall, in a
gaseous state, contain not less than eighty-five molecular
percentage (85 MOL%) of methane (CH4) and, for the components and
substances listed below, such LNG shall not contain more than the
following:

A. Nitrogen (N2), 1.0 MOL%.
B. Butanes (C4) and heavier, 2.00 MOL%.
C. Pentanes (C5) and heavier, 0.10 MOL%.
D. Hydrogen sulfide (H2S), 0.25 grains per 100 Standard
Cubic Feet
(0.25 grains/100scf).
E. Total sulfur content, 1.3 grains per 100 Standard Cubic
Feet (1.3 grains/100scf).

Although the LNG which Seller delivers to Buyers is
permitted to contain the sulfur concentrations shown in clauses D
and E above, under normal operating conditions at the Indonesian
Facilities, Seller would expect such concentrations to be
materially less.
ARTICLE 12 - PROGRAMMING AND SHIPPING MOVEMENTS

12.1 Annual Programs
(a) Not later than ninety (90) days prior to the
beginning of each calendar year, Seller shall give written notice
to Buyers of the anticipated quantities of LNG to be available
for delivery hereunder from the Arun Facility and the Badak
Facility, respectively, in each calendar quarter of the next
calendar year, taking into consideration the projected capacity
of each of such Indonesian Facilities. On or before October 15
of each year in which such notice is given, each Buyer shall
advise Seller in writing of the quantities such Buyer wishes to
take during each calendar quarter of the following year,
specifying the amount of any Make-Up LNG requested pursuant to
Section 7.5 and any Restoration Quantities in excess of Fixed
Quantities requested pursuant to Section 7.6. In addition, by
October 15 of each year Buyers' Coordinator shall request any
Make-Good LNG pursuant to Section 7.3 (d).

Seller and Buyers shall thereupon consult together and
agree by December 1st of the same year upon a programming
schedule of quantities to be delivered from each of such
Facilities to each Receiving Facility during each calendar month
during the following year (the "Annual Program"), which shall
take into consideration the anticipated capacity of the parties'
respective facilities, the Coordinated Maintenance Schedule and
the shipping schedules. Such Annual Program and the Ninety-Day
Schedules referred to below (and any revisions thereof) are
intended to assist the parties in planning their respective
operations during the periods involved. The content of the
Annual Program and Ninety-Day Schedules shall not reduce the
entitlement of any party during any Fixed Quantity Period to
sell, deliver and be paid for, or to purchase and receive, as the
case may be, the quantities of LNG required under Article 7 to be
sold, delivered and paid for during such Fixed Quantity Period.
Seller and Buyers will each take all appropriate steps to carry
out each Annual Program and Ninety-Day Schedule.

(b) An Annual Progam shall be amended to reflect a request
for:

(i) Make-Good LNG relating to an Allowance exercised
in respect of the immediately preceding year;

(ii) Make-Up LNG relating to a Take-or-Pay Quantity
paid for in respect of the immediately preceding
year; or

(iii) Restoration Quantities relating to a Force
Majeure Deficiency arising in respect of the
immediately preceding year;
provided that the requested LNG and the necessary transportation
are available and such request is received by Seller not later
than January 15 of the year to which such Annual Program relates.

12.3 Maintenance and Inspection Coordination

Not later than ninety (90) days prior to the beginning
of each calendar
year, Seller and Buyers shall consult and agree on a program
designed to coordinate the anticipated scheduled maintenance and
inspection downtime during that calendar year of the Receiving
Facilities of each Buyer, the anticipated scheduled downtime of
each of the Indonesian Facilities and the maintenance schedules
of the LNG Tankers. Such program (the "Coordinated Maintenance
Schedule") will be devised so as to minimize the collective
impact of such downtime and maintenance periods on the continuous
delivery of LNG hereunder.

ARTICLE 13 - MEASUREMENTS AND TESTS

13.1 Parties to Supply Devices
Seller shall supply, operate, and maintain or cause to
be supplied, operated, and maintained suitable gauging devices
for the LNG tanks of the LNG Tankers, density, pressure and
temperature measuring devices, and any other measurement or
testing devices which are incorporated in the structure of LNG
Tankers or customarily maintained on shipboard.
Each Buyer shall supply, operate, and maintain, or cause to
be supplied, operated and maintained, devices required for
collecting samples and for determining quality and composition of
the LNG and any other measurement or testing devices which are
incorporated in land structures or customarily maintained at
Receiving Facilities.
13.2 Selection of Devices

All devices provided for in this Article 13 shall be
compatible with the
specifications of the LNG Tankers. Such devices shall be chosen
by mutual agreement of the parties and shall be such that at the
time of selection are the most accurate and reliable devices in
their practical application. The required degree of accuracy of
such devices selected shall be mutually agreed upon and verified
by Buyers and Seller, in advance of their use, and at the request
of either Buyer or Seller such degree of accuracy shall be
verified by an independent surveyor mutually agreed upon by such
Buyer and Seller.

13.3 Units of Measurement and Calibration

The parties will cooperate closely in the design,
selection, and acquisition of devices to be used for measurements
and tests under this Article 13, in order that to the maximum
extent possible, all measurements and tests may be conducted
either in American units of measurement or in metric units of
measurement. In the event that it becomes necessary to make
measurements and tests using a new system of units of
measurement, the parties shall establish mutually agreeable
conversion tables, or, if they are unable to agree, such tables
may be established by the procedures provided for resolution of
disputes on measurement and testing in Section 13.11. Measurement
devices shall be calibrated as follows:
Measurement American Units Metric Units

Volume Cubic feet Cubic meters

Temperature Degrees Fahrenheit Degrees Centigrade

Pressure Pounds per square Kilograms per square
inch or inches of centimeter or
mercury millimeters of
mercury

Length Feet Meters

Weight Pounds Kilograms

Density Pounds per cubic Kilograms per cubic
foot meter

13.4 Tank Gauge Tables of LNG Tankers

Seller shall provide each Buyer, or cause each Buyer to
be provided,
with a certified copy of tank gauge tables for each tank of each
LNG Tanker verified by the U.S. Bureau of Standards at Washington,
D.C., the Nippon Kaiji Kentei Kyokai (Japan Marine Surveyors and
Sworn Measurers' Association), or other competent impartial
authority mutually agreed upon by the parties. Such tables shall
include correction tables for list, trim, tank construction, and
any other items requiring such tables for accuracy of gauging.
Seller and Buyers shall each have the right to have
representatives present at the time each LNG tank on each LNG
Tanker is volumetrically calibrated. If the LNG tanks of any LNG
Tanker suffer distortion of such nature as to cause a prudent
expert reasonably to question the validity of the tank gauge
tables described herein (or any subsequent calibration provided
for herein), any Buyer or Seller may require recalibration of such
LNG tanks during any period when the LNG Tanker is out of service
for scheduled inspection or repairs. Upon recalibration of the
LNG tanks of the LNG Tankers, the same procedures used to provide
the original tank gauge tables will be used to provide revised
tank gauge tables based upon the recalibration data. The
calibration of tanks provided for in this Section 13.4 shall
constitute the only calibration required for purposes of this
Contract.

13.5 Gauging and Measuring LNG Volumes Delivered

Volumes of LNG delivered pursuant to this Contract shall
be determined by gauging the LNG in the tanks of the LNG Tankers
before and after unloading.
Gauging the liquid in the tanks of the LNG Tankers and
measuring of liquid temperature, vapor temperature, vapor
pressure, and liquid density in each LNG tank, trim and list of
the LNG Tankers, and atmospheric pressure shall be performed, or
caused to be performed, by Seller before and after unloading.

The first gauging and measurements shall be made immediately
before the commencement of unloading. The second gauging and
measurements shall take place immediately after completion of
unloading.

Copies of gauging and measurement records shall be furnished
to Buyer.

A. Gauging the Liquid Level of LNG

The level of the LNG in each LNG tank of the LNG Tanker
shall be gauged by means of the gauging device installed in the
LNG Tanker for that purpose. The level of the LNG in each tank
shall be logged or printed.

B. Determination of Temperature

The temperature of the LNG and of the vapor space in
each cargo
tank shall be measured by Seller by means of a sufficient number
of properly located temperature measuring devices, to permit the
determination of average temperatures. Temperatures shall be
logged or printed.

C. Determination of Pressure

The pressure of the vapor in each LNG tank shall be
determined by
means of pressure measuring devices installed in each LNG tank of
the LNG Tankers. The atmospheric pressure shall be determined by
readings from the standard barometer installed in the LNG Tankers.

D. Determination of Density

Density of the LNG shall be determined by Seller either
by computation or by measurement, as mutually agreed to by the
parties. Initially the density of the LNG will be computed by the
method described in Schedule A attached hereto. Should any
improved data, method of calculation or direct measurement device
become available which is acceptable to both Buyers and Seller,
such improved data, method or device shall then be used. If
density is determined by measurements, the results shall be logged
or printed.

13.6 Samples for Quality Analysis

Representative samples of the LNG delivered shall be
obtained, or be caused to be obtained, in triplicate by each Buyer
during the time of unloading and delivery to such Buyer. The
three (3) samples shall be taken from an appropriate point on
Buyer's receiving line as close as possible to the unloading
flanges and collected in the gaseous state using the continuous
gasification/collection method agreed by Buyers and Seller. The
method and devices for sampling and the quantity of the samples to
be withdrawn, shall be
determined by agreement between Buyers and Seller to provide for
taking representative and adequate samples of the LNG delivered.
The samples obtained shall be distributed as follows:
First sample -for use of Buyer receiving the LNG shipment.
Second sample - for retention by such Buyer for an agreed
period, not to exceed twenty (20) days
during which any dispute as to the
accuracy of any analysis shall be raised,
in which case the sample shall be further
retained until such Buyer and Seller agree
to retain it no longer.

Third sample - for use of Seller, if Seller so requests.

If representative samples cannot be obtained by Buyer, the
data to be determined by sample analysis in Section 13.7 shall be
based upon the analysis of the LNG loaded at the Loading Port and
shall, after the boil-off adjustment provided for below, be
substituted for use in determining composition of the cargo
delivered. Such data obtained at the Loading Port shall be
adjusted for boil-off on the basis of the arithmetic average of
the boil-off experience during the one-way voyage with regard to
the last five (5) cargoes from the same Loading Port to the same
Receiving Facility. For this purpose Seller shall utilize devices
comparable to those utilized at the Receiving Facility and shall
employ methods of taking and analyzing the samples at the Loading
Port comparable in accuracy to those employed at the Receiving
Facility.
13.7 Quality Analysis

The samples provided for in Section 13.6 shall be
analyzed, or be caused to be analyzed, by the Buyer receiving the
LNG shipment to determine the molar fraction of the hydrocarbon
and other components in the sample by gas chromatography in
accordance with "G.P.A- Standard 2261, Method of Analysis for
Natural Gas and Similar Gaseous Mixtures by Gas Chromatography",
published by G.P.A., current as of January 1, 1977. If better
standards for analysis are subsequently adopted by G.P.A. or other
recognized competent impartial authority, upon mutual agreement of
Buyers and Seller, they shall be substituted for the standards
then in use, but such substitution shall not take place
retroactively.
Should it be necessary to obtain periodic samples, the
composition of the LNG unloaded from each LNG Tanker shall be the
arithmetic average of the results obtained by analysis of the
samples obtained under Section 13.6. A calibration of the
chromatograph or other analytical instrument used shall be
performed by each Buyer immediately prior to the analysis of the
sample of LNG delivered. The Buyer intending to conduct a
calibration shall give advance notice thereof to Seller, and
Seller shall have the right to have a representative present at
each such calibration; provided, however, that the party
performing the calibration will not be obligated to defer or
reschedule any calibration in order to permit the representative
of the other party to be present.

The sample shall be analyzed, or be caused to be analyzed, by
the Buyer to determine the concentrations of Hydrogen sulfide
(H2S) and total sulfur referred to in Section 11.2 using the
methods described in Schedule A attached hereto.

13.8 Operating Procedures

Prior to conducting operations for measurement, gauging
and analysis
provided in Sections 13.5, 13.6 and 13.7 the party responsible for
such operations shall notify the appropriate representatives of
the other party, allowing such representative reasonable
opportunity to be present for all operations and computations;
however, the absence of the other party's representative after
notification and opportunity to attend shall not prevent any
operations and computations from being performed. At the request
of either party any measurement, gauging and analysis provided for
in Sections 13.5, 13.6 and 13.7 shall be witnessed and verified by
an independent surveyor mutually agreed upon by the Buyer and
Seller. The results of such surveyor's verifications shall be
made available promptly to each party. All records of
measurements and the computation results shall be preserved and
available to both parties for a period of not less than three (3)
years after such measurements and computation.

13.9 BTU Quantities Delivered

The quantity of British Thermal Units (BTU) of LNG
delivered from LNG Tankers shall be calculated by Seller,
following the procedures described in this Section 13.9 and shall
be verified by an independent surveyor mutually agreed upon by
Seller and Buyer.
A. Determination of Gross Heating Value
The Gross Heating Value of the samples of the LNG shall
be determined by computation, in accordance with the method
described in Schedule A attached hereto, on the basis of the
molecular composition determined pursuant to Section 13.7 and the
molecular weights and heating values described in "G.P.A.
Publication 2145" published by G.P.A. current at the time of
computation.

If better constants or improved methods for determination of
heating value are subsequently adopted by G.P.A. or other
recognized competent impartial authority, they shall, upon mutual
agreement of Seller and Buyers, be substituted therefor but not
retroactively. The Gross Heating Value of the representative
sample shall be the conclusive Gross Heating Value for the purpose
of determining quantities of British Thermal Units (BTU) delivered.

B. Determination of Volume of LNG Unloaded

The LNG volume in the tanks of the LNG Tanker before and
after unloading shall be determined by gauging as provided in
Section 13.5 on the basis of the tank gauge tables provided for in
Section 13.4. The volume of LNG remaining in the tanks of the LNG
Tanker after unloading shall then be subtracted from the volume
before unloading and the resulting volume shall be taken as the
volume of the LNG delivered from the LNG Tanker.

If failure of gauging and measuring devices of an LNG Tanker
should cause impossibility of determining the LNG volume, the
volume of LNG delivered shall be determined by gauging the liquid
level in Buyer's onshore LNG storage tanks immediately before and
after unloading the LNG Tanker and such volume shall be increased
by adding an estimated LNG volume, agreed upon by the parties, for
boil-off from such onshore LNG storage tanks and related pipelines
during the unloading of LNG. Each Buyer shall provide Seller, or
cause Seller to be provided with, a certified copy of tank gauge
tables for each onshore LNG tank which is to be used for this
purpose verified by a competent impartial authority.

C. Determination of BTU Quantities Delivered
The quantities of British Thermal Units (BTU) delivered
from LNG Tankers shall be computed by Seller by means of the
following formula:
Q = V x D x P - Qr

in which: Q represents the quantity of the LNG delivered
in British Thermal Units (BTU).

V represents the volume of the LNG unloaded, stated
in cubic meters, determined as provided in Section
13.9 B.

D represents the density of the LNG unloaded, stated
in kilograms per cubic meter, determined as
provided in Section 13.5 D.

P represents the Gross Heating Value of the LNG
unloaded, stated in British Thermal Units (BTU) per
kilogram.

Qr represents the quantity in British Thermal Units
(BTU) of the vapor which displaced the volume of
LNG unloaded from the LNG tanks in the LNG Tankers.

Physical constants, calculation procedures and examples of BTU
determination are provided in Schedule A.

13.10 Verification of Accuracy and Correction for Error

Accuracy of devices used shall be tested and verified at
the request of either party, including the request by a party to
verify accuracy of its own devices. Each party shall have the
right to inspect at any time the measurement devices installed by
the other party, provided that the other party be notified in
advance. Testing shall be performed only when both parties are
represented, or have received adequate advance notice thereof,
using methods recommended by the manufacturer or any other method
agreed to by Seller and Buyers. At the request of any party any
test shall be witnessed and verified by an independent surveyor
mutually agreed upon by Buyers and Seller. Permissible tolerances
shall be as defined in Schedule A. Inaccuracy of a device
exceeding the permissible tolerances shall require correction of
previous recordings, and computations made on the basis of those
recordings, to zero error with respect to any period which is
definitely known or agreed upon by the parties, as well as
adjustment of the device. In the event that the period of error
is neither known nor agreed upon, corrections shall be made for
each delivery made during the last half of the period since the
date of the most recent calibration of the inaccurate device.
However, the provisions of this Section 13.10 shall not be applied
to require the modification of any invoice which has become final
pursuant to Section 10.6.

13.11 Disputes
In the event of any dispute concerning the subject
matter of this Article 13, including but not limited to disputes
over selection of the type or the accuracy of measuring devices,
their calibration, the result of a measurement, sampling,
analysis, computation, or method of calculation, such dispute
shall be submitted to a competent impartial authority mutually
agreed upon by the parties or, if such authority cannot be agreed
upon within thirty (30) days of request by either party, such
dispute shall be decided by arbitration pursuant to Article 16.
All decisions of an authority acting under this Section 13.11
shall be binding on the parties. Expenses incurred in connection
with the services of such authority shall be shared equally by the
parties.

13.12 Costs and Expenses of Test and Verification

All costs and expenses for testing and verifying Seller's
measurement devices as provided for in this Article 13 shall be
borne by Seller and all costs and expenses for testing and
verifying a Buyer's measurement devices shall be borne by such
Buyer. The fees and charges of independent surveyors for
measurements and calculations as provided for in Sections 13.8 and
13.9 shall be borne equally by Seller and Buyer. When the
services of independent surveyors are required and selected by
mutual agreement pursuant to Section 13.10, then the fees and
charges of such surveyors shall be borne equally by Seller and
Buyers.

ARTICLE 14 - DUTIES, TAXES AND CHARGES

Each Buyer shall pay (or reimburse Seller for payments made
by it) and shall indemnify and hold Seller harmless from, all
taxes, royalties, duties, or other imposts levied or imposed by
the Japanese Government or any subdivision thereof, or any other
governmental authority in Japan, on the transportatior, sale and
import of LNG, or on any income resulting therefrom, including
income resulting from payments made under this Article 14, and all
port charges, taxes and duties levied or imposed on the LNG
Tankers in Japan. The parties understand and confirm that Buyer
shall not be required to pay under this Article 14 for any port
charges, taxes or duties on LNG Tankers to the extent the same are
included in any other amounts payable by Buyer under this
Contract. All payments or reimbursements required under this
Article 14 shall be made by Buyer within twenty (20) calendar days
after the date of Buyer's receipt of such invoice in Japan.
ARTICLE 15 - FORCE MAJEURE

15.1 Events of Force Majeure

Neither Seller nor any Buyer shall be liable for any
delay or failure in performance hereunder if and to the extent
such delay or failure in performance results from any of the
following:

A. Fire, flood, atmospheric disturbance, lightning, storm,
typhoon, tornado, earthquake, landslide, soil erosion,
subsidence, washout or epidemic;

B. War, riot, civil war, blockade, insurrection, act of
public enemies or civil disturbance;

C. Strike, lockout or other industrial disturbance;

D. Serious accidental damage to or other serious failure of
Seller's Facilities, unless such damage or failure is
the result of willful negligence on the part of Seller's
management;

E. Serious accidental damage to or other failure of a
Buyer's Facilities, unless such damage or failure is the
result of willful negligence on the part of such Buyer's
management;

F. The reserves of Natural Gas in the Arun field or the
Badak field which can economically be produced for
purposes of this Contract have been fully depleted;

G. Act of government which directly affects the ability of
a party to perform any obligation hereunder other than
the obligation to remit payments as provided in Section
10.4 on account of LNG delivered and taken or not taken
but required to be paid for under this Contract; or

H. Unavailability of an LNG Tanker caused by an event or
circumstance which is beyond the reasonable control of
Seller despite Seller's best efforts to assure the
availability of such LNG Tanker.

Nothing herein shall relieve Buyers of their obligation to pay for
LNG delivered

or to make any other payment which has become due and payable
under this Contract prior to the occurrence of any of the events
described above.

15.2 Notice, Resumption of Normal Performance, etc.

Immediately upon the occurrence of an event of force
majeure, the
party affected shall give notice thereof to the other party
describing such event and the estimated period during which
operations will be suspended or reduced. The parties shall
exercise reasonable diligence to ensure resumption of normal
performance under this Contract after the occurrence of any event
of force majeure, and prior to resumption of normal performance,
the parties shall continue to perform their obligations under this
Contract to the extent not affected by such event of force
majeure.

15.3 Settlement of Industrial Disturbances

Settlement of strikes, lockouts or other industrial
disturbances shall be
entirely within the discretion of the party experiencing such
situations and nothing herein shall require such party to settle
industrial disputes by yielding to demands made on it when it
considers such action inadvisable.

ARTICLE 16 - ARBITRATION
All disputes arising between any Buyer or Buyers, on the one
hand, and Seller, on the other hand, relating to this Contract or
the interpretation or performance hereof, shall be finally settled
by arbitration conducted in accordance with the Rules of
Arbitration of the International Chamber of Commerce, effective at
the time, by three (3) arbitrators appointed in accordance with
such Rules. Arbitration shall be conducted in the English
language and shall be held at Paris, France, unless another
location is selected by mutual agreement of the parties concerned.
The award rendered by the arbitrators shall be final and binding
upon the parties concerned.
ARTICLE 17 - APPLICABLE LAW

This Contract shall be governed by and interpreted in
accordance with the laws of the State of New York, United States
of America.
ARTICLE 18 - BUYERS' COORDINATOR

Buyers will from time to time designate a Buyers' Coordinator
to act on behalf of each Buyer in performing the following:

A. Coordinating among each of Buyers, and between Seller
and Buyer or Buyers, and the handling of communications
between Seller and Buyer or Buyers in connection with
performance of this Contract, in particular the exercise
of Allowances pursuant to Section 7.3(d).

B. Implementation of various operations of each Buyer or of
Buyers which are necessary in connection with the
purchasing of LNG hereunder.

Buyers shall notify Seller the name and address of the entity to
act as Buyers' Coordinator. Buyers have notified Seller that
Japan Indonesia LNG Co., Ltd. is presently acting as Buyers'
Coordinator.

Seller shall be entitled to accept and rely upon any communication
received from Buyers' Coordinator as if received directly from one
or more of Buyers, and to give any communication to Buyers'
Coordinator with the same effect as if given directly to a Buyer
or Buyers, if such notice or communication relates to matters as
to which Buyers' Coordinator is acting as described above pursuant
to this Article 18. No act of or authorization to Buyers'
Coordinator shall relieve any Buyer from performance of any
obligation or payment of any liability of such Buyer hereunder,
each Buyer remaining primarily liable therefor at all times.

ARTICLE 19 - CONFIDENTIALITY

Confidential information or documents which will come to the
attention of the parties in connection with the performance of
this Contract may not be used or communicated to third parties,
other than Mobil or any member of the Huffco Group or any
Affiliate (as defined below) of a party or of a Seller's Supplier,
without the agreement of Seller, in the case of information and
documents furnished to Buyers, and of the Buyer or Buyers
concerned, in the case of information and documents furnished to
Seller. This restriction shall not apply to information or
documents which:

A. Have fallen into the public domain otherwise than
through the act or failure to act of the party that has
obtained them;

B. Are communicated to legal counsel, accountants, other
professional consultants, underwriters, or lenders of
one of the parties, with the obligation of the persons
receiving them to maintain confidentiality; or

C. Are communicated to government or governmental
authorities of the Republic of Indonesia, Japan or the
United States of America having authority to require
such disclosure, in accordance with that authority.

As used above, the term Affiliate means a company controlled by,
under the control of, or under common control with, the party, or
Mobil, or a member of the Huffco Group. Each Affiliate shall have
the same obligation as the parties have to maintain
confidentiality.

ARTICLE 20 - NOTICES

All notices and other communications for purposes of this
Contract shall be in writing, which shall include transmission by
telex, facsimile or cable, except that notices given from LNG
Tankers at sea may be by radio. Notices and communications shall
be directed as follows:

A. To Seller at the following mail address-

PERUSAIIAAN PERTAMBANGAN MINYAK DAN GAS BUMI NEGARA

(PERTAMINA)
Attention: Head of Gas Marketing Bureau
P.O. Box 12/JKT
Jalan Merdeka Timur No. 1A
Jakarta Pusat, Indonesia

And at the following cable and telex addresses -

Cable: Telex:
PERTAMINA PERTAMINA
JAKARTA, INDONESIA VIA RCA 44302 or 44152
Attention: Head of Gas Marketing JAKARTA,
Bureau INDONESIA
Facsimile: 355271

B. To Buyers at the following mail and telex addresses-

CHUBU ELECTRIC POWER CO., INC.
(Mail Address)
Attention: Fuel Department
1, Toshin-cho, Higashi-ku,
Nagoya, 461 Japan
(Telex Address) 4444405 CHUDEN J

THE KANSAI ELECTRIC POWER CO., INC.
(Mail Address)
Attention: Fuel Department
3-22, Nakanoshima 3-chonie, Kita-ku,
Osaka, 530 Japan

(Telex Address)
5248320 KEPCO J

KYUSHU ELECTRIC POWER CO., INC.
(Mail Address)
Attention: Fuel Department
1-82, Watanabe-dori 2-chome, Chuo-ku,
Fukuoka, 810 Japan

(Telex Address)
725497 KYUDEN J

NIPPON STEEL CORPORATION
(Mail Address)
Attention: Coal & Fuel Division
6-3, Otemachi 2-chome,
Chiyoda-ku, Tokyo, 100 Japan
(Telex Address)
NSC J22291

OSAKA GAS CO., LTD.
(Mail Address)
Attention: Gas Resources Department
4-1-2, Hiranomachi, Chuo-ku,
Osaka, 541 Japan

(Telex Address)
5225275 DAJGAS J

TOHO GAS CO., LTD.
(Mail Address)
Attention: Raw Materials Department
19-18, Sakurada-cho, Atsuta-ku,
Nagoya, 456 Japan
(Telex Address)
4477651 TOHOGS J

The parties may designate additional addresses for particular
communications as required from time to time, and may change any
addresses, by notice given thirty (30) days in advance of such
additions or changes. Immediately upon receiving communications
by telex, facsimile, cable or radio, a party shall acknowledge
receipt by the same means, and may request a repeat transmittal of
the entire communication or confirmation of particular matters.
If the sender receives no acknowledgement of receipt within
twenty-four (24) hours, or receives a request for repeat
transmittal or confirmation, said party shall repeat the
transmittal or answer the particular request.

ARTICLE 21 - ASSIGNMENT

Neither this Contract nor any rights or obligations hereunder
may be assigned by any Buyer without the prior written consent of
Seller, or by Seller without the prior written consent of each
Buyer. Any request by a Buyer for Seller's consent to an
assignment shall be accompanied by the written consent of each
other Buyer to the proposed assignment.

ARTICLE 22 - AMENDMENTS

This Contract may not be amended, modified, varied or
supplemented except by an instrument in writing, signed by Seller
and Buyers.

Performance of any condition or obligation to be performed
hereunder shall not be deemed to have been waived or postponed
except by an instrument in writing signed by the party who is
claimed to have granted such waiver or postponement.

ARTICLE 23 - SEPARABILITY

This Contract shall be binding upon each Buyer in accordance
with its terms. The liabilities of Buyers under this Contract are
several and not joint and each Buyer shall be liable only for
performance of the obligations of such Buyer as provided in this
Contract.

ARTICLE 24 - DETAILS OF PERFORMANCE

Details necessary for performance of this Contract shall be
mutually agreed upon by Seller and each Buyer separately or, when
necessary and desirable, by Seller and Buyers on a coordinated and
mutually agreeable basis.

ARTICLE 25 - SCOPE

This Contract constitutes the entire agreement between the
parties relating to the subject matter hereof and supersedes and
replaces any provisions on the same subject contained in any other
agreement between the parties, whether written or oral, prior to
the date of the original execution hereof.

Subsequent to the date of original execution of this
Contract, various agreements, manuals, procedures and details of
performance relating to the interpretation or implementation of
the Contract or covering matters related thereto, have been agreed
between Seller and Buyers ("Ancillary Agreements"). It is agreed
that no Ancillary Ageement or portion thereof, to the extent it is
in effect and capable of performance, shall be annulled,
terminated or revoked by reason of the execution of this amended
and restated Contract, except that:
(i) to the extent that there is any conflict between such
Ancillary Agreements and any specific amendment to the
Contract incorporated in this amended and restated
Contract, such specific amendment shall prevail; and

(ii) the following Ancillary Agreements (or identified
portions thereof) are superseded by this amended and
restated Contract and shall have no further effect:

(A) Memorandum of Agreement (15-year amendment) dated
as of January 1, 1983;

(B) Memorandum of Understanding Related to Amendement
No. 3 to the Transportation Agreement dated October
16, 1987 - Section H, paragraphs 7, 9 and 10;

(C) Amended and Restated Invoice Settlement Agreement
for 1973 LNG Sales Contract dated as of March 31,
1987 and amended and restated as of December 1,
1988 - paragraph 6;

(D) Assignment dated as of January 30, 1987 from Nippon
Steel to Toho Gas; and

(E) Memorandum of Agreement on Revisions to the 1973
LNG Sales Contract dated as of September 7, 1989.

ARTICLE 26 - COUNTERPARTS
This Contract is executed in seven (7) identical counterparts
each of which shall have the force and dignity of an original, and
all of which shall constitute but one and the same Contract.
IN WITNESS WHEREOF, each of the parties has caused this
amended and restated Contract to be duly executed and signed by
its duly authorized officer as of January 1, 1990.

SELLER: BUYERS:
PERUSAHAAN PERTAMBANGAN CHUBU ELECTRIC POWER CO., INC.
MINYAK DAN GAS BUMI
NEGARA (PERTAMINA)
By /s/

BY: /s/ THE KANSAI ELECTRIC POWER CO.,INC.

WITNESS: BY /s/

JAPAN INDONESIA LNG CO. LTD. KYUSHU ELECTRIC POWER CO, INC.

BY /S/ BY /S/

NISSHO IWAI CORPORATION NIPPON STEEL CORPORATION

BY /S/ BY /S/

OSAKA GAS CO, LTD.

BY /S/

TOHO GAS CO., LTD.

BY /S/

<PAGE>
ARTICLE 26 - COUNTERPARTS

This Contract is executed in seven (7) identical counterparts
each of which shall have the force and dignity of an original, and
all of which shall constitute but one and the same Contract.

IN WITNESS WHEREOF, each of the parties has caused this
amended and restated Contract to be duly executed and signed by
its duly authorized officer as of January 1, 1990.

SELLER: BUYERS:
PERUSAHAAN PERTAMBANGAN CHUBU ELECTRIC POWER CO., INC.
MINYAK DAN GAS BUMI
NEGARA (PERTAMINA)
BY /s/

THE KANSAI ELECTRIC POWER CO., INC.
BY

WITNESS: BY /s/

JAPAN INDONESIA LNG CO., LTD. KYUSHU ELECTRIC POWER CO., INC.

BY BY /s/

NISSHO IWAI CORPORATION NIPPON STEEL CORPORATION

BY /s/ BY /s/

OSAKA GAS CO., LTD.

BY /s/

TOHO GAS CO., LTD.

BY /s/

<PAGE>

AMENDED AND RESTATED BADAK LNG SALES CONTRACT

This Badak LNG Sales Contract (the "Contract") dated as of the
14th day of April 1981, and amended and restated as of the 1st day
of January, 1990, by and between PERUSAHAAN PERTAMBANGAN MINYAK DAN
GAS BUMI NEGARA, a state enterprise of the Republic of Indonesia
("Seller"), on the one hand, and CHUBU ELECTRIC POWER CO., INC
("Chubu Electric"), THE KANSAI ELECTRIC POWER CO, INC. ("Kansai
Electric"), OSAKA GAS CO., LTD. ("Osaka Gas") and TOHO GAS CO.,
LTD. ("Toho Gas"), all corporations organized and existing under
the laws of Japan (hereinafter referred to individually as "Buyer"
and collectively as "Buyers"), on the other hand,

WITNESSETH:

WHEREAS:

1. By that certain Invoice Settlement Agreement for 1981 LNG
Sales Contract dated as of March 31, 1987 and amended and restated
as of December 1, 1988, Seller and Buyers agreed to amend the
Contract to delete the currency adjustment provision and all
references thereto as of April 1, 1988; and

2. By Memorandum of Agreement on Revisions to the 1981 Badak LNG
Sales Contract dated as of September 7, 1989, Seller and Buyers
agreed to revise certain provisions of the Contract, to provide for
an adjustment of the Contract Sales Price and the sale and purchase
of additional quantities of LNG, and to amend the Contract to
incorporate these revisions effective as of January 1, 1990; and

3. Seller and Buyers have agreed to eliminate those provisions of
the Contract that are no longer operational and to make certain
linguistic and grammatical revisions to improve the clarity of the
Contract.

NOW, THEREFORE, Seller and each Buyer hereby agree to the
following terms:

ARTICLE I - DEFINITIONS

The terms or expressions below will have the following
meanings in this Contract:

1.1 Actual Cubic Foot
A volume equal to the volume of a cube whose edge is
one foot.

1.2 Actual Loading Time
As defined in Section 4.12(b).

1.3 Affiliate
As defined in Article 19.

1.4 Allowance
The quantity of LNG by which a Buyer reduces a
Quantity Deficiency in respect of a given calendar year pursuant to
the provisions of Section 73(d).

1.5 Allowance Restoration Period.
As defined in Section 7.3(d)(iv).

1.6 Allotted Loading Time
As defined in Section 4.12(a).

1.7 Annual Program
As defined in Section 12.1(a).

1.8 Arrival Temperature Requirement
As defined in Section 4.10.

1.9 Badak Facility
As defined in Section 5.2.

1.10 British Thermal Unit (BTU)
The amount of heat required to raise the temperature
of one avoirdupois pound of pure water from 59.00F to 60.00F at an
absolute pressure of 14.696 pounds per square inch.

1.11 Business Day in Japan
Every day other than Saturdays, Sundays, National
Holidays (including compensatory days), and January 2 and 3.

1.12 Buyers' Coordinator
Japan Indonesia LNG Co., Ltd. or such other entity
as may be designated by Buyers pursuant to Article 18.

1.13 Buyer's Facilities
For the purposes of Section 15.1(a)(v) in respect of
any Buyer, the Receiving Facilities of such Buyer and such other
facilities directly related to the use of LNG which, if not
operational, would reduce the amount of LNG which such Buyer is
able to receive hereunder.

1.14 Buyers' Representative
P.T. Jasa Enersi Pratama Nusantara or such other
entity as may be designated by Buyers pursuant to Article 18.

1.15 Buyers' Transportation Agreement
The Transportation Agreement between Buyers and
Buyers' Transporter for transporting LNG delivered under this
Contract.

1.16 Buyers' Transporter
The Transporter designated in Buyers' Transportation
Agreement.

1.17 Certificate
As defined in Section 3.2(a).

1.18 Contract Sales Price
As defined in Section 8.2.

1.19 Cubic Meter (CBM)
A volume equal to the volume of a cube whose edge is
one meter.

1.20 Delivery Point
The point at the Loading Port at which the flange
coupling of Seller's loading line joins the flange coupling of the
LNG loading manifold onboard any LNG Tanker.

1.21 ETA
Estimated time of arrival as defined in Section 4.6
(a).

1.22 Exercising Buyer
As defined in Section 7.3 (d)(i).

1.23 Fixed Quantity
As defined in Section 7.l.

1.24 Fixed Quantity Period
As defined in Section 7.l.

1.25 Floor Price
As defined in Section 8.2.

1.26 Force Majeure Deficiency
As defined in Section 7.6 (a).

1.27 Gas Supply Area
Badak, Nilam and other nearby fields selected by
Seller in East Kalimantan, Indonesia.

1.28 G.P.A.
Gas Processors Association.

1.29 Gross Heating Value
The quantity of heat expressed in British Thermal
Units produced by the complete combustion in air of one cubic foot
of anhydrous gas, at a temperature of 60.00 Fahrenheit and an
absolute pressure of 14.696 pounds per square inch, with the air at
the same temperature and pressure as the gas, after cooling the
products of the combustion to the initial temperature of the gas
and air, and after condensation of the water formed by combustion.

1.30 Huffco Group
Roy M. Huffington, Inc., Huffington Corporation,
Virginia International Company, Virginia Indonesia Company,
Ultramar Indonesia Limited, Union Texas East Kalimantan Limited and
Universe Tankships, Inc.

1.31 Initial Contract Sales Price
As defined in Section 8.l.

1.32 Liquefied Natural Gas (LNG)
Natural Gas in a liquid state at or below its
boiling point and at a pressure of approximately one atmosphere.

1.33 LNG Tanker
An ocean-going vessel, meeting the requirements of
Section 4.2, suitable for transporting LNG, which is used by Buyers
for transportation of LNG under this Contract.

1.34 Loading Port
The port located at the Badak Facility.

1.35 Make-Good LNG
As defined in Section 7.3 (d)(iv).

1.36 Make-Good Obligation
The obligation of a Buyer as set forth in Section
7.3 (d)(iv) to take and pay for LNG in an amount (measured in
BTU'S) equal to each Allowance exercised.

1.37 Make-Up LNG
As defined in Section 7.5.

1.38 Natural Gas
Any hydrocarbon or mixture of hydrocarbons
consisting essentially of methane, other hydrocarbons, and
non-combustible gases in a gaseous state and which is extracted
from the subsurface of the earth in its natural state, separately
or together with liquid hydrocarbons.

1.39 1973 LNG Sales Contract
The LNG Sales Contract dated as of December 3, 1973,
amended and restated as of January 1, 1990, between Seller, on the
one hand, and Chubu Electric, Kansai Electric, Kyushu Electric
Power Co., Inc., Nippon Steel Corporation, Osaka Gas and Toho Gas,
on the other hand.

1.40 Ninety-Day Schedule
As defined in Section 12.2.

1.41 Notice of Readiness
As defined in Section 4.9.

1.42 Proved Remaining Recoverable Reserves
Reserves which have been proved to a high degree of
certainty by reason of actual completion, successful testing or in
certain cases by adequate core analyses; and which are defined
areally by reasonable geological interpretation of structure and
known continuity of oil- or gas-saturated material.

1.43 Quantity Deficiency
As defined in Section 7.3(a).

1.44 Receiving Facilities
As defined in Section 5.l.

1.45 Restoration Quantities
As defined in Section 7.6(a).

1.46 Round-Up Request
As defined in Section 7.3 (a)(ii).

1.47 Seller's Facilities
For the purposes of Section 15.1(a)(iv), Natural Gas
reservoirs or production facilities in the field, the facilities
for transportation of Natural Gas from the field, and the Badak
Facility.

1.48 Seller's Gas Supply Obligation
From time to time on any given date the amount of
Natural Gas required to satisfy the remaining obligations of Seller
on such date to supply LNG or Natural Gas from the Gas Supply Area
plus the amount of Natural Gas from the Gas Supply Area required to
supply any additional commitment or commitments which Seller
anticipates making.

1.49 Seller's Suppliers
In respect of portions of the LNG to be sold
hereunder:
(a) Huffco Group;
(b) Total Indonesie and Indonesia Petroleum Ltd.;
and
(c) Unocal Indonesia Ltd. and Indonesia Petroleum
Ltd.;

and any successors and assignees of the aforesaid suppliers who
shall have agreed in writing to be bound by all of the obligations
of their respective assignors under the applicable Supply Agreement
with Seller.

1.50 Seller's Transportation Agreement
That certain Transportation Agreement made as of
September 23, 1973, as amended, by and between Burmah Gas Transport
Limited and Seller.

1.51 Standard Cubic Foot (scf)
The quantity of Natural Gas, free of water vapor,
occupying a volume of one Actual Cubic Foot at a temperature of
60.00F and at an absolute pressure of 14.696 pounds per square
inch.

1.52 Statement of Cooling Time
As defined in Section 4.10.

1.53 Supply Agreement
As defined in Section 3.1.

1.54 Take-or-Pay Quantity
As defined in Section 7.5.

1.55 Unloading Ports
The ports at locations in or near Nagoya, Osaka,
Himeji, and at such other locations in Japan as may be agreed
between Seller and Buyers, where the Receiving Facilities are or
will be constructed.

ARTICLE 2 - SALE AND PURCHASE

Seller agrees to sell and deliver to the Delivery Point and
each Buyer agrees to purchase, receive and pay for, and to pay for
if not taken, LNG, in the quantities and at the price and in
accordance with the other terms and conditions set forth in this
Contract.

<PAGE>
ARTICLE 3 - SOURCES OF SUPPLY

3.1 Sources of Supply
The Natural Gas to be processed into LNG and sold
hereunder is to be produced from the Gas Supply Area. Seller
represents that Seller will maintain throughout the term hereof the
right to sell all quantities of LNG to be sold hereunder. In this
connection, Seller represents that it has executed or will execute
from time to time, as required in order to maintain the right to
sell the quantities of LNG to be sold hereunder, agreements with
production sharing contractors of Seller under which agreements
such production sharing contractors make available for sale
hereunder their respective interests in the quantities of LNG to be
sold hereunder ("Supply Agreement").

3.2 Reserves of Natural Gas
(a) Seller has furnished Buyers with statements, each
entitled "Certificate" and each dated on or prior to November 15,
1979, of DeGolyer and MacNaughton expressing its estimate of Proved
Remaining Recoverable Reserves of Natural Gas in the Gas Supply
Area. Seller represents that such estimated quantity is in excess
of Seller's Gas Supply Obligation as of the date of this Contract.
Hereafter and throughout the term of this Contract, before
committing additional Natural Gas from the Gas Supply Area to sale
or other utilization, Seller shall secure from an independent
petroleum engineering consultant firm of recognized standing in the
petroleum industry, qualified by reputation and experience in
estimating reserves of oil and natural gas in subsurface
reservoirs, the written statement (the "Certificate") of such firm
expressing its estimate of Proved Remaining Recoverable Reserves of
Natural Gas in the Gas Supply Area in an amount at least equal to
Seller's Gas Supply Obligation. Seller shall provide Buyers with
copies of each Certificate of such independent petroleum
engineering consultant firm on which Seller relies in making any
such commitment for supply of Natural Gas from the Gas Supply Area.
Seller shall also furnish all supporting documentation provided by
such independent petroleum engineering consultant firm in
connection with the issuance of such Certificate.
(b) If, during the term of this Contract Seller obtains
information from its activities (including the activities of
Seller's production sharing contractors) in operating fields in the
Gas Supply Area which indicates unforeseen adverse changes in the
Proved Remaining Recoverable Reserves of Natural Gas in the Gas
Supply Area, Seller will promptly inform Buyers of such situation
and will further inform Buyers of any measures which Seller may
elect to take in order to increase the amount of Proved Remaining
Recoverable Reserves of Natural Gas in the Gas Supply Area.

ARTICLE 4 - LOADING AND TRANSPORTATION

4.1 Buyers' Obligation to Provide Transportation
Buyers shall provide, or cause to be provided, the
transportation required to transport all quantities of LNG to be
sold and delivered hereunder from the Loading Port.

4.2 LNG Tankers
Buyers will provide, or cause to be provided, for their
performance under this Contract, LNG Tankers compatible with the
marine facilities of the Badak Facility of up to approximately
two-hundred ninety (290) meters in length, up to approximately
forty-six (46) meters in width, and up to approximately eleven and
one-tenth (11.1) meters draft, which LNG Tankers shall be designed
and at all times equipped and manned so as safely to permit the
loading of a full cargo in approximately twelve (12) hours of
pumping time and to accept cargo at a rate up to approximately
eleven thousand (11,000) CBM per hour being the fun design pumping
rate of Seller's loading pumps (which rate shall be subject to
revision after mutual agreement). The provisions of this Contract
applicable to LNG Tankers shall apply whether any LNG Tanker is
owned and operated by the Buyers or otherwise.

4.3 Loading Port Facilities
(a) Seller will provide a berth, and cause to be
provided port facilities, including a channel and turning basin,
and cause to be designated a holding anchorage, all capable of
receiving an LNG Tanker of the dimensions set forth in Section 4.2,
where such LNG Tanker may safely proceed to, lie at and depart
from, always afloat at all times of the tide. Seller shall not be
obligated to provide facilities for repair of LNG Tankers.
(b) Seller will provide facilities capable of loading
LNG at an approximate rate of ten thousand (10,000) CBM per hour at
a normal operating pressure of about forty-two and one-half pounds
per square inch gauge (42.5 psig) at the Delivery Point. In any
event, pressure at the Delivery Point shall not exceed one hundred
twenty pounds per square inch gauge (120 psig).
(c) Loading Port facilities shag include:
(i) Shore tanks and loading lines for liquid
nitrogen; pipelines and connections for the
supply of fresh water; and
(ii) Appropriate systems necessary for radio and
telex communications with the LNG Tankers.

4.4 Loading Port Obligations
(a) LNG Tankers shall utilize the Loading Port
facilities subject to observance of all relevant port regulations.
Any tugs, pilots or escort vessels required (or other support
vessels required in connection with the safe berthing of an LNG
Tanker) shall be employed at, the sole risk and expense of the LNG
Tanker. Prior to each loading, Buyers' Transporter shall be
responsible for determining the availability of any nitrogen, fuel,
water and other utilities required by the LNG Tankers at the
Loading Port, which will be provided by Seller on an as available
basis for Buyers' Transporter's account.
(b) Buyers and/or Buyers' Transporter shall be
responsible for payment of amounts due for supplies and services
requested by masters of LNG Tankers and for normal port charges to
the extent such charges are uniformly applied to all LNG vessels
receiving exports of LNG from the Loading Port.

4.5 Cargo Loading
(a) The LNG to be sold and purchased hereunder shall be
pumped into LNG Tankers at the expense of Seller through manifold
strainers of sixty (60) mesh (or such other mesh as shall be agreed
from time to time by the parties) provided by the LNG Tanker and,
absent agreement of the parties or an unavoidable circumstance,
shall be in full cargo lots.
(b) The loading facilities provided by Seller shall
include a boil-off gas return system for receiving boil-off gas
from LNG Tankers. There shall be no charge for any natural gas
boiled-off from the LNG Tankers while berthed at the Loading Port
that is returned to shore. The LNG Tankers shall compress such
boil-off gas to the extent required to maintain the gas pressure in
the LNG Tanker's cargo tanks and the boil-off gas return line
within allowable operating limits during loading, and Seller shall
operate the boil-off gas return system in a manner that will permit
the gas pressure in the LNG Tanker's cargo tanks to be maintained
within the allowable operating limits of such tanks.

4.6 Notifications of Estimated Time of Arrival at Loading
Port and Cooling Requirements
(a) Buyers shall give Seller notice by telex or
facsimile of the date and hour on which each LNG Tanker departs
from an Unloading Port or drydock/repair port and the estimated
time of arrival ("ETA") at the Loading Port. Said notice shall be
submitted immediately after the LNG Tanker's departure from the
Unloading Port or drydock/repair port. Buyers shall include in
such notice to Seller a statement of:
(i) The estimated quantity of LNG that will be
required to cool the tanks to permit
continuous loading of LNG and the estimated
time that will be required for such cooling,
both of which will be based upon the date the
LNG Tanker is expected to commence loading.
(ii) Any operational deficiencies in the LNG Tanker
that may affect its port performance.
(iii) Requirements for nitrogen, fuel, water
and other utilities. Buyers shall
arrange for the LNG Tanker's master to
notify Seller regarding any change in the
ETA of twelve (12) hours or more. If the
LNG Tanker's cargo tanks should require
cooling or if the cooling or utilities
requirements or the condition of the LNG
Tanker should change on account of
circumstances discovered after
transmittal of the notice required by
this Section 4.6(a), the master of the
LNG Tanker shall give prompt notice
thereof to Seller, setting forth the
information required by the second
preceding sentence, or amending any such
information previously given to Seller.
(b) Seventy-two (72) hours prior to the LNG Tanker's
arrival at the Loading Port, the LNG Tanker's master shall give
notice by telex to Seller stating its then ETA. If this ETA should
change by more than six (6) hours, the LNG Tanker's master shall
give notice of the corrected ETA promptly to Seller.
(c) Forty-eight (48) hours prior to the LNG Tanker's
arrival at the Loading Port, the LNG Tanker's master shall give
notice by telex to Seller confirming or amending the last ETA
notice. If this ETA changes by more than six (6) hours, the LNG
Tanker's master shall give notice of the corrected ETA promptly to
Seller.
(d) Twenty-four (24) hours prior to the LNG Tanker's
arrival at the Loading Port, an ETA notice shall be sent by telex
and radio to Seller confirming or amending the last ETA notice. If
this ETA changes by more than two (2) hours, the LNG Tanker's
master shall give notice of the corrected ETA promptly to Seller.
(e) A final ETA notice shall be sent by telex and radio
five (5) hours prior to the LNG Tanker's arrival at the Loading
Port.

4.7 Berthing Assignments
Seller shall determine the berthing sequence of vessels
at the Loading Port in order to best ensure compliance with the
overall loading schedule of the Badak Facility (including the
Annual Program and Ninety-Day Schedules hereunder), and shall
notify the masters of LNG Tankers via the ship's agent of their
berthing priority upon receipt of Notice of Readiness.

4.8 Vessels not Ready for Loading
(a) If an LNG Tanker arrives which is not ready to load
for any reason, Seller may or may not allow it to berth. In the
case of an LNG Tanker only requiring cooldown to be ready to load,
Seller shall not defer berthing by reason thereof if either such
cooldown was provided for in the most recent Ninety-Day Schedule or
the cooldown time is not expected to exceed six (6) hours.
Whenever Buyers notify Seller that an LNG Tanker will require
cooldown, Seller shall make provision therefor in the Ninety-Day
Schedule as soon as Seller can do so without disrupting the overall
loading schedule or operations of the Badak Facility.
(b) If any LNG Tanker previously believed to be ready
for loading or cooling is found to be unready after being berthed,
Seller may direct the master to vacate the berth and proceed to
anchorage, whether or not other vessels are awaiting a berth,
unless it appears reasonably certain that the LNG Tanker at the
berth can be readied within four (4) hours and Seller has not
concluded that such LNG Tanker is unsafe.
(c) When the LNG Tanker at anchorage is ready, the
master will notify Seller. Seller shall assign a berth to any such
LNG Tanker or to any LNG Tanker awaiting cooldown at anchorage as
soon as Seller is able to do so without disrupting Seller's loading
requirements or operations.

4.9 Notice of Readiness
As soon as the LNG Tanker is securely moored at the berth
or securely anchored awaiting a berth, has received all necessary
port clearances and is able to receive LNG for loading or cooling,
the master shall give notice of readiness to Seller ("Notice of
Readiness"); provided, however, that in the event an LNG Tanker
should arrive at the Loading Port prior to the date established in
the Ninety-Day Schedule (and any revisions thereof except those
made after the LNG Tanker has commenced its voyage to the Loading
Port unless made as a result of delays caused by the operations of
the LNG Tankers), Notice of Readiness shall be deemed effective at
the earlier of (i) 0:00 a.m. local time on the scheduled loading
date, or (ii) the time loading commences.

4.10 Tank Temperature for Loading and Statement of Cooling
Time
Buyers shall cause Buyers' Transporter after each
discharge of a cargo at an Unloading Port to retain on board each
LNG Tanker sufficient LNG, based on normal operations of the LNG
Tanker (subject to making adequate provision for any LNG Tanker
mechanical problems of which Buyers' Transporter is aware), to
maintain, for a period of not less than twenty-four (24) hours
after the later of (i) the actual arrival or (ii) the scheduled
arrival date (ignoring any revision to such date made after the LNG
Tanker has commenced its voyage to the Loading Port) of such LNG
Tanker at the Loading Port, a temperature in the cargo tanks to
permit continuous loading of LNG ("Arrival Temperature
Requirement"); provided, however, that the Arrival Temperature
Requirement shall not apply upon entry into service or in cases
where the LNG Tanker proceeds from an Unloading Port to a
drydock/repair port. When an LNG Tanker requires cooling, the
master or Buyers' Representative shall so inform Seller at the time
of the first notice under Section 4.6(a) and, second, at the time
of the Notice of Readiness. After the LNG Tanker has been cooled,
the representatives of both Buyers and Seller shall sign a
statement of cooling time ("Statement of Cooling Time").

4.11 Quantities for Purging and Cooling of Tanks
Quantities of LNG required to purge and cool each LNG
Tanker to the temperature that will permit continuous loading of
LNG shall be delivered by Seller without charge to Buyers upon the
initial entry of such LNG Tanker into service and upon its return
to service after each annual scheduled maintenance period (except
that for a vessel temporarily in service as an LNG Tanker to
receive such quantities of LNG without charge to Buyers, such
vessel must remain in service for a period of not less than four
(4) continuous months). All other LNG required by the LNG Tankers
for purging and cooling shall be sold, delivered and invoiced by
Seller and paid for by the Buyer (or its designee) scheduled to
receive the cargo of LNG next to be loaded at the Contract Sales
Price applicable to such cargo, except that where any LNG Tanker
having met the Arrival Temperature Requirement needs purging or
cooldown due to an event which does not extend Allotted Loading
Time under Section 4.12(c), then the LNG required in connection
therewith shall be provided without charge. Such price shall be
applied to the total liquid quantities delivered for purging and
cooling, measured before evaporation of any part thereof occurs.
The parties will determine by mutual agreement the rates and
pressures for delivery of LNG for purging and cooling and the
method for determining quantities used for such operations.
Quantities of LNG used to bring the LNG Tankers to a temperature
permitting continuous loading of LNG shall not be applied against
the quantities required to be sold by Seller and taken, or paid for
if not taken, by Buyers under other provisions of this Contract.

4.12 Loading Time
(a) The allotted loading time for Seller to load each
LNG Tanker ("Allotted Loading Time") shall be twenty-four (24)
hours, subject to adjustment as provided below.
(b) The actual loading time for each LNG Tanker ("Actual
Loading Time") shall commence (i) six (6) hours after the time when
the Notice of Readiness is received or deemed to be effective, as
defined in Section 4.9, or (ii) when the LNG Tanker is all fast
alongside the berth and ready to receive cooldown LNG or cargo,
whichever first occurs, and shall end when the loading and return
lines of the LNG Tanker are disconnected from the Seller's loading
and return lines and all cargo papers necessary for departure
required to be furnished by Seller are delivered on board in proper
form and the LNG Tanker is permitted to proceed to sea.
(c) Allotted Loading Time shall be extended to include:
(i) The period during which proceeding from the
anchorage, berthing, loading or clearing of
the LNG Tanker to proceed to sea after
completion of loading is delayed, hindered or
suspended by a Buyer, Buyers' Transporter, LNG
Tanker master, port authority or any third
party for reasons of safety, weather or
otherwise and over which Seller has no
control;
(ii) The period of any delays attributable to the
operation of an LNG Tanker, including the
period of time such LNG Tanker: (1) awaits a
berth by reason of the exercise by Seller of
its rights under Section 4.8, or (2) receives
LNG for purging and cooldown (except when: (A)
the LNG Tanker met the Arrival Temperature
Requirement, and (B) the purging and cooldown
is not due to an event which extends Allotted
Loading Time under this Section 4.12(c));
(iii) Any period during which berthing or
loading of an LNG Tanker is delayed,
hindered or suspended by reason of force
majeure pursuant to Article 15 hereof;
and
(iv) Any period of delay caused by occupancy of the
berth:
(A) By a previous LNG Tanker, provided such
occupancy is for reasons attributable to
such LNG Tanker;
(B) By either a previous LNG Tanker or
another vessel on its scheduled loading
date (ignoring any change in the schedule
of the vessel occupying the berth made
after departure of the LNG Tanker from
the Unloading Port); or
(C) By either a previous LNG Tanker or
another vessel that arrived prior to the
LNG Tanker when the LNG Tanker arrived
after its scheduled loading date
(ignoring any change in the LNG Tanker's
scheduled loading date after departure of
the LNG Tanker from the Unloading Port),
except that there shall be no addition to
Allotted Loading Time under this clause
(C) either: (1) for any period in excess
of twenty-four (24) hours, or (2) if the
LNG Tanker arrived more than twenty-four
(24) hours prior to 0:00 a.m. local time
on the scheduled loading date of the
vessel occupying the berth (unless
loading of such vessel was necessary in
order to maintain production of the
liquefaction facilities).

4.13 Demurrage
(a) If Actual Loading Time exceeds Allotted Loading Time
(as extended in accordance with Section 4.12) in loading any LNG
Tanker, Seller shall pay to Buyers demurrage at the daily rate
provided in Buyers' Transportation Agreement but not to exceed the
daily demurrage rate payable by Seller under Seller's
Transportation Agreement, for each day or portion thereof.
(b) Buyers shall invoice Seller for amounts due under
this Section 4.13 and Seller shall pay the invoice in accordance
with Article 10.
(c) Under Buyers' Transportation Agreement, demurrage
payments to Buyers' Transporter in any calendar year will be
subject to refund to the extent that the aggregate of demurrage
payments and freight payments received by Buyers' Transporter
exceeds the minimum amount required to be paid under Buyers'
Transportation Agreement for transportation of the Fixed Quantities
in such calendar year. If Buyers receive from Buyers' Transporter
any such refund, Buyers shall promptly pay to Seller a portion
thereof calculated by multiplying the total refund by a fraction,
the numerator of which is the amount paid by Seller in respect of
demurrage hereunder during the year and the denominator of which is
the total amount received by Buyers' Transporter in respect of
demurrage during such year.

4.14 Effect of Loading Port Delays: Transportation Costs
(a) If an LNG Tanker is delayed in berthing and/or
commencement of loading, for a reason which would not result in an
extension of Allotted Loading Time under Section 4.12(c), and if as
a result of such reason the commencement of loading is delayed
beyond thirty (30) hours after Notice of Readiness has been given,
then for each full hour by which commencement of loading is delayed
beyond such thirty-hour period, Seller shall pay Buyer or its
designee for boil-off during such delay at the Contract Sales Price
applicable to the cargo of LNG next to be loaded. The hourly BTU
boil-off rate to be applied for such purpose shall be determined by
actual average boil-off experience of the LNG Tankers as determined
at appropriate intervals, but shall never exceed that quantity of
LNG on board the LNG Tanker at the commencement of the said
thirty-hour period. Buyers shall invoice Seller for amounts due
under this Section 4.14(a) and Seller shall pay the invoice in
accordance with Article 10.
(b) If there should become due from Buyers to Buyers'
Transporter at any time any of the following, namely:
(i) Any payment or payments on account of
non-utilization of an LNG Tanker resulting
from an event or circumstance of force majeure
affecting Seller caused by an LNG vessel other
than an LNG Tanker which payment or payments:
(A) shall not exceed, on a daily basis, the
daily demurrage rate provided in Section 4.13
for the first ninety (90) days, and (B) shall
be payable for any days in excess of one
hundred eighty (180) days of such LNG Tanker
non-utilization caused by such Seller force
majeure at the rate provided in Buyers'
Transportation Agreement, provided that should
Buyers' Transportation Agreement be terminated
with respect to the LNG Tanker by reason of
such event of force majeure, the payment shall
be equal to the termination pay-ment provided
for in Buyers' Transportation Agreement, and
provided further that the basis for
calculating all payments referred to in this
clause (B) is reasonable when compared with
the obligations of Seller under Seller's
Transportation Agreement in the same
circumstances; in any event the amount payable
under this clause (i) shall not exceed the
maximum amount then available by way of P. and
I. cover in respect of the LNG vessel causing
the damage, and if amounts in respect of all
damages resulting from the incident which
would be recoverable by Seller from such P.
and I. cover exceed the maximum amount then
available by way of P. and I. cover, then
there shall be a proportionate reduction in
the amount payable under this clause (i) so
that such reduced amount bears the same
relationship to the maximum amount then
available by way of P. and I. cover as the
amount otherwise payable hereunder would bear
to the total amount of Seller's damages
resulting from the incident which are
recoverable from such P. and I. cover; or
(ii) Any payment or payments on account of Buyers'
failure to provide Buyers' Transporter with
the minimum quantities of LNG required under
Buyers' Transportation Agreement, if the
deficiency is caused by the failure of Seller
to satisfy its obligations under this
Contract;
then, if and to the extent that the amount payable to Buyers'
Transporter has not been paid and is not payable to Buyers under
Section 4.13, such amount shall be paid to Buyers by Seller. This
paragraph (b) shall not require Seller to pay any amount which
becomes payable to Buyers' Transporter as the result of an event or
circumstance of force majeure affecting Buyers, or as the result of
Buyers' breach of their obligations under this Contract. It is
understood that no amount will be payable by Seller under this
paragraph (b) by reason of non-utilization of an LNG Tanker caused
by the fault or negligence of such LNG Tanker or Buyers'
Transporter. Any payments under this Section 4.14(b) shall be in
such amounts as reflect any credits to Buyers for other revenues
earned by the LNG Tanker during the period of force majeure.

Buyer shall invoice Seller for payments under this
paragraph (b) and
Seller shall pay those invoices in accordance with Article 10.

ARTICLE 5 - ONSHORE FACILITIES

5.1 Receiving Facilities
Buyers have heretofore constructed or will construct LNG
receiving terminal facilities at the Unloading Ports including,
without limitation, berthing and unloading facilities, LNG storage
tanks, vessel services facilities and regasification plants (the
"Receiving Facilities").

5.2 Badak Facility
Seller has heretofore constructed or will construct at
Bontang, East Kalimantan, liquefaction plant facilities to be used
by Seller, including, without limitation, gas transmission
pipelines, processing facilities, storage tanks, utilities,
berthing and loading facilities (the "Badak Facility").

ARTICLE 6 - DURATION OF CONTRACT

The terms of this Contract shall continue in effect until
the expiration of the parties respective obligations to sell and
purchase LNG as provided in Article 7 or the earlier termination of
this Contract pursuant to Section 10.5. If Seller and any Buyer or
Buyers so agree at least five (5) years before the time this
Contract would otherwise expire, the term of this Contract as to
such Buyer or Buyers may be extended on such terms and conditions
as may be mutually agreed.

ARTICLE 7 - QUANTITIES

7.1. Required Deliveries
During each calendar year or portion thereof specified
below (each such period being called a "Fixed Quantity Period"),
Seller shall sell to,each Buyer, and each Buyer shall purchase,
receive and pay for, or pay for if not taken, at the Contract Sales
Price, a quantity of LNG having a heating value as specified for
such Buyer for such Fixed Quantity Period (each such quantity being
called a "Fixed Quantity") as follows:
<PAGE>
<TABLE>
<CAPTION>
Fixed Fixed Quantities for Each Buyer
Calendar Quantity (billions of BTU's)
Year Period
Chubu Kansai Osaka Toho
Electric Electric Gas Gas Total

<S> <C> <C> <C> <C> <C>
1983 Aug. 25-
Dec. 31 14,685 12,301 4,767 6,366 38,119
1984-1989 Each Full Year 80,156 42,750 21,375 26,719 171,000
1990 Full Year 82,884 44,205 22,103 27,628 176,820
1991 Full Year 84,248 44,933 22,466 28,083 179,730
1992 Full Year 85,612 45,660 22,830 28,538 182,640
1993 Full Year 86,976 46,388 23,194 28,992 185,550
1994-2002 Each Full Year 88,340 47,115 23,558 29,447 188,460
2003 Jan.1-Mar.31 19,906 10,601 5,300 6,655 42,462
</TABLE>
<PAGE>
The above Fixed Quantities are subject to adjustment as
provided in Section 7.3(a). After giving effect to any such
adjustment, the term "Fixed Quantity" shall mean the applicable
Fixed Quantity as so adjusted, and the respective obligations of
Seller to sell, and each Buyer to purchase, receive and pay for, or
pay for if not taken, Fixed Quantities of LNG in any Fixed Quantity
Period, shall apply to the applicable Fixed Quantities as so
adjusted.

7.2 Reallocation of Cargoes: Rate of Deliveries
(a) Each Buyer, upon appropriate notice to Seller, may
reallocate all or part of an LNG Tanker cargo from one Buyer to
another Buyer.

In case of such reallocation, the ownership of such cargo
or part thereof shall be transferred directly from Seller to the
new Buyer in place of the original Buyer, but the respective Fixed
Quantities of the Buyers concerned shall not be changed and the
cargo in question shall be deemed to be received by the original
Buyer in connection with its take or pay obligations under Section
7.3(a).

Each such reallocation shall be documented in a form to
be established by Seller and Buyers, executed by the original Buyer
and the Buyer which win actually receive the cargo, which document
will provide that the receiving Buyer will assume and be
responsible to Seller for performance of the obligations of the
original Buyer in respect of such cargo, and that such cargo is
deemed to be taken by the original Buyer in connection with its
take or pay obligations under Section 7.3(a).

Buyers will exercise the right to reallocate cargoes in
a manner that will not materially disrupt the shipping schedules at
the Badak Facility.

(b) Within each Fixed Quantity Period the quantities to
be delivered by Seller and received by Buyers at the Badak Facility
shall be delivered and received at rates and intervals which are
reasonably constant over the course of such Fixed Quantity Period,
after taking into account all commitments of the Badak Facility and
taking into consideration the downtime, shipping and other matters
referred to in Article 12, so as to assure, as nearly as
practicable, an even production rate at the Badak Facility and an
even rate of deliveries at the Delivery Point.

7.3 Buyer's Obligation to Take or Pay
(a) If, during any Fixed Quantity Period, any Buyer
should fail to take the full Fixed Quantity applicable thereto,
such Buyer shall pay Seller, at the Contract Sales Price in effect
as of the last day of such Fixed Quantity Period, for the
quantities of LNG required to be purchased but which were not taken
by such Buyer during such Fixed Quantity Period (any such quantity
deficiency being called a "Quantity Deficiency"), subject, however,
to paragraphs (b), (c) and (d) below and the following:

(i) If, after taking into account all adjustments
provided for in this Section 7.3 including any
Allowance that has been exercised, the Quantity
Deficiency of a Buyer at the end of any Fixed
Quantity Period amounts to less than 2.9 trillion
BTU'S, the amount of such Quantity Deficiency shall
be carried forward and added to the Fixed Quantity
of such Buyer for the next succeeding Fixed Quantity
Period; provided that notwithstanding the foregoing,
if the total Quantity Deficiency of those Buyers
whose Quantity Deficiency is less than 2.9 trillion
BTU's shall exceed 5.8 trillion BTU's, the amount of
carry forward for such Buyers shall be determined as
follows:

(A) Any Buyer who has a Round-Up Request denied
shall carry forward its Quantity Deficiency;

(B) Any Buyer, other than a Buyer to whom (A) next above
applies, shall carry forward the amount of such
Quantity Deficiency up to 1.45 trillion BTU'S; and

(C) Any Buyer whose Quantity Deficiency has not been
fully carried forward under (A) or (B) next above
shall in addition carry forward its share of the
amount equal to 5.8 trillion BTU's minus the total
carry forward amount allowed under (B) above,
allocated among all such Buyers in proportion to the
amount by which each of their respective Quantity
Deficiencies exceeds 1.45 trillion BTU's (calculated
to the nearest million BTU's).

The amount carried forward pursuant to this clause (i)
shall be deducted from the Quantity Deficiency of such
Buyer and each Buyer to whom this clause (i) applies
shall be subject to take or pay pursuant to this Section
7.3 only if and to the extent any Quantity Deficiency
remains after such deduction.

(ii) If, at the time each Annual Program is
developed, the Quantity Deficiency of a Buyer
for the applicable year is estimated to amount
to less than a full cargo, such Buyer shall
have the right to request an increase in the
quantities which such Buyer wishes to take in
such year in an amount sufficient to fill out
such cargo (such right being herein referred
to as a "Round-Up Request"). Any such
Round-Up Request shall not, however, increase
the Fixed Quantity of such Buyer. If Buyer
does not make a Round-Up Request, or if Seller
elects not to honor such Round-Up Request, the
non-delivery of the partial cargo of Fixed
Quantity shall not constitute a failure of
Seller to make LNG available for sale for the
purpose of paragraph (b) below.

(iii) At the time the Annual Program is being
prepared for 1994 or any subsequent year, the
Fixed Quantities shall be adjusted at the
request of Buyers to effect the acceleration
by one year of up to 2,910 billion BTU's if
necessary to ensure that, taking into account
scheduled drydockings, Buyers have adequate
shipping capacity to transport the Fixed
Quantities during the year following that for
which the Annual Program is being prepared.
Such acceleration shall be effected by an
appropriate increase to the Fixed Quantity of
a single Buyer or appropriate increases to the
Fixed Quantities of all or a number of Buyers,
as specified in such Buyers' request.
Corresponding decreases shall be made to the
Fixed Quantity or Fixed Quantities of the same
Buyer(s) for the Fixed Quantity Period
following the Fixed Quantity Period during
which such acceleration occurs.

(iv) If, at the end of any Fixed Quantity Period, a
Buyer has purchased and received quantities of
LNG hereunder in excess of the Fixed Quantity
of such Buyer for such Fixed Quantity Period
other than Make-Up LNG, Make-Good LNG or
Restoration Quantities, the excess shall be
applicable to reduce the Fixed Quantity of
such Buyer for the next succeeding Fixed
Quantity Period.

(b) The obligations (set forth in paragraph (a) above)
of each Buyer with regard to any Fixed Quantity Period to pay for
Fixed Quantities not taken shall be reduced by the quantity of LNG
which such Buyer was unable to purchase because of an event of
force majeure as defined in Article 15 affecting either Seller or
such Buyer or because of Seller's failure for any other reason to
make such quantity available for sale in accordance with this
Contract.
(c) In calculating the quantity of LNG delivered by
Seller and purchased by a Buyer for each Fixed Quantity Period,
quantities delivered and purchased within the first seven (7) days
of the next following Fixed Quantity Period shall be included,
provided such quantities were scheduled in the Annual Program for
the Fixed Quantity Period with respect to which the calculation is
being made.
(d) The obligation of a Buyer pursuant to paragraph (a)
above to pay for quantities not taken may be reduced by the
exercise of an Allowance as follows:

(i) Each Allowance must be exercised by notice in
writing given to Seller by Buyers' Coordinator,
which will act as agent for Buyers in connection
with the exercise of all Allowances. A notice of
the exercise of an Allowance given by Buyers'
Coordinator shall be deemed to have both the
authority of the Buyer on whose behalf it is
expressed to be given (the "Exercising Buyer") and
the consent of all other Buyers. No purported
direct exercise of an Allowance by a Buyer shall be
valid. A notice of exercise of an Allowance must be
received by Seller on or before January 12 of the
year following the Fixed Quantity Period in respect
of which such Allowance is exercised.

(ii) Each notice of exercise of an Allowance shall
specify the Exercising Buyer and the quantity
of LNG by which such Buyer's obligation to
take and/or pay during the relevant Fixed
Quantity Period is to be reduced.

(iii) No Allowance can be exercised which would
result in the aggregate Allowances then
outstanding for all Buyers during any Fixed
Quantity Period prior to 1994 being in excess
of five percent (5%) of the total Fixed
Quantities for all Buyers for such Fixed
Quantity Period, or thereafter being in excess
of 9,423 billion BTU'S. Subject to the
provisions of subparagraph (viii) below, an
Allowance (or portion thereof) is outstanding
until either the Make-Good Obligation pursuant
to subparagraph (iv) below is satisfied or
payment in respect thereof is made pursuant to
subparagraph (vi) below.
(iv) Each Allowance shall be made good in full
(even if it amounts to a fractional portion of
a full cargo lot) by the purchase of an equal
quantity of LNG in excess of Fixed Quantities
("Make-Good LNG") within a period
("Allowance.Restoration Period") commencing
January 1 of the year following the Fixed
Quantity Period in relation to which such
Allowance was exercised and ending with the
earlier of the expiration of five (5) calendar
years or June 30, 2003. No Buyer may satisfy
a Make-Good Obligation or any part thereof
during a Fixed Quantity Period until it shall
first have taken its Fixed Quantity for such
Fixed Quantity Period. If a Buyer has more
than one Allowance outstanding, the Make-Good
Obligations in respect thereof shall be
satisfied in the same chronological order in
which such Allowances were exercised. One or
more Buyers may satisfy the Make-Good
Obligation with respect to an. Allowance
exercised by another Buyer.

(v) Every request for Make-Good LNG shall be made by
Buyers' Coordinator on behalf of a named Buyer in
accordance with Section 12.1 and shall specify the
Allowance to which it relates. Each such request
shall be deemed to have the authority of the named
Buyer and, if the named Buyer is not the Exercising
Buyer, of the Exercising Buyer.

(vi) If, at the expiration of the Allowance
Restoration Period, a MakeGood Obligation has
not been satisfied in full, the Exercising
Buyer (whether or not a Buyer other than the
Exercising Buyer was named in any relevant
request for Make-Good LNG) shall pay for any
unsatisfied portion of the Make-Good
Obligation at the Contract Sales Price in
effect as of the last day of such Allowance
Restoration Period; provided, however, that
for the purposes of determining such Contract
Sales Price, "R" under Section 8.2 shall be
the value shown for the year in which such
Allowance was exercised. The Buyer shall have
the right to request Make-Up LNG pursuant to
Section 7.5 with respect to any such payment.

(vii) Seller shall not be obligated to reserve any
LNG production or shipping capacity for the
purposes of permitting Buyers to satisfy
Make-Good Obligations. -

(viii) In the event that Buyers' Coordinator requests
quantities of LNG to satisfy a Make-Good
Obligation on behalf of a Buyer or Buyers
which Seller is unable to make available for
any reason including force majeure, the
following provisions shall apply:

(A) The Exercising Buyer shall be relieved from
the obligation pursuant to subparagraph (vi)
above to pay for such requested quantities as
of the expiration of the Allowance Restoration
Period relating thereto, except in the case
where subparagraph (viii)(C) below requires
such payment;

(B) Such requested quantities shall be deemed not
outstanding for the purposes of subparagraph
(iii) above until Seller shall (whether during
or after the Allowance Restoration Period)
have offered the same to such Buyer but shall
then be outstanding if such Buyer does not
accept such offer; any change in the quantity
outstanding due to a failure to accept such an
offer shall not result in an acceleration of
any then outstanding Make-Good Obligation; and

(C) Such requested quantities shall be scheduled
for delivery at any time prior to June 30,
2003 as mutually agreed by Seller and the
Buyer having the Make-Good Obligation. If
such requested quantities have not been
scheduled as of the end of the last Fixed
Quantity Period and should Seller be unable to
deliver such requested quantities during the
three (3) months following the last Fixed
Quantity Period, Buyer shall have no further
obligation in respect thereof. If Seller
gives Buyer reasonable notice that such
requested quantities are available during such
three-month period but Buyer does not take
such quantities, Buyer shall then make the
payment required under subparagraph (vi)
above.

(e) A reduction shall be made to any Quantity Deficiency
equal to the amount by which such Quantity Deficiency resulted from
a partial loading of an LNG Tanker during the relevant Fixed
Quantity Period due to reasons attributable to Seller.

(b) If such an event of force majeure does not preclude
full production and loading of all Fixed Quantities under the
allocation formula described in paragraph (a) above but is of such
an extent as to prevent Seller from producing and loading all
Make-Up LNG, Make-Good LNG and Restoration Quantities scheduled for
delivery from the Badak Facility to Buyers and equivalent
quantities scheduled for- delivery from the Badak Facility to,
other purchasers under LNG sales contracts providing for deliveries
over a term of at least fifteen (15) years, quantities of such LNG
as are available shall be allocated between Buyers and such other
purchasers in proportion to the respective quantities so scheduled.

7.5 Take-or-Pay Make-Up
If pursuant to Section 73 (a) or Section 7.3 (d) (vi) a
Buyer shall have paid for any quantity of LNG which was not taken
by such Buyer ("Take-or-Pay Quantity") then in any subsequent year
the said Buyer may purchase up to an equal quantity of LNG from
Seller as make-up LNG ("Make-Up LNG") (to the extent not previously
made up). A Buyer may request Make-Up LNG by giving written notice
to Seller as provided in Section 12.1. If, during any year for
which Make-Up LNG has been requested , (i) Seller has uncommitted
quantities of LNG available for such purposes and (ii) such Buyer
shall have first taken and paid for its Fixed Quantity for such
year, then Seller shall sell to such Buyer the quantity of Make-Up
LNG requested. A Buyer's right to purchase Make-Up LNG under this
Section 7.5 shall expire on March 31, 2004 unless such Buyer shall
have requested Make-Up LNG during the preceding twelve (12) months
and Seller shall have had insufficient uncommitted LNG to meet such
request. In such circumstances, the parties shall consult to agree
upon a deferred schedule for Buyer to take delivery of any
outstanding balance of Take-or-Pay Quantity not made up by March
31, 2004. Each Buyer shall pay for Make-Up LNG at the Contract
Sales Price in effect as of the date of delivery, reduced by the
amount previously paid on account of all or that part of the
Take-or-Pay Quantity being made up by such sale. Take-or-Pay
Quantities shall be made up, and prior payments applicable thereto
applied, in the same chronological order in which such quantities
accrued.

7.6 Force Majeure Deficiency
(a) If during any Fixed Quantity Period or Fixed
Quantity Periods all or any portion of the Fixed Quantity of LNG
required to be taken by any Buyer therein is not delivered by
Seller or taken by such Buyer by reason of force majeure as defined
in Article 15 (any such quantity not taken for such reason being
called a "Force Majeure Deficiency"), Seller and the Buyer or
Buyers concerned shall each make best efforts to restore the Force
Majeure Deficiency in full by Seller selling and the Buyer or
Buyers purchasing such quantities of LNG prior to the expiration of
the last Fixed Quantity Period. The restoration quantities so
agreed ("Restoration Quantities") will be scheduled for delivery
pursuant to Article 12 at the mutual convenience of the parties.
Such Restoration Quantities shall be subordinate to Make-Good LNG
requested pursuant to Section 7.3(d) and Make-Up LNG requested
pursuant to Section 7.5.
(b) If an event of force majeure relieves or delays the
performance by any Buyer of its obligations under this Contract and
causes a reduction in deliveries of LNG, and Seller sells to third
parties quantities of LNG which Buyers are unable to purchase, then
the Force Majeure Deficiency shall be reduced by the amount, if
any, that the Seller's Gas Supply Obligation (including amounts so
sold to third parties) exceeds the estimate of Proved Remaining
Recoverable Reserves stated in the most recent Certificate as a
result of such sales.

7.7 Allocation of Make-Good LNG, Make-Up LNG and Restoration
Quantities
Whenever Make-Good LNG is requested under Section 7.3(d),
Make-Up LNG is requested under Section 7.5 and/or Restoration
Quantities are requested under Section 7.6(a) by a Buyer or Buyers,
and quantities are requested for similar purposes by other
purchasers from the Badak Facility, and uncommitted quantities of
LNG are not available from the Badak Facility to meet all such
requests, then the quantities of LNG which are available from the
Badak Facility for such purposes shall be allocated, as between
such Buyer or Buyers on the one hand and such other purchasers on
the other hand, based on the proportion of the contract quantities
of each requesting purchaser to the total of the contract
quantities of all of the requesting purchasers.

7.8 Order of Priority of Make-Good LNG and Make-Up LNG

Make-Good LNG requested under Section 7.3(d) and Make-Up
LNG requested under Section 7.5 shall be delivered in the priority
specified by Buyers' Coordinator.

ARTICLE 8 - CONTRACT SALES PRICE

8.1 Initial Contract Sales Price
The Initial Contract Sales Price applicable, as of
January 1, 1981, to the quantities of LNG to be sold at the
Delivery Point and to any quantities of LNG required to be taken
but which are not taken and are required to be paid for by a Buyer
under this Contract, expressed in United States Dollars per million
British Thermal Units (U.S.$/MMBTU), shall be U.S. $5.87 (the
"Initial Contract Sales Price").

8.2 Contract Sales Price and Adjustments Thereto
The Initial Contract Sales Price is subject to adjustment
from time to time according to the following provisions of this
Article 8, and such price as adjusted and in effect at any time
shall be the contract sales price (the "Contract Sales Price")
which is in effect hereunder at such time. The Contract Sales
Price to be applied to the BTU's comprising each cargo shall be
that Contract Sales Price in effect as of the date of completion of
loading of such cargo.
A Contract Sales Price adjustment shall be made as of
each effective date on which either: (i) the realized export prices
(except premiums and except prices for spot sales) of more than one
of the field classifications of Indonesian crude oils then being
sold and exported shall have changed from the respective prices
therefor included in the last preceding Contract Sales Price
adjustment made pursuant to this Section 8.2, (ii) two or more
field classifications of such crude oils shall have been added to
or deleted from the field classifications of crude oils being
exported from Indonesia, since the date of the last preceding
Contract Sales Price adjustment made pursuant to this Section 8.2
or (iii) January 1 of each year in which the value of "R" changes.
The export price and classification data required to make the above
determination shall be verified by the Ministry of Mines and Energy
of the Republic of Indonesia. In every case such adjustment is to
be made in accordance with the following formula:
PA = Po Ax R
Ay

in which PA = the Contract Sales Price as such term is used
herein (as

expressed in U.S.$/MMBTU).

PO = the Initial Contract Sales Price.

Ax = the arithmetic average of the realized export
prices in U.S.

Dollars per barrel, f.o.b. Indonesia, of all
field classifications of Indonesian crude oils
then being sold and exported, except premiums
and except such prices for spot sales.

Ay = U.S.$35.69, being the arithmetic average on
January 1, 1981 of the realized export prices
in U. S. Dollarsper barrel,f.o.b. Indonesia,
of all field classificationsof Indonesiancrude
oils then being sold and exported, except
premiums and except such prices for spot
sales.

R = U.S.$O.04/MMBTU during the calendar year 1990

U.S.$O.06/MMBTU during the calendar year 1991

U.S.$O.08/MMBTU during the calendar year 1992

U.S.$O.10/MMBTU during the calendar year 1993

U.S.$O.12/MMBTU from and after January 1, 1994

provided, however, that during such period or periods as the
Contract Sales Price shall be less than 98.2 percent of the LNG
Element of the contract sales price calculated pursuant to the
formula set forth in the 1973 LNG Sales Contract (the "Floor
Price") then such Floor Price shall be substituted for the product
of the above formula and shall become the Contract Sales Price
hereunder.

ARTICLE 9 - TRANSFER OF TITLE

Delivery shall be deemed completed and title and risk of
loss shall pass from Seller to the purchasing Buyer as the LNG
reaches the Delivery Point.

ARTICLE 10 - INVOICES AND PAYMENT

10.1 Cargo Invoices and Documents
Promptly after completion of loading of each LNG Tanker,
Seller, or its representative, shall furnish to the receiving
Buyer, or Buyers' Representative, a certificate of quantity loaded
together with such other documents concerning the cargo as may be
reasonably requested by Buyers for the purpose of Japanese customs
clearance. Seller shall further, within forty-eight (48) hours of
completing, the loading, cause a laboratory analysis to be
completed to determine the quality of the LNG and shall promptly
furnish Buyer, or Buyers' Representative, a certificate with
respect thereto together with details of the calculation of the
number of BTU's sold. Promptly upon completion of such analysis
and calculation, Seller, or its representative, shall furnish by
telex or telegram to the receiving Buyer an invoice, stated in U.S.
Dollars in the amount of the Contract Sales Price for the number of
BTU's sold together with component MOL fractions, temperature,
pressure and volume delivered. At the same time, Seller shall send
Buyer a signed copy of the invoice and relevant documents showing
the basis for the calculation thereof.

10.2 Other Invoices
In the event that any monies are due from one party to
the other
hereunder, including, without limitation, amounts payable pursuant
to Section 73 on account of Fixed Quantities of LNG required to be
purchased but which were not taken by such Buyer, then the party to
whom such monies are due shall furnish or cause to be furnished an
invoice therefor and relevant documents showing the basis for the
calculation thereof. The procedure set forth in Section 10.1 for
sending a copy of such invoice by telex or telegram may be
followed.
10.3 Invoice Due Dates
Each invoice to a Buyer referred to in Section 10.1 above
shall become due and payable by such Buyer on the eighth (8th)
Business Day in Japan after the date on which the invoice (which
may be in telex or telegraphic form) has been received by Buyer in
Japan.

Each other invoice to a Buyer hereunder shall become due
and payable by such Buyer within twenty (20) calendar days after
the date of Buyer's receipt of such invoice in Japan.

Each invoice delivered to Seller shall become due and
payable on the fourteenth (14th) calendar day after Seller's
receipt thereof.

If any invoice due date is not a Business Day in Japan,
such invoice shall become due and payable on the next day which is
a Business Day in Japan.

In the event the full amount of any invoice is not paid
when due, any unpaid amount thereof shall bear-interest from the
due date until paid, at an interest rate compounded annually, two
percent (2%) greater than the rate or rates being charged during th
!-,Period of delinquency by Citibank, N.A-, New York, New York, to
its prime commercial customers for ninety-day loans. Such interest
rate shall be adjusted, up or down as the case may be, to reflect
any changes in the aforesaid prime rate as of the dates of such
changes in the prime rate. In the event that Citibank, N.A- shall
for any reason cease quoting a prime rate as described above, then
a comparable rate shall be determined using rates then in effect
and shall be used in place of the said prime rate.

10.4 Payment
Each Buyer shall pay, or cause to be paid, in U.S.
Dollars all amounts which become due and payable by such Buyer
pursuant to any invoice issued hereunder, to a bank account or
accounts in the United States to be designated by Seller., Seller
shall pay, or cause to be paid, in U.S. Dollars all amounts which
become due and payable by Seller pursuant to any invoices issued
hereunder to a bank account in Japan designated by Buyers. - The
paying party shall not be responsible for a designated bank's
disbursement of amounts remitted to such bank, and a deposit in
immediately available funds of the full amount of each invoice with
such bank shall constitute full discharge and satisfaction of the
obligations under this Contract for which such amounts were
remitted. Each payment of any amount owing hereunder shall be in
the full amount due without reduction or offset for any reason,
including, without limitation, taxes, exchange charges or bank
transfer charges.
Transfer of funds to the bank in the United States,
effected from Japan before the close of business in Japan o n or
before the due date of any invoice shall be deemed timely payment
notwithstanding that such U.S. bank cannot credit such transfer as
immediately available funds for a period of up to fourteen (14)
hours by reason of the time difference between Japan and the United
States, or for one or more days which are not banking days in the
United States.

10.5 Seller's Rights Upon Buyer's Failure to Make Payment
If payment of any invoice for quantities of LNG sold
hereunder or for Fixed Quantities of LNG not taken and for which a
Buyer is obligated to pay pursuant to this Contract is not made
within sixty (60) days after the due date thereof, Seller shall be
entitled, upon giving thirty (30) days' written notice to such
Buyer, to suspend subsequent sales to such Buyer until the amount
of such invoice and interest thereon has been paid, and such Buyer
shall not be entitled to any make-up rights in respect of such
suspended sales. If any such invoice is not paid within one
hundred twenty (120) days after the due date thereof, then, subject
to the further provisions of this Section 10.5, Seller shall have
the right at Seller's election, upon not less than eighty (80)
days' notice to Buyer or Buyers, as the case may be, to exercise
either of the following options:
(i) Seller may terminate this Contract in respect of
the defaulting Buyer only, in which event this
Contract shall continue in effect between Seller
and the other Buyers just as though the defaulting
Buyer had never been a party and the quantities of
LNG thereafter to be purchased and received by such
defaulting Buyer had never been included in this
Contract; or

(ii) Seller may terminate this Contract in its entirety
as to Buyers unless prior to such termination
arrangements shall have been made which are
satisfactory to Saner for the payment of all
amounts owed Seller by the defaulting Buyer and for
the assumption of the LNG quantity and other
obligations of the defaulting Buyer under this
Contract by one or more Buyer(s) not defaulting.

Termination by Seller under clause (i) or (ii) above shall become
effective upon the date specified in such notice from Seller. Any
such termination shall be without prejudice to any other rights and
remedies of Seller arising hereunder or by law or otherwise,
including the right of Seller to receive payment of all obligations
and claims which arose or accrued prior to such termination or by
reason of such default by a Buyer or Buyers.

10.6 Disputed Invoices

In the event of disagreement concerning any invoice,
the invoiced party shall make provisional payment of the total
amount thereof and shall immediately notify the other party of the
reasons for such disagreement except that in the case of obvious
error in computation the correct amount shall be paid disregarding
such error. Invoices may be contested or modified only if, within
a period of ninety (90) days after receipt thereof, Buyer or Seller
serves notice on the other, questioning their correctness. If no
such notice is served, invoices shall be deemed correct and
accepted by both parties. Promptly after resolution of any dispute
as to an invoice, the amount of any overpayment or underpayment
shall be paid by Seller or Buyer to the other, as the case may be,
plus interest at the rate provided in Section 10.3 from the date
payment was due to the date of payment.
ARTICLE 11 - QUALITY
11.1 Gross Heating Value
The LNG when delivered by Seller to Buyers shall
have,in a gaseous state, a Gross Heating Value of not less than
1065 BTU per Standard Cubic Foot and not more than 1165 BTU per
Standard Cubic Foot. The expected range will be between 1105 and
1160 BTU per Standard Cubic Foot.

11.2 Components
The LNG delivered by Seller to. Buyers shall, in a
gaseous state, contain not less than eighty-five molecular
percentage (85 MOL%) of methane (CH4) and, for the components and
substances listed below, such LNG shall not contain more than the
following:

A. Nitrogen (N2), 1.0 MOL%.
B. Butanes (C4) and heavier, 2.00 MOL%.
C. Pentanes (C5) and heavier, 0.10 MOL%.
D. Hydrogen sulfide (H2S), 0.25 grains per 100
Standard Cubic Feet
(0.25 grains/100 scf).
E. Total sulfur cont!i!t, 1.3 grains per 100 Standard
Cubic Feet (1.3 grains/100 scf).

Although the LNG which Seller delivers to Buyers is
permitted to contain the sulfur concentrations shown in clauses D
and E above, under normal operating conditions at the Badak
Facility, Seller would expect such concentrations to be materially
less.

Should any question regarding quality of the LNG arise,
Buyers and Seller shall consult and cooperate concerning such
questions.
ARTICLE 12 - SCHEDULING
12.1 Annual Program
(a) Not later than ninety (90) days prior to the
beginning of each calendar year commencing with the year in which
the first Fixed Quantity Period occurs, Seller shall give written
notice to Buyers of the anticipated quantities of LNG to be
available for sale hereunder from the Badak Facility for each
calendar quarter of the next calendar year, specifying any
scheduled downtime of the Badak Facility. On or before October 15
of. each year in which such notice is given, each Buyer shall
advise Seller in writing of. (i) the quantities such Buyer wishes
to take during each calendar quarter of the following year,
specifying the amount of any Make-Up LNG requested pursuant to
Section 7.5 and any Restoration Quantities in excess of Fixed
Quantities requested pursuant to Section 7.6, and (ii) any- planned
downtime for Receiving Facilities, Buyers' shipping capacity and
scheduled drydocking for LNG Tankers. In addition, by October 15
of each year Buyers' Coordinator shall request any Make-Good LNG
pursuant to Section 7.3 (d).
Seller and Buyers shall thereupon consult together with
a view to reaching agreement by December 1st of the same year and
Seller shall issue a programming schedule, including provisional
loading dates, for quantities sold hereunder to be loaded in full
cargo lots at the Badak Facility during each calendar month during
the following year (the "Annual Program"), and in so doing Seller
and Buyers shall take into consideration the contents of the above
notices. The Annual Program shall take into account Seller's
commitments to other purchasers of LNG from the Badak Facility.
Such Annual Program and the Ninety-Day Schedules referred to below
(and any revisions thereof) are intended to assist the parties in
planning their respective operations during the periods involved.
The content of the Annual Program and Ninety-Day Schedules shall
not reduce the entitlement of any party during any Fixed Quantity
Period to sen and be paid for, or to purchase and receive, as the
case may be, the quantities of LNG required under Article 7 to be
sold and paid for during such Fixed Quantity Period. Seller and
Buyers will each take all appropriate steps to carry out each
Annual Program and Ninety-Day Schedule.

(b) An Annual Program shall be amended to reflect a
request for:
(i) Make-Good LNG relating to an Allowance
exercised in respect of the immediately
preceding year;
(ii) Make-Up LNG relating to a Take-or-Pay
Quantity paid for in respect of the
immediately preceding year; or
(iii) Restoration Quantities relating to a
Force Majeure Deficiency arising in
respect of the immediately preceding
year;

provided that the requested LNG is available and such request is
received by Seller not later than January 15 of the year to which
such Annual Program relates.

12.2 Ninety-Day Schedules
Not later than the fifteenth (15th) day of each calendar
month, Seller shall, after discussion with each Buyer, deliver to
each Buyer a three-month forward plan of loadings (the "Ninety-Day
Schedule"), which follows the applicable Annual Program (or most
current draft thereof) as nearly as practicable and sets forth the
projected dates of loadings for each of the next three (3) calendar
months. Each Ninety-Day Schedule shall reflect all adjustments, if
any, necessitated by deviation from prior Ninety-Day Schedules so
as to maintain as far as practicable the loadings forecast in the
Annual Program. Both parties shall cooperate to facilitate smooth
performance of the Ninety-Day Schedule. After consultation with
Buyers, Seller shall revise the Ninety-Day Schedule when
appropriate to meet operational requirements with the overall
objective of fulfilling the Annual Program as far as practicable,
taking into account any requests of Buyers for adjustments.
ARTICLE 13 - MEASUREMENTS AND TESTS
13.1 Parties to Supply Devices
Buyers shall supply, operate and maintain, or cause
to be supplied, operated and maintained, suitable gauging devices
for the LNG tanks of the LNG Tankers, density, pressure and
temperature measuring devices, and any other measurement or testing
devices which are incorporated in the structure of LNG Tankers or
customarily maintained on shipboard.
Seller shall supply, operate and maintain, or caused to
be supplied, operated and maintained, devices required for
collecting samples and for determining quality and composition of
the LNG and any other measurement or testing devices which are
necessary to perform the measurement and testing required hereunder
at the Badak Facility.

13.2 Selection of Devices

All devices provided for in this Article 13 shall

be chosen by mutual agreement of the parties and shall be such
that at the time of selection are the most accurate and reliable
devices in their practical application. The required degree of
accuracy of such devices selected shall be mutually agreed upon and
verified by Buyers and Seller in advance of their use, and at the
request of either Buyer or Seller such degree--of accuracy shall be
verified by an independent surveyor mutually agreed upon by such
Buyer and Seller.

13.3 Units of Measurement and Calibration
The parties will cooperate closely in the design,
selection and acquisition of devices to be used for measurements
and tests under this Article 13 in order that, to the maximum
extent possible, all measurements and tests may be conducted either
in American units of measurement or in metric units of measurement.
In the event that it becomes necessary to make measurements and
tests using a new system of units of measurement, the parties shall
establish mutually agreeable conversion tables, or, if they are
unable to agree, such tables may be established by the procedures
provided for resolution of disputes on measurement and testing in
Section 13.11. Measurement devices shall be calibrated as follows:
Measurement American Units Metric Units

Volume Cubic feet Cubic meters

Temperature Degrees Fahrenheit Degrees Centigrade

Pressure Pounds per square Kilograms per square
inch or inches of centimeter or
mercury millimeters of
mercury

Length Feet Meters

Weight Pounds Kilograms

Density Pounds per cubic Kilograms per cubic
foot meter

13.4 Tank Gauge Tables of LNG Tankers
Buyers shall provide Seller, or cause Seller to be
provided, with a certified copy of tank gauge tables for each tank
of each LNG Tanker verified by a competent impartial authority or
authorities mutually agreed upon by the parties. Such tables shall
include correction tables for list, trim, tank construction and any
other items requiring such tables for accuracy of gauging. Seller
and Buyers shall each have the right to have representatives
present at the time each LNG tank on each LNG Tanker is
volumetrically calibrated. If the LNG tanks of any LNG Tanker
suffer distortion of such nature as to cause a prudent expert
reasonably to question the validity of the tank gauge tables
described herein (or any subsequent calibration provided for
herein), any Buyer or Seller may require recalibration of such LNG
tanks during any period when the LNG Tanker is out of service for
inspection and/or repairs. Upon recalibration of the LNG tanks of
the LNG Tankers, the same procedures used to provide the original
tank gauge tables will be used to provide revised tank gauge
tables based upon the recalibration data. The calibration of tanks
provided for in this Section 13.4 shall constitute the only
calibration required for purposes of this Contract.

13.5 Gauging and Measuring LNG Volumes Delivered
Volumes of LNG delivered pursuant to this Contract shall
be determined by gauging the LNG in the tanks of the LNG Tankers
before and after loading.
Gauging the liquid in the tanks of the LNG Tankers and
measuring of liquid temperature, vapor temperature, vapor pressure
and liquid density in each LNG tank, trim and list of the LNG
Tankers, and atmospheric pressure shall be performed, or caused to
be performed, by the Buyer purchasing the LNG, before and after
loading.

The first gauging and measurements shall be made
immediately before the commencement of loading. The second gauging
and measurements shall take place immediately after the completion
of loading.
Copies of gauging and measurement records shall be
furnished to Seller.

A. Gauging the Liquid-Level of LNG
The level of the LNG in each LNG tank of the LNG Tanker
shall be gauged by means of the gauging device installed in the LNG
Tanker for that purpose. The level of the LNG in each tank shall
be logged or printed.

B. Determination of Temperature
The temperature of the LNG and of the vapor space in each
cargo tank shall be measured by means of a sufficient number of
properly located temperature measuring devices to permit the
determination of average temperature. Temperatures shall be logged
or printed.

C. Determination of Pressure
The pressure of the vapor in each LNG tank shall be
determined by means of pressure measuring devices installed in each
LNG tank of the LNG Tankers. The atmospheric pressure shall be
determined by readings from the standard barometer installed in the
LNG Tankers.

D. Determination of Density
Density of the LNG shall be computed by Seller or, if
mutually agreed, measured. Initially the density of the LNG will
be computed by the method described in Schedule A attached hereto.
Should any improved data, method of calculation or direct
measurement device become available which is acceptable to both
Buyers and Seller, such improved data, method or device shall then
be used. If density is determined by measurements, the results
shag be logged or printed.
13.6 Samples for Quality Analysis
Representative samples of the LNG delivered shall be
obtained, or be caused to be obtained, in triplicate by Seller
during the time of loading. The three (3) samples shall be taken
from an appropriate point on Seller's loading line as close as
possible to the loading flanges and collected in the gaseous state
using the continuous gasification/collection method agreed by
Buyers and Seller.
In addition periodic samples shall be obtained
during loading. Should Seller determine that it is necessary to
utilize periodic samples, the composition of the LNG delivered to
each LNG Tanker shall be the arithmetic average of the results
obtained by analysis of such samples. The method and devices for
sampling and the quantity of the samples to be withdrawn shall be
determined by agreement between Buyers and Seller to provide for
taking representative and adequate samples of the LNG delivered.
The samples obtained shall be distributed as follows:

First sample - for use of Seller.
Second sample - for use of Buyer receiving the LNG
shipment.
Third sample - for retention by Seller for the
agreed period, not to exceed
twenty-five (25) days, during which
period any dispute as to the
accuracy of any analysis shall be
raised, in which case the sample
shall be further retained until such
Buyer and Seller agree to retain it
no longer.
13.7 Quality Analysis
The samples provided for in Section 13.6 shall be
analyzed, or be caused to be analyzed, by Seller to determine the
molar fraction of the hydrocarbon and other components in the
sample by gas chromatography using a mutually agreed method in
accordance with "G.P.A. Standard 2261, Method of Analysis for
Natural Gas and Similar Gaseous Mixtures by Gas Chromatography",
published by G.P.A., current as of January 1, 1977 or as otherwise
mutually agreed upon. If better standards for analysis are
subsequently adopted by G.P.A. or other recognized competent
impartial authority, upon mutual agreement of Buyers and Seller,
they shall be substituted for the standard then in use, but such
substitution shall not take place retroactively. A calibration of
the chromatograph or other analytical instrument used shall be
performed by Seller immediately prior to the analysis of the sample
of LNG delivered. Seller shall give advance notice to Buyers of
the time Seller intends to conduct a calibration thereof and Buyers
shall have the right to have a representative present at each such
calibration; provided, however, Seller will not be obligated to
defer or reschedule any calibration in order to permit the
representative of Buyers to be present.

The sample shall be analyzed, or be caused to be
analyzed, by Seller to determine the concentrations of Hydrogen
Sulfide (H2S) and total sulfur content referred to in Section 11.2
using the methods described in Schedule A attached hereto.

13.8 Operating Procedures
Prior to conducting operations for measurement,
gauging and analysis provided in Sections 13.5, 13.6 and 13.7, the
party responsible for such operations shall notify the appropriate
representatives of the other party, allowing such representatives
reasonable opportunity to be present for all operations and
computations; however, the absence of the other party's
representative after notification and opportunity to attend shall
not prevent any operations ;and computations from being performed.
At the request of either party any measurement, gauging and
analysis provided for in Sections 13.5, 13.6 and 13.7 shall be
witnessed and verified by an independent surveyor mutually agreed
upon by the Buyer and Seller. The results of such surveyor's
verifications shall be made available promptly to each party. All
records of measurement and the computation results shag be reserved
and available to both parties for a period of not less than three
(3) years after such measurement and computation.

13.9 BTU Quantities Sold

The quantity of BTU's sold shall be calculated by Seller

following the procedures described in this Section 13.9, and shall
be verified by an independent surveyor mutually agreed upon by
Seller and Buyers.

A. Determination of Gross Heating Value
The Gross Heating Value of the samples of the LNG
shall be determined by computation, in accordance with the method
described in Schedule A attached hereto, on the basis of the
molecular composition determined pursuant to Section 13.7 and of
the molecular weights and heating values described in G.P.A.
Publication 2145 published by G.P.A., current at the time of
computation.

If better constants or improved methods for
determination of heating value are subsequently adopted by G.P.A.
or other recognized competent impartial authority, they shall, upon
mutual agreement of Seller and Buyers, be substituted. therefor but
not retroactively. The Gross Heating Value of the representative
sample shall be the conclusive Gross Heating Value for the purpose
of determining quantities of BTU's sold.

B. Determination of Volume of LNG Loaded
The LNG volume in the tanks of the LNG Tanker before
- -and after loading shall be determined by gauging as provided in
Section 13.5 on the basis of the tank gauge tables provided for in
Section 13.4. The volume of LNG remaining in the tanks of the LNG
Tanker before loading shall then be subtracted from the volume
after -loading and the resulting volume shall be taken as the
volume of the LNG delivered to the LNG Tanker.
If failure of gauging and measuring devices of an
LNG Tanker should make it impossible to determine the LNG volume,
the volume of LNG delivered shall be determined by- gauging the
liquid level in Seller's onshore LNG storage tanks immediately
before and after loading the LNG Tanker, and such volume shag be
reduced by subtracting an estimated LNG volume, agreed upon by the
parties, for boil-off from such tanks during the loading of such
LNG Tanker. Seller shall provide Buyers, or cause the Buyers to be
provided with, a certified copy of tank gauge tables for each
onshore LNG tank which is to be used for this purpose, such tables
to be verified by a competent impartial authority.

C. Determination of BTU Quantities Sold
The quantities of BTU's sold shall be computed by
Seller by means of the following formula:
Q V x D x P
in which: Q = represents the quantity of the LNG sold in
BTU's.
V = represents the volume of the LNG loaded,
stated in cubic meters, determined as
provided in Section 13.9 B.
D = represents the density of the LNG loaded,
stated in kilograms per cubic meter,
determined as provided in Section 13.5 D.
P = represents the Gross Heating Value of the
LNG loaded, stated in BTU's per
kilograms.
Physical constants, calculation procedures and examples of BTU
determination are provided in Schedule A.

13.10 Verification of Accuracy and Correction for Error
Accuracy of devices used shall be tested and
verified at the request of either party, including the request by
a party to verify accuracy of its own devices. Each party shall
have the right to inspect at any time the measurement devices
installed by the other party, provided that the other party be
notified in advance. Testing shall be performed only when both
parties are represented, or have received adequate advance notice
thereof, using methods recommended by the manufacturer or any other
method agreed to by Seller and Buyers. At the request of any party
hereto, any test shall be witnessed and verified by an independent
surveyor mutually agreed upon by Buyers and Seller. Permissible
tolerances shall be defined in Schedule A Inaccuracy of a device
exceeding the permissible tolerances shall require correction of
previous recordings, and computations made on the basis of those
recordings, to zero error with respect to any period which is
definitely known or agreed upon by the parties, as well as
adjustment of the device. In the event that the period of error is
neither known nor agreed upon, corrections shall be made for each
delivery made during the last half of the period since the date of
the most- recent calibration of the inaccurate device. However,
the provisions of this Section 13.10 shall not be applied to
require the modification of any invoice that.has become final
pursuant to Section 10.6.

13.11 Disputes
In the event of any dispute concerning the subject
matter of this Article 13, including, but not limited to, disputes
over selection of the type or the accuracy of measuring devices,
their calibration, the result of measurement, sampling, analysis,
computation or method of calculation, such dispute shall be
submitted to a competent impartial authority mutually agreed upon
by the parties or, ff such authority cannot be agreed upon within
thirty (30) days of request by either party, such dispute shall be
decided by arbitration pursuant to Article 16. AU decisions of an
authority acting under this Section 13.11 shall be binding on the
parties. Expenses incurred in connection with the services of such
authority shall be shared equally by the parties.
13.12 Costs and Expenses of Test and Verification
All costs and expenses for testing and verifying Seller's
measurement
devices as provided for in this Article 13 shall be borne by Seller
and all costs and expenses for testing and verifying Buyers'
measurement devices shall be borne by Buyers. The fees and charges
of independent surveyors for measurements and calculations as
provided for in Sections 13.8 and 13.9 shall be borne equally by
Seller and Buyer. When the services of independent surveyors are
required and selected by mutual agreement pursuant to Section
13.10, then the fees and charges of such surveyors shall be borne
equally by Seller and Buyers.

ARTICLE 14 - DUTIES, TAXES AND CHARGES

Seller shall pay (or reimburse Buyers for any such
payments made by them) all taxes, royalties, duties or other
imposts levied or imposed by the Indonesian Government or any
subdivision thereof, or any other governmental authority in
Indonesia, on the sale or export of LNG.

ARTICLE 15 - FORCE MAJEURE

15.1 Events of Force Majeure
Neither Seller nor any Buyer shall be liable for any
delay or failure in performance hereunder if and to the extent such
delay or failure in performance directly results from any of the
following:

(a) Other than LNG Tankers
(i) Fire, flood, atmospheric disturbance,
lightning, storm, typhoon, tornado,
earthquake, landslide, soil erosion,
subsidence, washout or epidemic;

(ii) War, riot, civil war, blockade,
insurrection, act of public enemies or
civil disturbance;

(iii) Strike, lockout or other industrial
disturbance;

(iv) Serious accidental damage to or serious
failure of Seller's Facilities, unless
such damage or failure is the result of
willful negligence on the part of
Seller's management;

(v) Serious accidental damage to or serious
failure of a Buyer's Facilities, unless
such damage or failure is the result of
willful negligence on the part of such
Buyer's management;

(vi) The Proved Remaining Recoverable Reserves
of Natural Gas in the Gas Supply Area
expressed in the then most recent
Certificate referred to in Section 3.2
which can be economically produced have
been fully depleted; or
(vii) Act of government that directly affects
the lability of a party to perform any
obligation hereunder other than the
obligation to remit payments as provided
in Section 10.4 on account of LNG
delivered and taken or not taken but
required to be paid for under this
Contract.

(b) As to LNG Tankers

(i) The removal of an LNG Tanker from service
due to loss, serious accidental damage or
other serious failure, unless such loss,
damage or failure is the
C>
result of willful negligence on the part
of Buyers;

(ii) Fire, flood, atmospheric disturbance,
lightning, storm, typhoon, tornado or
epidemic;

(iii) War, riot, civil war, blockade,
insurrection, act of public enemies or
civil disturbance;

(iv) Strike, lockout or other industrial
disturbance occurring aboard an LNG
Tanker of at a port or other facility at
which such an LNG Tanker calls; or

(v) Act of government

15.2 Notice: Resumption of Normal Performance
(a) Immediately upon the occurrence of an event of
force majeure that gives a party warning that the event may delay
or prevent the performance by Seller or any Buyer of any of its
obligations hereunder, the party affected shall give notice thereof
to the other parties describing such event and stating the
obligations the performance of which are, or are expected to be,
delayed or prevented, and (either in the original or in
supplemental notices) stating:
(i) The estimated period during which performance
may be suspended or reduced, including, to the
extent known or ascertainable, the estimated
extent of such reduction in performance; and

(ii) The particulars of the program to be
implemented to ensure full resumption of
normal performance hereunder.

(b) In order to ensure resumption of normal performance
of this Contract within the shortest practicable time, the party
affected by an event of force majeure shall take all measures to
this end which are reasonable in the circumstance, taking into
account the consequences resulting from such event of force
majeure. Prior to resumption of normal performance the parties
shall continue to perform their obligations under this Contract to
the extent not prevented by such event.

15.3 Settlement of Industrial Disturbances
Settlement of strikes, lockouts or other industrial
disturbances shall be entirely within the discretion of
the party experiencing such situations and nothing herein
shall require such party to settle industrial disputes by
yielding to demands made on it when it considers such
action inadvisable.

ARTICLE 16 - ARBITRATION

All disputes arising between any Buyer or Buyers, on
the one hand, and Seller, on the other hand, relating to this
Contract or the interpretation or performance hereof, shall be
finally settled by arbitration conducted in accordance with the
Rules of Arbitration of the International Chamber of Commerce,
effective at the time, by three (3) arbitrators appointed in
accordance with such Rules. Arbitration shall be conducted in the
English language and shall be held at Paris, France, unless another
location is selected by mutual agreement of the parties concerned.
The award rendered by the arbitrators shall be final and binding
upon the parties concerned.

ARTICLE 17 - APPLICABLE LAW

This Contract shall be governed by and interpreted
in accordance with the laws of the State of New York, United States
of America.

ARTICLE 18 - BUYERS' COORDINATOR AND REPRESENTATIVE

Buyers will from time to time designate a Buyers'
Coordinator and a Buyers' Representative to act on behalf of each
Buyer in performing the following:
A. Coordination among each of the Buyers, and between
Seller and Buyer or Buyers, and the handling of
communications between Seller and Buyer or Buyers
in connection with performance of this Contract, in
particular the exercise of Allowances pursuant to
Section 73; and

B. Implementation of various operations of each Buyer
or of Buyers which are necessary in connection with
purchasing and receiving of LNG hereunder.

Buyers shall notify Seller the name and address of the
entities to act as Buyers' Coordinator and Buyers' Representative
and shall specify the duties to be performed by each such entity.
Buyers have notified Seller that Japan Indonesia LNG Co., Ltd. is
presently acting as Buyers' Coordinator, and that P.T. Jasa Enersi
Pratama Nusantara is presently acting as Buyers' Representative.

Seller shall be entitled to accept and rely upon any
communication received from Buyers' Coordinator or Buyers'
Representative as if received directly from one or more of the
Buyers, and to give communications to Buyers' Coordinator or
Buyers' Representative with the same effect as if given directly to
a Buyer or Buyers. No act of or authorization to Buyers'
Coordinator or Buyers' Representative shall relieve any Buyer from
performance of any obligation or payment of any liability of such
Buyer hereunder, each Buyer remaining primarily liable therefor at
all times.
ARTICLE 19 - CONFIDENTIALITY

Confidential information or documents in the possession
of the parties relating to the project or the performance of this
Contract may not be used or communicated to third parties without
the agreement of Seller, in the case of information and documents
furnished to Buyers, and of the Buyer or Buyers concerned, in the
case of information and documents furnished to Seller, except that
such information or documents can be used by or communicated to:

A. Any of Seller's Suppliers or any Affiliate (as
defined below) of
Seller's Suppliers or of a party, with the
obligation of the receiving persons to maintain
confidentiality;

B. Persons participating in the implementation of this
project, such as Buyers' Transporter, Buyers'
Coordinator, Buyers' Representative, legal counsel,
accountants, other professional, business or
technical consultants and advisers, underwriters or
lenders, with the obligation of the receiving
persons to maintain confidentiality; and

C. Governmental authorities of the Republic of
Indonesia, Japan or
the United States of America having authority to
require such disclosure, in accordance with that
authority.

As used before, the term "Affiliate" means a company that controls,
is controlled by, or is under common control with, the party or any
of Seller's Suppliers.
ARTICLE 20 - NOTICES

PERUSAHAAN PERTAMBANGAN MINYAK DAN GAS BUMI NEGARA
(PERTAMINA)
Attention: Head of Gas Marketing Bureau
P.O. Box 12/JKT
Jalan Merdeka Timur No. 1A
Jakarta Pusat, Indonesia

And at the following cable and telex addresses -

Cable: Telex:
PERTAMINA PERTAMINA
JAKARTA, INDONESIA VIA RCA 44302 or 44152
Attention: Head of Gas
Marketing JAKARTA,
Bureau INDONESIA
Facsimile: 355271

B. To Buyers at the following mail and telex addresses
--

CHUBU ELECTRIC POWER CO., INC.
(Mail address) Attention: Fuel Department
1, Toshin-cho, Higashi-ku,
Nagoya, 461 Japan

(Telex address) 4444405 CHUDEN J

THE KANSAI ELECTRIC POWER CO., INC.
(Mail address) Attention: Fuel Department
3-22, Nakanoshima 3-chome, Kita-k-u,
Osaka, 530 Japan

(Telex address) 5248320 KEPCO J

OSAKA GAS CO., LTD.
(Mail address) Attention: Gas Resources Department
4-1-2, Hiranomachi, Chuo-k-u,
Osaka, 541 Japan

(Telex address) 5225275 DAIGAS J

TOHO GAS CO., LTD.
(Mail address) Attention: Raw Materials Department
19-18, Sakurada-cho, Atsuta-k-U,
Nagoya, 456 Japan

(Telex address) 4477651 TOHOGS J

The parties may designate additional addresses for
particular communications as required from time to time, and may
chance any addresses, by notice given thirty (30) days in advance
of such additions or chances. Immediately upon receiving
communications by telex, facsimile, cable or radio, a party shall
acknowledge receipt by the same means, and may request a repeat
transmittal of entire communication or confirmation of particular
matters. If the sender receives no acknowledgement of receipt
within twenty-four (24) hours, or receives a request for repeat
transmittal or confirmation, said party shall repeat the
transmittal or answer the particular request.

ARTICLE 21 - ASSIGNMENT

Neither this Contract nor any rights or obligations
hereunder may be assigned by any Buyer without the prior written
consent of Seller, or by Seller without the prior written consent
of each Buyer. Any request by a Buyer for Seller's consent to an
assignment shall be accompanied by the written consent of each
other Buyer to the proposed assignment.

ARTICLE 22 - AMENDMENTS

This Contract may not be amended, modified, varied or
supplemented except by an instrument in writing signed by Seller
and Buyers.

Performance of any condition or obligation to be
performed hereunder shall not be deemed to have been waived or
postponed except by an instrument in writing signed by the party
who is claimed to have granted such waiver or postponement.

ARTICLE 23 - SEPARABILITY

This Contract shall be binding upon each Buyer in
accordance with its terms. The liabilities of Buyers under this
Contract are several and not joint, and each Buyer shall be liable
only for performance of the obligations of such Buyer as provided
in this Contract.

ARTICLE 24 - DETAILS OF PERFORMANCE

Details necessary for performance of this Contract shall
be mutually agreed upon by Seller and each Buyer separately or,
when necessary and desirable, by Seller and Buyers on a coordinated
and mutually agreeable basis.

ARTICLE 25 - SCOPE

This Contract constitutes the entire agreement between
the parties relating to the subject matter hereof and supersedes
and replaces any provisions on the same subject contained in any
other agreement between the parties, whether written or oral, prior
to the date of the original execution hereof.

Subsequent to the date of original execution of this
Contract, various agreements, manuals, procedures and details of
performance relating to the interpretation or implementation of the
Contract or covering matters related thereto, have been agreed
between Seller- and Buyers ("Ancillary Agreements"). It is agreed
that no Ancillary Agreement or portion thereof, to the extent it is
in effect and capable of performance, shall be annulled, terminated
or revoked by reason of the execution of this amended and restated
Contract, except that:
(i) to the extent that there is any conflict between
such Ancillary Agreements and any specific amendment to
the Contract incorporated in this amended and restated
Contract, such specific amendment shall Prevail; and

(ii) the following Ancillary Agreements (or identified
portions thereof) are superseded by this amended and
restated Contract and shall have no farther effect:

(A) Amended and Restated Invoice Settlement Agreement
for 1981 LNG Sales- Contract dated as of March 31,
1987 and amended and restated as of December 1,
1988 - paragraph 6;

(B) Memorandum of Agreement on Revisions to the 1981
LNG Sales Contract dated as of September 7, 1989.<PAGE>

ARTICLE 26 - COUNTERPARTS

This Contract is executed in five (5) identical
counterparts each of which shall have the force and dignity of an
original, and all of which shall constitute but one and the same
Contract.

IN WITNESS WHEREOF, each of the parties has caused this
amended and restated Contract to be executed by its duly authorized
officer as of January 1, 1990.

SELLER: BUYERS:

PERUSAHAAN PERTAMBANGAN CHUBU ELECTRIC POWER CO., INC.
MINYAK DAN GAS BUMI NEGARA
(PERTAMINA)

By /s/ By /s/

THE KANSAI ELECTRIC POWER
CO., INC.

By /s/

WITNESS:

JAPAN INDONESIA LNG CO., LTD. OSAKA GAS CO., LTD.

By /s/ By /s/

NISSHO IWAI CORPORATION TOHO GAS CO., LTD.

By /s/ By /s/

The 1981 LNG Sales Contract

SCHEDULE A
TESTING AND METHODS

PART I BTU QUANTITY DETERMINATION

A. PHYSICAL CONSTANTS

The following table of Physical Constants, developed from
G.P.A. Publication 2145-86, shall be used for all density and
heating value calculations associated with this Contract.
This table of Physical Constants shall be revised to conform
to any subsequent officially published revision of G.P.A.
Publication 2145. The values for the Gross Heating Values in
BTU/KG as shown below have been obtained by multiplying the
G.P.A. 2145--values for BTU/lbm fuel as ideal gas from G.P.A.
2145 by 2.20462.

Gross Heating Gross Heating
Molecular Value at 60oF Value at 60oF
Component Weight BTU/kg BTU/Ft3

Methane 16.043 52671 1010.0
Ethane 30.070 49236 1769.6
Propane 44.097 47737 2516.1
Isobutane 58.123 46809 3251.9
Normal Butane 58.123 46959 3262.3
Isopentane 72.150 46392 4000.9
Normal Pentane 72.150 46485 4008.9
Normal Hexane 86.177 46172 4755.9
Nitrogen 28.0134 0 0
Oxygen 31.9988 0 0
Carbon Dioxide 44.010 0 0

B. LNG DENSITY DETERMINATION

The density of the LNG shall be determined by use of the
following formula:.

D E (Xi x Mi)
(xi x Vi)- (Xm x C)

where:
D is the density to four significant figures of the LNG
loaded in kilograms per cubic meter at temperature TL.

TL is the temperature of the LNG in the tanks of the LNG
Tanker after loading in degrees Centigrade to the nearest
0.1"C. TL shall be determined by taking the arithmetic
average from all the tanks of all the temperatures
obtained from the temperature sensing points located in
the liquid just after completion of the loading
operation.

Xi is the molar fraction to the nearest fourth decimal
place of component (i) from the analysis obtained in
accordance with Section 13.7.

Mi is the molecular weight of component (i) as given in
Part I, Section A of this Schedule A.

Vi is the molar volume to the nearest fifth decimal place
of component (i) in cubic meters per kilogram-mol at
temperature TL and shall be obtained by linear
interpolation of the data in Table II of this Section B.

Xm is the molar fraction to the nearest fourth decimal
place of methane from the analysis obtained in accordance
with Section 13.7.

C is the volume correction to the nearest fifth decimal
place in, cubic meters per kilogram-mol at temperature TL
shall be obtained by linear interpolation of the data in
Table III of this Section B.

An example of LNG density calculation is shown in Table I of
this Section B.<PAGE>
<TABLE>
TABLE I

Example of LNG Density Calculation
<CAPTION>
Molar Volume
Mole Molecular Vi X 103
Fraction Weight (m3/kg-mole)
Xi Mi Xi x Mi (at-159.9"C) (XixVi)x103

<S> <C> <C> <C> <C> <C>
N2 0.0002 28.0134 0.006 46.89 0.009
CH4 0.8644 16.043 13.868 38.22 33.037
C2H6 0.0851 30.070 2.559 48.01 4.086
C3H8 0.0389 44.097 1.715 62.53 2.432
i-C4HIO 0.0061 58.12 0.355 77.12 0.470
n-C4HlO 0.0052 58.123 0.302 76.83 0.400
i-C5Hl2 0.0001 72.150 0.007 91.14 0.009

1.0000 18.812 40.443

Average Molecular Weight = 18.812

C = 0.67 x 10-3

D = 18.812 18.812.
40.443xlO-3-0.8644xO 67xlO- .40.443xlo-3-0.579xlO-3

0.471904 x 103 471.9 kg/m3
/TABLE
<PAGE>
<TABLE>
TABLE II
<CAPTION>

MOLAR VOLUMES OF INDIVIDUAL COMPONENTS
MOLAR VOLUMES (in m3/kg-mol at VARIOUS TEMPERATURES) x 103

-166oC -164oC -162oC -160oC -158oC -156oC

<S> <C> <C> <C> <C> <C> <C>
Methane 37,44 37.69 37.95 38.21 38.48 38.76
Ethane 47.52 47.68 47.84 48.00 48.16 48.33
Propane 61.99 62.16 62.34 62.52 62.70 62.89
n-Butane 76.26 76.44 76.63 76.82 77.01 77.20
isoButane 76.49 76.69 76.90 77.11 77.33 77.54
n-Pentane 89.85 90.06 90.26 90.47 90.67 90.88
isoPentane 90.49 90.70 90.92 91.13 91.35 91.56
n-Hexane 104.23 104.45 104.67 104.89 105.11 105.34
Nitrogen 43.58 44.55 45.64 46.83 48.11 49.47
Oxygen 30.44 30.78 31.14 31.51 31.90 32.3O
Carbon Dioxide 29.54 29.64 29.73 29.83 29.93 30.03

/TABLE
<PAGE>
<TABLE>
TABLE III

CORRECTION C for VOLUME REDUCTION of MIXTURE
<CAPTION>
Molecular Weight
of Mixture C x 103 at Various Temperatures (C in M3/kg-mol)
E(Xi x Mi) -166*C -164*C -162"C -160"C -15@"C -156,C

<S> <C> <C> <C> <C> <C> <C>
17.00 0.22 0.23 0.24 0.24 0.25 0.26
17.50 0.33 0.35 0.36 0.37 0.38 0.39
18.00 0.44 0.46 0.47 0.49 0.50 0.52
18.50 0.55 0.56 0.58 0.60 0.62 0.64
19.00 0.65 0.67 0.69 0.71 0.73 0.75
19.50 0.75 0.77 0.79 0.81 0.84 0.86
20.00 0.84 0.86 0.89 0.91 0.94 0.97

</TABLE>
<PAGE>
Reference: Density calculations and method from Proceedings of
the First International Conference on LNG, April 1968, Paper
No. 22, Densities of Liquefied Natural Gas and of Low
Molecular Weight Hydrocarbons, J. Klosek and C. McKinley.

C. GROSS HEATING VALUE

Gross Heating Value (mass basis) of the LNG shall be
calculated by the following equation:

P = E (Hi x Xi x Mi)
E(Xi x Mi)

where:
P is the Gross Heating Value of the LNG loaded, stated in
British Thermal Units per kilogram (any fractional number
shall be rounded to the nearest BTU).

Hi is the Gross Heating Value of component (i) expressed as
BTU per kilogram as given in Part I, Section A of this
Schedule A.

Xi is the molar fraction to the nearest fourth decimal place
of component (i) from the analysis obtained in accordance with
Section 13.7.

Mi is the molecular weight of component (i) as given in Part
I, Section A of this Schedule A.

An example of Gross Heating Value Calculation is shown in Table IV
of this Section C.<PAGE>
<TABLE>
TABLE IV

Example of Gross Heating Value Calculation
<CAPTION>

Mole Heating Molecular Hi x Xi X Mi
Fraction Value Weight E(Xi x Mi)
Xi Hi (Btu/kg) Mi Xi x Mi in BTU/Kg

<S> <C> <C> <C> <C> <C>
N2 0.0002 - 28.0134 0.006 -
C1 0.8644 52671 16.043 13.868 38828
C2 0.0851 49236 30.070 2.559 6698
C3 0.0389 47737 44.097 1.715 4352
i-C4 0.0061 46809 58.123 0.355 883
n-C4 0.0052 46959 58.123 0.302 754
i-C5 0.0001 46392 72.150 0.007 17
______ ______ _____
1.0000 18.812 51532

<PAGE>
D. DETERMINATION OF TOTAL BTU DELIVERED

The total number of British Thermal Units delivered shall be
calculated by the use of the following formula:

Q = V x D x P

where:
Q is the quantity of the LNG delivered in British Thermal
Units (any number shall be rounded to the nearest 10
million).

V is the volume of the LNG loaded, stated in cubic
meters, determined as provided in Section 13.9 B (any
number shall be rounded to the nearest cubic meter).

D is the density of the LNG loaded, stated in kilograms
per cubic meter as determined in Section B, Part I of
this Schedule A.

P is the Gross Heating Value of the LNG loaded, stated in
British Thermal Units per kilogram as determined in
Section C, Part I of this Schedule A.

Example calculation of Total BTU delivered:

For purposes of the example calculation assume

V = 120,281 cubic meters of LNG

From Section B, Part I

D = 471.9 Kg/m3

From Section C, Part I

P = 51532 BTU/Kg

And Total BTU delivered:

Q = V X D X P
Q = 120,281 X 471.9 X 51532
= 2,924,990 X 10 6 BTU

<PAGE>
PART II - QUALITY DETERMINATIONS

A. For quality determination of Gross Heating Value as pro-
vided for in Article 11, the following calculation method
shall be used (Part I, Section A of this Schedule A shall
be used as the data source).

Gross Heating
Mole Fraction Value
Component Xi vi (BTU/Ft3) Xi x Hvi

N2 0.0002 0.0 0.0
C1 0.8644 1010.0 873.0
C2 0.0851 1769.6 150.6
C3 0.0389 2516. 197.9
i-C4 0.0061 3251.9 19.8
n-C4 0.0052 3262.3 17.0
i-C5 0.0001 4000.9 0.4
______ ______
1.0000 1158.7

B. For quality determination of molecular percentages of
pentanes and heavier, butanes and heavier, methane, and
nitrogen the chromatograph analysis provided for in
Section 13.7 shall be used.

C. Hydrogen Sulfide Test Method - The ASTM D 2725-70,
Standard Method of Test for Hydrogen Sulfide in Natural
Gas (Methylene Blue Method), shall be used to determine
the hydrogen sulfide content of the LNG for purposes of
this Contract, unless Seller and Buyers mutually agree
that some other method should be used.

D. Total Sulfur Test Method - The ASTM D 2784-70, Standard
Method of Test for Sulfur in Liquefied Petroleum Gases
(Oxy-hydrogen Burner or Lamp) shall be used to determine
the total sulfur content of the LNG for purposes of this
Contract, unless Seller and Buyers mutually agree that
some other method should be used.

<PAGE>
PART III - MAXIMUM PERMISSIBLE TOLERANCES

Temperature + 0.2oC at - 160oC
Pressure + 1% of Span
Level + 10 mm at upper and lower 5 meters of the
tanks in the LNG Tanker.
Composition As provided in G.P.A. Standard 2261,
Method of Analysis for Natural Gas and
Similar Gaseous Mixtures by Gas
Chromatography.

EXHIBIT A
Principles for determining liability of the parties under COU
with regard to LNG tankers at Bontang

1. "Company" shall be defined to include the Terminal
Operator, Pertamina, the production-sharing contractors,
independent contractors on the land site and any other
person or company associated in the production, storage
and loading of LNG on the Company's behalf, including
their respective agents, affiliates and subsidiaries.

"Owner" shall be defined to include each person or
company participating in the ownership and/or operation
of the ship, but excluding those persons or companies
included within the definition of "Company".

2. The Company and the Owner each accepts full
responsibility for and indemnifies the other against
personal injury and death claims of its own employees and
their families, and such claims are excluded from the
COU.

3. In the event that damage (including the costs of cleaning
up oil spilt from the ship) is caused to the property of
the Company by the Owner's ship, the liability of the
Company and the Owner shall be in proportion to the
degree of their respective fault; provided that if,
having regard to the circumstances, it is not possible to
establish the degree of respective faults or if neither
party appears to be at fault, the liability shall be
apportioned equally.
4. There shall be no liability of the Owner (except as
provided in Pars. 2 and 6) in the event that the
incident:

1. resulted from an act of war, hostilities, civil war
or insurrection or Act of God including, but not
limited to, earthquake, volcanic eruption, tidal
wave, lightning, or typhoon, provided the Owner
acted reasonably in the circumstances to protect
the property of the Owner and the Company from loss
or damage.

2. was wholly caused by an act or omission with intent
to cause loss or damage by a third party. It is
agreed that a member of the crew of the Owner's
ship is not a third party.

3. was wholly caused by the negligence or wrongful act
of the government or other authority responsible
therefor to maintain lights or other navigational
aids.

5. The Owner accepts responsibility for the acts of tugs and
pilots and if separate towage or pilotage contracts are
used in the port, then as to any inconsistency between
those contracts and the terms of this document, this
document shall be controlling.

6. If the ship sinks, grounds or otherwise becomes an
obstruction or danger in the opinion of the Company, the
Owner shall be responsible at its sole expense to take
reasonable steps to remove such obstruction or danger,
and the Company shall make best endeavors to assist the
Owner to fulfill this responsibility.

If the Owner fails to effect such removal within a reasonable
time, then the Company may effect such removal at Owner's
expense. The actual cost of such removal (and damage to
property of the Company in the course of removal by the Owner)
shall be excluded from the liability limit. Consequential
damages for failure of the Owner to take reasonable steps to
effect such removal within a reasonable time shall be
recoverable in accordance with applicable legal principles and
shall be included within the liability limit set forth in Par.
9.

In the event that the casualty giving rise to the obstruction
or danger was caused in whole or in part by the fault of the
Owner, then consequential damages shall be recoverable in
accordance with applicable tort principles of English law
subject to the thirty (30) days franchise of Par. 8 and shall
be included within the liability limit set forth in Par. 9.

The foregoing shall not apply in the case where the
obstruction or danger (a) resulted from an act of war,
hostilities, civil war or insurrection or (b) was wholly
caused by an act or omission done with intent to cause damage
by a third party. It is agreed that a member of the crew of
the Owner's ship is not a third party. However, in the case
of (b), above, the Owner shall b.e responsible at its sole
expense for taking reasonable steps to remove the obstruction
or danger.

7. All claims of third parties against the Company and/or
the Owner are excluded from the COU.

8. Subject to Par. 6, to the extent that consequential
damages of the Company are recoverable under this
document they shall be determined in accordance with
applicable legal principles, provided that no
consequential damages shall be recoverable by the Company
under the COU in respect of any incident unless the
operations of the Company shall have been materially
disrupted for a period in excess of thirty (30) days.

9. As to matters contained in this document the rights and
obligations of the parties shall be determined in
accordance with these principles and, as to such matters,

(a) The Company waives its rights against the Owner
under general law other than those contemplated
herein, and

(b) The Owner waives its rights to limit its
liabilities under general law, statute or
international convention.

Except as otherwise provided in Pars. 2 and 6, the total.
aggregate liability of the Owner to the Company in
respect of any one incident shall not exceed
U.S.$150,000,000.

10. The liability and the limit set forth above shall
continue in effect for as long as the Owner can obtain
customary P and I Club cover for the risk.

11. The COU shall be governed by English law and subject to
enforcement in the High Court of Justice in London.

12. Except as provided in Par. 2, the Owner waives all claims
against -the Company arising from damage to the ship or
its cargo in connection with the use of loading port
facilities.

13. The Company win not be responsible for loss, damage or
delay arising from labor disputes.

14. The master will have the sole responsibility on behalf of
the Owner for the safety and proper navigation of the
ship and shall place, transport and remove the ship at or
from the berth as reasonably directed by the Company.

15. Subject to Par. 10, the Owner will keep the ship fully
entered in a P and I Club and will produce annually to
the Company a copy of the certificate of entry endorsed
to the effect that the P and I Club has agreed to cover
P and I risks under this document in accordance with its
rules and will give the Company prior notice of
cancellation of such cover at the same time and in the
same manner as customarily provided to mortgagees of
entered ships.

16. As to any inconsistency between the COU form in use in
the port and this document, this document shall be
controlling.
<PAGE>
SIDE LETTER TO 1973 LNG SALES CONTRACT
AND BADAK LNG SALES CONTRACT

January 1, 1990

CHUBU ELECTRIC POWER CO., INC.
THE KANSAI ELECTRIC POWER CO., INC.
KYUSHU ELECTRIC POWER CO., INC.
NIPPON STEEL CORPORATION
OSAKA GAS CO., LTD.
TOHO GAS CO., LTD.

Gentlemen:

Reference is made to our discussions on the amendment and
restatement of the 1973 LNG Sales Contract and the Badak LNG Sales
Contract as of even date herewith, under which certain Fixed
Quantities of LNG are sold.

Pertamina confirms that it places great importance on the mutual
trust and cooperation that exists with Buyers, and that no changes
effected by the said amendment and restatement are intended to
adversely effect the relationship between the parties. Pertamina
also fully appreciates the marketing opportunities for the excess
capacity of its LNG facilities provided by Buyers and will continue
to pursue such opportunities in the future.

It is Pertamina's policy to retain the right to dispose of the
excess capacity of its LNG facilities to such purchasers and upon
such terms as it may elect. Pertamina is therefore unable to grant
any general reservations of its excess capacity.

However, in view of the long term business relationship between
Pertamina and Buyers, Pertamina agrees that once a Buyer offers in
writing to purchase a specified quantity of LNG on terms to be
agreed, then and to the extent Pertamina determines that it has
excess LNG production capacity and (if applicable) shipping
capacity available, then Pertamina will give preferential
consideration to such offer over future offers from other potential
purchasers for a reasonable period while good faith negotiations
are being conducted with such Buyer.

Very truly yours,

PERUSAHAAN PERTAMBANGAN MINYAK DAN GAS BUMI NEGARA
(PERTAMINA)

By /s/

ACKNOWLEDGED AND ACCEPTED
this 1st day of January, 1990

CHUBU ELECTRIC POWER OSAKA GAS CO., LTD.
CO., INC.

By /s/ By /s/

THE KANSAI ELECTRIC POWER TOHO GAS CO.,
CO., INC.

By /s/ By
/s/

KYUSHU ELECTRIC POWER CO., INC.

By /s/

NIPPON STEEL CORPORATION

By /s/

<PAGE>
AMENDED AND RESTATED SIDE LETTER TO
BADAK LNG SALES CONTRACT

January 1, 1990

CHUBU ELECTRIC POWER CO., INC.
THE KANSAI ELECTRIC POWER CO., INC.
OSAKA GAS CO., LTD.
TOHO GAS CO., LTD.

Gentlemen:

This letter relates to the amended and restated Badak LNG
Sales Contract (the "Contract") dated today between each of you as
Buyers and Pertamina as Seller (terms defined in the Contract shall
have the same meaning when used herein). With respect to the
Contract, Seller and Buyers agree that the following shall apply:

I. Assistance to Buyers
We have agreed that Seller and Buyers will work
together and cooperate to establish mechanisms and procedures which
permit and contribute to the smooth performance by Buyers of
Buyers' obligation to provide transportation for LNG to be sold and
purchased under the Contract. To this end Seller will use its best
efforts to assist Buyers, Buyers' Transporter, or Buyers'
Representative in respect of Buyers' accomplishment of the
following:

A. Obtaining Indonesian Government permits, licenses
and clearances.

B. Identifying Indonesian taxes payable by Buyers or
Buyers' Transporter.

C. Obtaining supply of necessary utilities and
services to LNG Tankers at the Loading Port
including access to an LNG Tanker from onshore and
establishing arrangements for emergency assistance
to LNG Tankers by the Loading Port operator.

D. Consultation as to operating procedures designed to
expedite the turnaround of LNG Tankers at the
Loading Port, including the facilitation of the
timely performance of the duties of Ship's Agent.

E. Formalities necessary to import ship stores and
spare parts and to permit the entry into and
departure from Indonesia of the LNG Tanker crew and
operating personnel on a basis similar to Seller's
providing such assistance to Seller's Transporter
under its arrangements for transportation of LNG
sold and purchased under the 1973 LNG Sales
Contract.

F. Obtaining pilots and tug boats and any other
necessary attending vessels, equipment and services
for the LNG Tankers in the Loading Port.

Should Buyers inform Seller that in their view the level
of port charges imposes an unreasonable commercial burden, Seller
will cooperate with Buyers in examining the problem and in
presenting the problem to the appropriate port authorities.

Seller will continue its efforts to maintain the approval
of marine authorities in Indonesia to 24-hour operation of the
Loading Port.

Further, Seller and Buyers (and Buyers' Transporter) will
work together and exchange relevant data and information relating
to the respective insurance programs of each to cover ship/shore
risks with the objective of coordinating their respective insurance
programs covering shipside and shoreside risks.

In addition to those matters specifically noted herein
Seller contemplates providing shoreside assistance to Buyers'
Transporter similar and to substantially the same extent that
Seller provides such assistance to Seller's Transporter under its
arrangements for transportation of LNG sold and purchased under the
1973 LNG Sales Contract.

II. Conditions of Use

Conditions of Use ("COU") will be signed by the
Master of each LNG Tanker before using the Loading Port facilities.
However, in view of the general COU terms, it is necessary to agree
to the principles for determining liability under COU with regard
to LNG Tankers at Bontang for which adequate insurance is available
to protect the interests of all parties, taking into account
current availability of P. and I. cover. A copy of these
principles is attached hereto as Exhibit A. Such principals formed
the basis for certain Omnibus and Waiver Agreements covering the
three LNG Tankers of Buyers' Transporter.

In the future the COU may be amended from time to
time by Seller, but Seller shall give Buyers prior notice of each
revision in order to enable Buyers and Buyers' Transporter to
detemiine promptly whether such revision will be covered by the
Buyers' Transporter's insurers. As to revisions that do not
increase Buyers' Transporter's liabilities under the principles,
such revisions shall become applicable to Buyers' Transporter upon
the advice of Buyers' Transporter's insurers that the revisions are
approved by insurers or that such approval is not required in order
to maintain Buyers' Transporter's insurance. As to revisions that
increase Buyers' Transporter's liabilities under the principles,
such revisions shall become applicable to Buyers' Transporter when
Buyers' Transporter consents thereto.

If Buyers utilize LNG Tankers other than the three
LNG Tankers of Buyers' Transporter then Seller and Buyers shall
cooperate to make the foregoing COU liability system applicable to
such other LNG Tankers.

In addition to the foregoing, in the event that
during the term of the Contract changed circumstances of a
substantial nature make it appropriate to reconsider the scope of
the liabilities and adequacy of insurance cover as set forth in the
attached principles, then Seller and Buyers shall engage in a
process of mutual review and consultation in order to determine how
to cope with the changed circumstances.

III. Transportation Force Majeure
The Contract provides that certain events of force
majeure affecting LNG Tankers can excuse Buyers from performance of
their obligations under the Contract, including their obligations
to pay for Fixed Quantities of LNG available but not taken.

In the case of a transportation force majeure which
affects only a small portion of the Fixed Quantities or which
reduces or limits Buyers' ability to perform their obligations
under the Contract for only a short period of time the reduction or
loss of revenues to Seller may be manageable, since during periods
of force majeure Seller can sell the quantities of LNG which Buyers
are unable to purchase to third parties.

However, an extended period of transportation force
majeure which prevents Buyers from performance of their obligations
would present very serious problems to both Seller and Buyers.

The Contract provides that in the case of a force
majeure, Buyers shall take all reasonable measures to resume normal
performance within the shortest practicable time. But if in spite
of all that Buyers can do, Buyers are unable either to resume
normal performance within a reasonable period of time or adopt a
plan which, taking into account the then existing circumstances,
will provide reasonable assurance to Seller that normal performance
will be resumed within a period that will hold the Force Majeure
Deficiency caused by the transportation force majeure to a level
which can be restored within a reasonable period of time and
thereby minimize Seller's financial loss and relieve the pressure
on Buyers to increase the quantities to be taken during later Fixed
Quantity Period, then Seller and Buyers will consult together and
in good faith try to reach agreement as to what to do.

Among the circumstances to be considered by the
parties are the point in time during the term of the Contract at
which the force majeure occurs, the amount of the Force Majeure
Deficiency caused thereby, the ability of the Buyers to accept the
Restoration Quantities and of Seller to provide such Restoration
Quantities and the length of the period of time before restoration
can be accomplished, the financial consequences to Seller and
Buyers, and alternatives available to Seller to sell to third
parties the LNG for which transportation is not available.

We are of the opinion that a period of nine months
from the date on which the relevant event of force majeure
occurred, or, if loner, the period ending with the end of the Fixed
Quantity Period during which the event of force majeure occurred
provides a reasonable time for Buyers either to resume normal
performance or adopt a plan which meets the above standards and
provides reasonable assurance to Seller that performance will be
resumed within the shortest practicable time.

If Buyers are unable to adopt such a plan to resume
normal performance within such period, then (i) any plan thereafter
adopted by Buyers shall be with Seller's consent, which consent
shall not unreasonably be withheld, and (ii) then, or at any later
time before such a plan has been adopted, Buyers, at the request of
Seller in connection with the commitment by Seller to sell to third
parties all or a portion of the quantities for which transportation
has not been made available, shall agree to the reduction of the
Fixed Quantities to the extent and for the term of such commitment
which Seller proposes to make, provided that, if after expiration
of the aforesaid period, such a plan to resume normal performance
is adopted by Buyers, Buyers shall no longer be obligated to agree
to a reduction in Fixed Quantities.

IV. Transportation Coordination
In connection with the Contract, Seller and Buyers
hereby confirm that they share the view that it is beneficial to:

1. Coordinate among Seller, Buyers and Buyers'
Transporter for the smooth, efficient and safe operations of the
Badak LNG trade; and

2. Coordinate efficient utilization of both fleets
in a manner that utilizes the spare capacity of the vessels as
back-up for both the 1973 LNG Sales Contract and the Contract so
that if Seller requires transportation additional to that available
to Seller from Seller's Transporter in order to transport cargoes
sold under the 1973 LNG Sales Contract or if Buyers require
transportation additional to that available to Buyers from Buyers'
Transporter in order to transport cargoes sold pursuant to the
Contract and, if the other party has transportation available for
such purpose at the time and for the period needed, such other
party shall do so upon mutually agreeable terms and conditions.

V. Section 4.14(b)(i)
Notwithstanding the provisions of Section 4.14(b)(i)
of the
Contract, Seller agrees not to include in claims of Seller for
damage caused to the Badak Facility by an LNG vessel other than an
LNG Tanker any amounts paid or payable by Seller to Seller's
Transporter on account of non-utilization of such LNG vessel or
other LNG vessels of Seller's Transporter.

This amended and restated Side Letter is intended to
replace in its entirety the original side letter to the Badak LNG
Sales Contract dated as of April 14, 1981.

Very truly yours,
PERUSAHAAN PERTAMBANGAN MINYAK DAN GAS
BUMI NEGARA (PERTAMINA)

By /s/

AGREED AND CONSENTED TO
This 1st day of January, 1990

CHUBU ELECTRIC POWER CO., INC.

By /s/

THE KANSAI ELECTRIC POWER CO., INC.

By /s/

OSAKA GAS CO., LTD.

By /s/

TOHO GAS CO., LTD.

By /s/

</TABLE>

PERTAMINA LETTERHEAD

December 1, 1989

OUR REF. : 4768/I0000/89-53 CHINESE PETROLEUM
CORPORATION
83 CHUNG HWA ROAD
TAIPEI, REPUBLIC OF
CHINA
ENCLOSURES :

SUBJECT : LNG PROJECT - COMMERCIAL SETTLEMENT OF START-UP
DELAY

Gentlemen,

This letter is in reference to our Badak III LNG Sales Contract
("the Contract") dated March 19, 1987. Under the terms of the
Contract, the delivery of LNG is to commence in January 1990;
however, it is anticipated that the construction and start-up of
the receiving facilities will not be completed in January 1990 due
to reasons which CPC believes may constitute Force Majeure.

The parties acknowledge that Pertamina will incur a financial
hardship as a result of the delay in completion of the receiving
facilities and in order to minimize Pertamina's financial hardship
without resolving CPC's claim of Force Majeure, the parties desire
to implement this commercial settlement.

Accordingly, and in view of the parties' mutual desire to foster a
good long term relationship and Pertamina's expectation that CPC
will be able to purchase the spare capacity of Train E on a long
term basis, it is mutually agreed that a commercial settlement of
the consequences of the delay be made upon the terms of this
letter.

CPC expects to take 16 cargoes (1 cargo equivalent to 3,053 billion
BTUs) in the 1990 Annual Program and the parties agree as follows:

1. CPC intends to exercise its full Build-up Allowances under the
Contract for 1990, resulting in a Fixed Quantity of 19 cargoes
for 1990.

2. If CPC takes less than the Fixed Quantity of 19 cargoes then
the shortfall will be made up at the rate of 2 cargoes each
year starting in 1992 for each cargo less than the Fixed
Quantity of 19 cargoes. CPC will endeavor to take not less
than 12 cargoes in 1990 of which the first shall be a part
cargo in accordance with paragraph 5 (b) of this letter.

3. Pertamina will not issue a take-or-pay invoice if CPC takes 12
or more cargoes in 1990.

Our Ref: 4768/I0000/89-53

Date : DECEMBER 1, 1989

- 2 -

4. In the unforeseen circumstances that CPC cannot take 12
cargoes in 1990, the parties will meet to discuss what remedy
is appropriate in the light of Pertamina's financial exposure
in such a case. CPC agrees in principle further to increase
the quantities to be taken and/or to extend the Contract, but
the extent of such increase/extension will be determined in
such discussions.

5. To assist CPC's start-up operations, Pertamina agrees in
respect of the first (cool-down) cargo delivered to CPC:

(a) to waive all claims for demurrage up to a period of 10
consecutive days, and

(b) to load and deliver less than a full cargo (but not less
than 90,000 cubic meter) of LNG as CPC may request; but
CPC shall pay for transportation as though a full cargo
had been loaded.

The Contract shall continue in force except to the extent its
application is modified by this letter.

The terms of this letter are subject to approval by the Board of
Directors of CPC and the Government of Indonesia.

Very truly yours,

Perusahaan Pertambangan
Minyak dan Gas Bumi Negara
(PERTAMINA)

By: /S/

Agreed and Accepted
the 1st day of December, 1989

CHINESE PETROLEUM CORPORATION

By: /S/

AGREEMENT AND PLAN OF

REORGANIZATION

ENSTAR CORPORATION

DATED DECEMBER 22, 1989

AGREEMENT AND PLAN OF REORGANIZATION
OF ENSTAR CORPORATION

TABLE OF CONTENTS

Page

No.

---
ARTICLE 1 CONVEYANCE, DISTRIBUTION AND
REORGANIZATION 1

Section 1.1. Transferred Assets 1

Section 1.2. Excluded Assets 2

Section 1.3. Conveyance 2

Section 1.4. Distribution 2

Section 1.5. Closing Statement 2

ARTICLE 2 CLOSING AND CERTAIN ACTIONS OF
THE PARTIES PRIOR TO CLOSING 3

Section 2.1. Time and Place of Closing 3
Section 2.2. Related Agreements 4
Section 2.3. Public Announcements 6
Section 2.4. Confidential Information 6
Section 2.5. Best Efforts to Meet Conditions 6
Section 2.6. Insurance Coverage of Subsidiaries 6
Section 2.7. Access to Records and Properties 6
Section 2.8. Copies of Information 7
Section 2.9. Government Reviews 7
Section 2.10. Conduct of Business 7
Section 2.11. Letters in Lieu, Federal and State
Assignments and Notices to Operators 8
Section 2.12. IPU Indenture 8
Section 2.13. Inconsistent Activities 8
Section 2.14. Area of Mutual Interest Agreements 8
Section 2.15. Capital Contributions 9

ARTICLE 3 REPRESENTATIONS AND WARRANTIES 9

Section 3.1. Representations and Warranties of
UTPC 9
Section 3.2. Representations and Warranties of
Ultramar 10
Section 3.3. Representations and Warranties of
Unimar 12

ARTICLE 4 ADDITIONAL AGREEMENTS AND COVENANTS 14

Section 4.1. IRS Covenant 14

ARTICLE 5 CONDITIONS TO CLOSING 14

Section 5.1. Conditions to Obligation of the
Parties hereto to Close 14

-i-

ARTICLE 6 SURVIVAL OF REPRESENTATIONS
AND WARRANTIES 15

ARTICLE 7 TERMINATION AND AMENDMENT 15

Section 7.1. Termination 15
Section 7.2. Amendment 16

ARTICLE 8 EXPENSES 16

ARTICLE 9 MISCELLANEOUS 16

Section 9.1. Counterparts 16
Section 9.2. Notice 17
Section 9.3. Further Assurances 17
Section 9.4. Schedules and Exhibits 17
Section 9.5. Defined Terms 17
Section 9.6. Assignment 17
Section 9.7. Closing Period Adjustments 17
Section 9.8. Payments and Invoices Received
After the Closing 20
Section 9.9. Surety Bond Coverage 20
Section 9.10. Confidentiality 20
Section 9.11. Severance 21
Section 9.12. Captions 21
Section 9.13. Governing Law 21
Section 9.14. Waivers 21
Section 9.15. Acknowledgment 21
Section 9.16. Files and Records 21
Section 9.17. Equitable Remedy 22
Section 9.18. Severability 22
Section 9.19. Entire Agreement 22
Section 9.20. Conflict 22

EXHIBITS

Exhibit A Assets Conveyed to UT Development
Exhibit B Assets Conveyed to Newco
Exhibit C Form of Conveyance
Exhibit D Intentionally omitted
Exhibit E Transition Space and Services Agreement
Exhibit F Enstar Discharge Agreement
Exhibit G Assumption and Indemnification Agreement
Exhibit H Marketing Agreement
Exhibit I IRS Request
Exhibit J Partnership Amendment
Exhibit K Termination Agreement
Exhibit L Amended 1985 Agreement
Exhibit M Amended 1987 Agreement
Exhibit N Assignments
Exhibit O Seismic Agreement

SCHEDULES

Schedule 1.5 Estimated Closing Schedule
Schedule 3.3(f) Litigation and Claims
Schedule 3.3(g) Makeup
Schedule 3.3(h) Gas and Oil Balancing
Schedule 9.7 Closing Period Adjustments Schedule

-iii-

AGREEMENT AND PLAN OF REORGANIZATION
OF
ENSTAR CORPORATION

This Agreement and Plan of Reorganization of Enstar
Corporation (the "Agreement") is made and entered into as of
December 22, 1989 by and among Unimar Company, a Texas general
partnership ("Unimar"), Ultrastar, Inc., a Delaware corporation
("Ultrastar"), Unistar, Inc., a Delaware corporation ("Unistar"),
Enstar Corporation, a Delaware corporation ("Enstar"), Newstar
Inc., a Delaware corporation ("Newstar"), Union Texas Development
Corporation, a Delaware corporation ("UT Development"), Union
Texas Petroleum Corporation, a Delaware corporation ("UTPC"), and
Ultramar America Limited, a Delaware corporation ("Ultramar").

WITNESSETH:

WHEREAS, Unistar and Ultrastar (collectively the "General
Partners") formed Unimar pursuant to the Texas Uniform
Partnership Act (the "Texas Act") for the purpose of acquiring,
owning and operating Enstar (the assets, property and rights of
Enstar and its affiliates being hereinafter referred to
collectively as the "Assets");

WHEREAS, the General Partners desire to effect an equitable
distribution of substantially all of the United States Assets of
Enstar to the General Partners for purposes of a reorganization
(the "Reorganization") of Enstar;

WHEREAS, in connection with the Reorganization the General
Partners desire to cause Enstar to convey such Assets to Newstar
and UT Development, newly formed subsidiaries of Enstar
(collectively the "Subsidiaries");

WHEREAS, UTPC, Ultramar, Unimar, the General Partners,
Enstar and the Subsidiaries desire to make certain
representations, warranties and agreements in connection with the
Reorganization;

NOW THEREFORE, in consideration of the premises and the
representations, warranties and agreements herein contained, the
parties hereto agree as follows:

ARTICLE 1

CONVEYANCE, DISTRIBUTION AND REORGANIZATION

Section 1.1. Transferred Assets. At the Closing (as
defined in Section 2.1), the following transfers shall occur:

(a) Enstar shall convey to UT Development all right,
title and interest of Enstar in and to the oil, gas and mineral
properties, shares of certain saltwater disposal entities and the
other assets identified on Exhibit A (collectively the "UT
Assets");

(b) Enstar shall transfer to Newstar all right, title and
interest of Enstar in and to the partnership interests, certain
receivables and the oil, gas and mineral properties and the other
assets identified on Exhibit B (collectively the "Newstar
Assets").

Section 1.2. Excluded Assets. The Assets to be transferred
to Newstar and UT Development are limited to such Assets
described in Exhibit A or B and Enstar shall retain all of its
right, title and interest in and to and liabilities associated
with all of its other Assets.

Section 1.3. Conveyance. The conveyance of the Assets
described in Section 1.1 to the Subsidiaries (the "Transferred
Assets") shall be accomplished by Enstar at the Closing by the
execution and delivery of (a) conveyances substantially in the
form of Exhibit C (the "Conveyances"), (b) the transfer of the
limited partnership and general partnership interests
(collectively the "Partnership Interests") in accordance with
each Agreement of Limited Partnership (collectively the
"Partnership Agreements") of each of the partnerships (the
"Partnerships") referred to in Section 1.1(b) by the execution
and delivery of assignments substantially in the form of Exhibit
N and (c) stock certificates representing all of the shares for
the salt water disposal entities owned by Enstar referred to in
Section 1.1(a) duly endorsed in blank or accompanied by stock
powers duly executed in blank.

Section 1.4. Distribution. At the Closing after
conveyance of the Transferred Assets, (a) Enstar shall distribute
all issued and outstanding shares of capital stock of each of the
Subsidiaries (collectively the "Subsidiaries' Stock") to Unimar,
(b) Unimar shall distribute all the issued and outstanding shares
of capital stock of UT Development to Unistar, and (c) Unimar
shall distribute all the issued and outstanding shares of capital
stock of Newstar to Ultrastar.

Section 1.5. Closing Statement.

(a) UTPC as contract manager pursuant to the Management
Agreement (as defined in Section 2.2) shall deliver on the
Closing Date a statement described in this Section 1.5 (the
"Closing Statement") for each of Newstar and UT Development. The
Closing Statement is also hereinafter referred to as the "Newstar
Closing Statement" and the "UT Closing Statement." The Closing
Statement shall be prepared in accordance with generally accepted
accounting principles except as otherwise reflected in the
Closing Statement for the time period beginning on the Valuation
Date (as defined in Section 2.1(b)) and ending on the last day
of the month prior to the Closing Date for which actual
accounting information is available (the "Initial Closing
Period") as if the Initial Closing Period were a separate and
distinct accounting period. The Closing Statement shall contain
and shall have attached thereto such supporting documentation as
is reasonably necessary to provide a basis for the estimated
adjustments shown therein. The Closing Statement shall be based
on actual information available to UTPC at the time of its
preparation and upon UTPC's good faith estimates and adjustments.
Each party and its accountants shall be provided access to all of
Enstar's books, records, computer runs and other documents
containing information on which the Closing Statement is based
for the purpose of conducting an audit or such other review as
such party may deem appropriate. As used in this Section 1.5 the
term "Newstar Assets" and "UT Assets" shall include all assets
that would have been Newstar Assets or UT Assets, respectively on
the Closing Date but for their prior sale, disposal or other
disposition during the Initial Closing Period.

-2-

(b) As more fully set forth on Schedule 1.5 hereto, the
Closing Statement shall cover operations related to the Newstar
Assets and the UT Assets as if during the Initial Closing Period
Newstar had owned the Newstar Assets and UT Development had owned
the UT Assets, which include the following:

(i) The Newstar Closing Statement shall set forth an
estimated aggregate amount for (A) net operating income accruing
from the Newstar Assets, net of capital expenditures incurred
during the Initial Closing Period to be allocated to Newstar and
(B) the acquisition or sale of any Newstar Assets during the
Initial Closing Period to be charged or credited to Newstar; and

(ii) The UT Closing Statement shall set forth an
estimated
aggregate amount for (A) net operating income accruing
from the UT
Assets, net of capital expenditures accruing during the
Initial Closing
Period to be allocated to UT Development and (B) the
acquisition or sale
of any UT Assets during the Initial Closing Period to be
charged or
credited to UT Development.

(c) General and administrative expenses,
interest expense and
income tax expense incurred, and net operating income accruing
with respect to
Assets which are not Newstar Assets or UT Assets as well as
exploration
expenses and production payment interest for all the Assets,
shall be shared in
accordance with Schedule 1.5 hereto. In addition, the Closing
Statement shall
include special adjustments set forth on Schedule 1.5 hereto.

(d) On the Closing Date, Newstar or UT
Development, shall by
wire transfer to a designated account, make payments (if any)
required to the
other. With respect to any amounts owed by Newstar or UT
Development to the
other pursuant to this Section 1.5(d), Ultramar and UTPC hereby
agree to
guarantee the timely payment of such amounts by Newstar and UT
Development,
respectively. With respect to any amounts owed to Newstar or UT
Development,
such party may elect to have the other make such payments to
Enstar on its
behalf and direct Enstar to apply the same to its affiliate's
contribution
amount owed to Enstar in order to effectuate the Discharge
Agreement (as
defined in Section 2.2).

ARTICLE 2

CLOSING AND CERTAIN ACTIONS OF THE
PARTIES PRIOR TO CLOSING

Section 2.1. Time and Place of Closing.

(a) The conveyance and distribution of the
Transferred Assets
for the Reorganization, as contemplated by this Agreement (the
"Closing"),
shall, unless otherwise agreed to in writing by the parties
hereto, take place
at the offices of Union Texas Petroleum Corporation, 1330 Post
Oak Boulevard,
Houston, Texas at 10:00 a.m. (Houston time) on the later of (a)
January 15,
1990 or (b) a date that is the fifth business day following the
date on which
Unimar and Enstar obtain a ruling (the "IRS Ruling") from the
Internal Revenue
Service (the "IRS") regarding application of Section 355 of the
Internal
Revenue Code of 1986, as amended (the "Code") to the
Reorganization.

-3-

(b) The date on which the Closing occurs is
hereinafter
referred to as the "Closing Date." The Reorganization shall be
effective for
purposes of the Closing Statement and the Closing Period
Adjustment Statement
(as defined in Section 9.7) only as of January 1, 1989 (the
"Valuation Date").

Section 2.2. Related Agreements. (a) Upon the
terms and subject
to the conditions, exceptions and reservations of this Agreement,
at the
Closing the appropriate parties hereto shall execute and deliver
the following
agreements:

(i) the Conveyances;

(ii) the Transition Space and Services Agreement,
in
substantially the form attached hereto as Exhibit E (the
"Transition
Agreement"), providing for transitional office space, use
of office
equipment and assistance of UTPC after the Closing;

(iii) the Termination and Release Agreement, in
substantially
the form attached hereto as Exhibit F (the "Discharge
Agreement"),
providing for the full payment of the debt and obligations
of Enstar
under the $150,000,000 Credit Agreement, dated October 3,
1984, as
amended (the "Enstar Credit Agreement"), and the
applicable releases of
liens and security interests and such other necessary
related agreements
for the purpose of such discharge of debt;

(iv) the Assumption and Indemnification
Agreement, in
substantially the form attached hereto as Exhibit G (the
"Assumption
Agreement"), providing for the assumption by Newstar and
UT Development
of certain liabilities and claims of Enstar and for the
indemnification
for certain matters by the respective parties hereto;

(v) the Agreement Regarding Certain Natural Gas
Sales and
Transportation Transactions (the "Marketing Agreement"),
in
substantially the form attached hereto as Exhibit H,
regarding marketing
restrictions on certain properties of Enstar;

(vi) the Amendment No. 2 to the Agreement of
General
Partnership of Unimar Company, dated as of May 22, 1984
(the
"Partnership Agreement"), between Unistar and Ultrastar in
substantially
the form attached hereto as Exhibit J (the Partnership
Amendment);

(vii) the Termination Agreement (the Termination
Agreement) in
substantially the form attached hereto as Exhibit K,
providing for the
termination of the partys' rights and obligations under
the Management
and Agency Agreement dated September 25, 1984 (the
"Management
Agreement");

(viii) the Amendment to the Letter Agreement, dated
October 25,
1985 (the "Amended 1985 Agreement"), among Unistar,
Ultrastar and
certain other parties as set forth therein and relating to
the E. A.
McIlhenny Estate No. 1 Well ("McIlhenny No. 1 Well")
located in Iberia
Parish, Louisiana, in substantially the form attached
hereto as Exhibit
L herein;

-4-

(ix) the Amendment to the Letter Agreement, dated
December 3,
1987 (the "Amended 1987 Agreement"), among Unistar,
Ultrastar and
certain other parties as set forth therein and relating to
the E. A.
McIlhenny Estate No. 2 Well ("McIlhenny No. 2 Well")
located in Iberia
Parish, Louisiana, in substantially the form attached
hereto as Exhibit
M herein;

(x) the Assignments, in substantially the form
attached hereto
as Exhibit N; and

(xi) the Seismic Agreement (the "Seismic
Agreement") in
substantially the form attached hereto as Exhibit O,
providing for the
rights and obligations relating to Enstar's seismic data.

The agreements listed in this Section 2.2 are collectively
referred to in this
Agreement as the "Related Agreements." The parties hereto agree
that between
the date hereof and the Closing Date any of the Exhibits,
including the Related
Agreements, may be amended or changed in writing upon the mutual
agreement of
the parties hereto.

(b) Each party hereto shall use its best efforts
to obtain or
cause to be obtained as soon as practicable all third party
non-governmental
consents necessary or appropriate for the assignment and transfer
of the
Transferred Assets (individually a "Consent" and collectively the
"Consents");
provided, however, that no party shall be required to make any
material
expenditure or enter into any materially onerous agreement in
order to obtain
any such Consent; and provided, further, that prior to the
Closing, Enstar
shall obtain all consents and waivers necessary to carry out the
transactions
set forth in the Discharge Agreement. All notices to third
parties shall be
coordinated among the parties. If any Consent is not obtained by
the Closing,
then Enstar shall continue to hold as nominee for Newstar or UT
Development, as
the case may be, the properties and/or rights subject to such
Consents until
such time as such Consent is obtained. The party on whose behalf
Enstar is
holding such properties and/or rights shall hold harmless Enstar
against any
loss, cost or expense arising from Enstar acting as nominee in
such regard.

(c) UTPC on behalf of Unimar shall deliver to
Ultrastar at
Closing revised versions of Schedules 3.3(f) and 3.3(g), the
current versions
of which are attached hereto, which have been updated so as to be
true,
complete and correct as of the most recent month prior to the
Closing Date for
which such information is reasonably available.

(d) Unimar shall use its best efforts to
deliver, and shall
cause Enstar to deliver (but only to the same extent permitted
under Section
2.7 hereto and without incurring material expense), (i) to
Newstar original (or
copies with respect to accounting information upon the mutual
agreement of the
parties hereto) books, records, accountants' work papers,
surveys, claims and
litigation files, maps, studies, contracts, geological and
geophysical data
(including without limitation third party seismic data), all
computer software
(including source magnetic tapes and system and program
documentation), and
land title and Division and Transfer Order files, of Unimar and
Enstar and its
affiliates directly relating to the ownership and operation of
the Newstar
Assets and (ii) to UT Development original (or copies with
respect to
accounting information upon the mutual agreement of the parties
hereto) books,
records, accountants' work papers, surveys, claims and litigation
files, maps,
studies, contracts, geological and geophysical

-5-

data (including without limitation third party seismic data), all
computer
software (including source magnetic tapes and system and program
documentation), and land title Division and Transfer Order files,
of Unimar and
Enstar and its affiliates directly relating to the ownership and
operation of
the UT Assets.

Section 2.3. Public Announcements. From the date
hereof and for
a period of one year after the date hereof, each party hereto
shall consult
with the other parties hereto prior to any public announcement by
such party
regarding the existence of this Agreement, the contents hereof or
the
transactions contemplated hereby and to obtain the prior approval
of the other
parties hereto as to the content of any such disclosure, which
approval shall
not be unreasonably withheld. This provision shall not apply,
however, to any
announcement or written statement which, upon advice of counsel,
is required by
law to be made, except that any party required to make such
announcement shall,
whenever practicable, consult with the other party concerning the
timing and
content of such announcement or statement before it is made.

Section 2.4. Confidential Information. The
parties hereto shall
hold in confidence all aspects of the transactions contemplated
by this
Agreement. The parties hereto shall hold in confidence all
information and
data concerning the Transferred Assets that is obtained in
connection with the
transactions contemplated by this Agreement (other than
information and data
that is or becomes generally available to the public other than
through
disclosure by any of the parties hereto or their affiliates or
representatives); provided, however, the foregoing shall not
restrict necessary
disclosures (a) to a party's affiliates or its officers,
employees or
representatives (b) in compliance with applicable securities or
other laws or
any order by court or governmental agency or (c) in order to
obtain necessary
consents, approvals or rulings (without violating any
confidentiality
obligation to a third party). The aforesaid obligation shall
terminate at such
time as the information and data in question (a) becomes
generally available to
the public other than through the breach by any of the parties
hereto or their
affiliates or representatives of said obligation or (b) with
respect to a
party, relate to a Transferred Asset that is owned by such party
or its
affiliates after consummation of the Reorganization.

Section 2.5. Best Efforts to Meet Conditions.
Each of the
parties hereto shall use its best efforts to cause all of the
conditions to its
obligations to consummate the transactions contemplated herein to
be met as
soon after the date hereof as practicable.

Section 2.6. Insurance Coverage of Subsidiaries.
Ultrastar and
Unistar shall obtain, and have in force and effect on and as of
the Closing
Date insurance coverage as deemed appropriate by them for losses,
liabilities
and claims arising out of events, acts or omissions taking place
on and
subsequent to the Closing Date and which are in connection with
the Transferred
Assets and operation of Newstar and UT Development, respectively.
Neither
Ultrastar nor Unistar assumes the risk management and insurance
functions of
the other and each is free to manage the respective risks
associated with the
respective Transferred Assets and operations. Each of Ultrastar
and Unistar
acknowledges that it may be required to promptly provide to
certain parties
having business relationships with Newstar and UT Development
certificates in
proper form reflecting such coverage.

Section 2.7. Access to Records and Properties.
Between the date
of this Agreement and the Closing Date, Unimar, UTPC, Ultramar,
Unistar and
Ultrastar agree, subject to Section

-6-

2.4, (a) to give or cause to be given to each of the parties
hereto and its
representatives reasonable access, including the provision of
adequate office
space, during normal business hours to the Transferred Assets and
to all the
books, records, accountants' work papers, surveys, claims and
litigation files,
maps, studies, contracts, geological and geophysical data
(including without
limitation third party seismic data), all computer software
(including source
magnetic tapes and system and program documentation), and land
title and
Division and Transfer Order files, of Unimar and Enstar and its
affiliates
pertaining to the ownership and operation of the Transferred
Assets and (b) to
cause the officers of Enstar and its affiliates to furnish or to
make available
to the parties hereto such financial and operating data and other
information
with respect to the business and properties of Enstar relating to
the
Transferred Assets as the parties hereto shall from time to time
reasonably
request, but in either case only to the extent reasonably
feasible and that
such parties may do so without disclosing the internal work
product of any
party hereto (other than Enstar) or violating any confidentiality
obligation to
a third party and to the extent such parties have authority to
grant such
access. Unimar and Enstar shall use their best efforts to obtain
approval from
third parties to waive any confidentiality obligation or
limitation on access
for the benefit of the parties hereto; provided, however, prior
to Closing each
party shall be responsible for obtaining approval for access to
seismic data
that relates to data for which it will have rights under the
Seismic Agreement.

Section 2.8. Copies of Information. Subject to
Section 2.4,
prior to the Closing Date Unimar shall permit the parties hereto
and their
representatives to make copies of information contained in the
books, records
and files of Enstar, or in the books, records or files to which
it has access
insofar as the parties hereto may reasonably request and insofar
as such
information directly relates to the Transferred Assets, to the
extent permitted
under Section 2.7 hereof and at the expense of Enstar.

Section 2.9. Government Reviews. Each of the
appropriate
parties hereto shall in a timely manner (a) make required filings
with, prepare
applications to and conduct negotiations with each governmental
agency as to
which such filings, applications or negotiations are necessary or
appropriate
in the consummation of the transactions contemplated hereby,
including, but not
limited to, the Internal Revenue Service in connection with
securing a
favorable ruling that the Reorganization will qualify as a
tax-free exchange
and distribution under Section 355 of the Internal Revenue Code
of 1986, as
amended (the "Code"), in form and substance reasonably
satisfactory to the
General Partners as set forth at Exhibit I (the "IRS Request") as
the same may
be amended or revised and (b) provide such information as each
may reasonably
request to make such filings, prepare such applications and
conduct such
negotiations. All such filings, applications and negotiations
shall be
coordinated among the parties. Each of the parties hereto shall
cooperate with
and use its best efforts to assist the other parties hereto in
pursuing such
filings, applications and negotiations.

Section 2.10. Conduct of Business. From December
31, 1988 to
the date of this Agreement, Unimar, Enstar, UTPC, Ultramar,
Unistar and
Ultrastar have conducted the business and operations of Enstar
with respect to
the Transferred Assets in accordance with the practices generally
followed in
the petroleum industry and UTPC, Ultrastar and Enstar have
materially complied
with their obligations under the Management Agreement. In
addition Unimar,
Enstar, UTPC, Ultramar, Unistar and Ultrastar shall conform to
the requirements
of this Section 2.10 from the date of this Agreement to the
Closing Date.

-7-

Section 2.11. Letters in Lieu, Federal and State
Assignments and
Notices to Operators and Limited Partners.

(a) UTPC as contract manager pursuant to the
Management
Agreement shall deliver to Ultrastar for its review and approval
a list of
persons who must receive Letters in Lieu of Division and Transfer
Orders
relating to the Transferred Assets. UTPC on behalf of Enstar
shall also cause
to be prepared in satisfactory form, to be executed on the
Closing Date, such
Letters in Lieu of Division and Transfer Orders as necessary to
reflect the
transactions contemplated hereby.

(b) UTPC as contract manager pursuant to the
Management
Agreement shall cause to be prepared and executed on the Closing
Date all
assignments, if any, necessary to convey in accordance with
Section 1.1 all
interests and rights to federal, Indian or state leases and
properties included
in the Transferred Assets. The assignments shall be satisfactory
in form and
substance to the parties hereto and in accordance with applicable
state and
federal requirements.

(c) UTPC as contract manager pursuant to the
Management
Agreement shall cause to be prepared and executed on the Closing
Date all
notices required by operating agreements to which Enstar, Unimar
or an
affiliate is a party covering any of the Transferred Assets or
portions thereof
to the effect that Enstar has assigned to Newstar and UT
Development all of its
interest in the property subject to such operating agreements.

(d) UTPC as contract manager pursuant to the
Management
Agreement shall deliver to Ultrastar for its review and approval
all notices
required by the Partnership Agreements and shall cause all such
notices to be
prepared and duly executed and delivered.

Section 2.12. IPU Indenture. If necessary to
comply with the
minimum capital requirements of the Indenture, executed by Unimar
and the
Trustee thereto, in connection with the Indonesian Participating
Units, dated
as of September 25, 1984, the General Partners shall make
additional capital
contributions to Unimar.

Section 2.13. Inconsistent Activities. Unless and
until this
Agreement has been terminated pursuant to Article 7, neither
General Partner
shall without the prior written consent of the other General
Partner (a)
directly or indirectly solicit, entertain, or cause any other
person to solicit
or entertain, any offer to acquire the Transferred Assets, (b)
provide
information to another person concerning the Transferred Assets
(except in the
ordinary course of the operation of the Transferred Assets or as
permitted
pursuant to Section 2.4) or (c) enter into any negotiations for
or enter into
any agreement that provides, or under certain circumstances would
provide, for
the acquisition of the Transferred Assets by a person other than
as
contemplated by this Agreement.

Section 2.14. Area of Mutual Interest Agreements.
All area of
mutual interest agreements concerning or affecting the
Transferred Assets
between Unistar and its affiliates, on the one hand, and
Ultrastar and its
affiliates, on the other, including, but not limited to, the
Partnership
Agreement, the Management Agreement and the Enstar Offshore
Properties Area of
Mutual Interest Agreement, dated March 9, 1988 (the "Offshore
AMI") shall be
terminated and shall be of no further force and effect after
Closing.

-8-

Section 2.15. Capital Contributions. UTPC and
Ultramar shall
cause their respective affiliate that is a General Partner to
make a capital
contribution to Enstar, which may include application of amounts
pursuant to
Section 1.5(d), in equal amounts sufficient to provide for the
full payment of
the debt and other obligations of Enstar under the Enstar Credit
Agreement in
order to consummate the Discharge Agreement.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES

Section 3.1. Representations and Warranties of
UTPC. UTPC
represents and warrants as follows:

(a) Each of UTPC, Unistar and UT Development is
a corporation
duly organized, validly existing and in good standing
under the laws of
the state of its incorporation and has all requisite
corporate power and
authority to own, lease and operate its properties and to
carry on its
business as now being conducted, and is duly qualified to
do business
and in good standing in each jurisdiction in which the
character of its
business made such qualification necessary except where
the failure so
to qualify would not have a material adverse effect on its
financial
condition or operations. Each of UTPC, Unistar and UT
Development has
heretofore delivered to Ultrastar true, correct and
complete copies of
its certificate of incorporation and bylaws, as amended to
the date
hereof.

(b) The execution and delivery of this Agreement
and the
Related Agreements to which it is a party, and the
consummation of the
transactions contemplated hereby and thereby have been
duly and validly
authorized by all necessary corporate action on the part
of each of
UTPC, Unistar and UT Development and this Agreement and
the Related
Agreements are, or upon their execution and delivery will
be, valid and
binding obligations of each of UTPC, Unistar and UT
Development,
enforceable against each of them in accordance with their
terms, except
that such enforcement may be limited by any applicable
bankruptcy,
insolvency, reorganization, moratorium or other similar
laws now or
hereafter in effect affecting creditors' rights generally
and by general
principles of equity (regardless of whether enforcement is
sought in a
proceeding in equity or at law). Neither the execution
and delivery by
each of UTPC, Unistar and UT Development of this Agreement
or the
Related Agreements to which it is a party nor the
consummation of the
transactions contemplated hereby and thereby, nor
compliance by UTPC,
Unistar or UT Development with any of the provisions
hereof or thereof,
will (i) conflict with or result in a breach of any
provision of its
certificate of incorporation or bylaws, (ii) result in a
material
default (with due notice or lapse of time or both) or give
rise to any
right of termination, cancellation or acceleration under
any of the
terms, conditions or provisions of any note, bond,
mortgage, indenture,
license or agreement to which any of them is a party or by
which they or
any of their properties or assets may be bound or (iii)
violate any
order, writ, injunction, judgment, decree, statute, rule
or regulation
applicable to UTPC, Unistar or UT Development or any of
their properties
or assets, assuming receipt of the Consents and all
routine governmental
consents normally acquired after the

-9-

consummation of transactions such as transactions of the
nature
contemplated by this Agreement and the Related Agreements.

(c) Neither execution and delivery of, nor
performance under,
this Agreement or the Related Agreements is prohibited by
or requires
any consent, authorization, approval or registration
(other than the
Consents and such as are customarily obtained subsequent
to the
consummation of transactions such as the transactions
contemplated
hereby and thereby) under any law, rule or regulation, or
any judgment,
order, writ, injunction or decree binding upon UTPC,
Unistar or UT
Development.

(d) None of Unimar, Enstar, Ultrastar or Newstar
will directly
or indirectly incur any liability or expense as a result
of undertakings
or agreements of UTPC, Unistar or UT Development for
brokerage fees,
finder's fees, agent's commissions or other similar form
of compensation
in connection with this Agreement or any agreement or
transaction
contemplated hereby.

(e) UTPC is experienced and knowledgeable in the
oil and gas
business. UTPC has provided access to the extent
permitted under
Section 2.7 to all its books and records pertaining to the
Transferred
Assets and has been afforded the opportunity to examine
the materials,
books and records maintained by the operator with respect
to the
Transferred Assets and by the parties hereto and has been
given access
to other information relating to Enstar and the
Transferred Assets.
Prior to entering into this Agreement, UTPC was advised by
its agents,
representatives and counsel and such other persons it
deemed appropriate
concerning this Agreement. UTPC has made an independent
investigation
and evaluation of, and appraisal and judgment with respect
to, the
geologic and geophysical characteristics of the
Transferred Assets and
the estimated hydrocarbon reserves recoverable therefrom,
title to the
Transferred Assets and ownership and operation of the
Transferred
Assets.

(f) UTPC has complied with its obligations under
the
Management Agreement except to the extent such
non-compliance (i) has
been consented to by Ultramar or its affiliates or (ii)
will not have a
materially adverse consequence on the aggregate value of
the Newstar
Assets taken as a whole. Since January 1, 1989 UTPC has
not made any
material transfer of equipment related to the Transferred
Assets, which
are not in the ordinary course of business and have not
been documented
in UTPC's records.

Section 3.2. Representations and Warranties of
Ultramar.
Ultramar represents and warrants as follows:

(a) Each of Ultramar, Ultrastar and Newstar is a
corporation
duly organized, validly existing and in good standing
under the laws of
the state of its incorporation and has all requisite
corporate power and
authority to own, lease and operate its properties and to
carry on its
business as now being conducted, and is duly qualified to
do business
and in good standing in each jurisdiction in which the
character of its
business makes such qualification necessary except where
the failure so
to qualify would not have a material adverse effect on its
financial
condition or operations. Each of Ultramar, Ultrastar and

-10-

Newstar has heretofore delivered to Unistar true, correct
and complete
copies of its certificate of incorporation and bylaws, as
amended to the
date hereof.

(b) The execution and delivery of this Agreement
and the
Related Agreements to which it is a party, and the
consummation of the
transactions contemplated hereby and thereby, have been
duly and validly
authorized by all necessary corporate action on the part
of each of
Ultramar, Ultrastar and Newstar and this Agreement and the
Related
Agreements are, or upon their execution and delivery will
be, valid and
binding obligations of each of Ultramar, Ultrastar and
Newstar,
enforceable against each of them in accordance with their
terms, except
that such enforcement may be limited by any applicable
bankruptcy,
insolvency, reorganization, moratorium or other similar
laws now or
hereafter in effect affecting creditors' rights generally
and by general
principles of equity (regardless of whether enforcement is
sought in a
proceeding in equity or at law). Neither the execution
and delivery by
each of Ultramar, Ultrastar and Newstar of this Agreement
or the Related
Agreements to which it is a party nor the consummation of
the
transactions contemplated hereby and thereby, nor
compliance by
Ultramar, Ultrastar or Newstar with any of the provisions
hereof or
thereof, will (i) conflict with or result in a breach of
any provision
of its certificate of incorporation or bylaws, (ii) result
in a material
default (with due notice or lapse of time or both) or the
creation of
any lien or give rise to any right of termination,
cancellation or
acceleration under any of the terms, conditions or
provisions of any
note, bond, mortgage, indenture, license or agreement to
which either or
them is a party or by which they or any of their
properties or assets
may be bound or (iii) violate any order, writ, injunction,
judgment,
decree, statute, rule or regulation applicable to
Ultramar, Ultrastar or
Newstar, or any of their properties or assets, assuming
receipt of the
Consents and all routine governmental consents normally
acquired after
the consummation of transactions such as transactions of
the nature
contemplated by this Agreement and the Related Agreements.

(c) Neither execution and delivery of, nor
performance under,
this Agreement or the Related Agreements is prohibited by
or requires
any consent, authorization, approval or registration
(other than the
Consents and such as are customarily obtained subsequent
to the
consummation of transactions such as the transactions
contemplated
hereby) under any law, rule or regulation, or any
judgment, order, writ,
injunction or decree binding upon Ultramar, Ultrastar or
Newstar.

(d) None of UTPC, Unimar, Enstar, Unistar or UT
Development
will directly or indirectly incur any liability or expense
as a result
of undertakings or agreements of Ultramar, Ultrastar or
Newstar for
brokerage fees, finder's fees, agent's commissions or
other similar form
of compensation in connection with this Agreement or any
agreement or
transaction contemplated hereby.

(e) Ultramar is experienced and knowledgeable in
the oil and
gas business. Ultramar has provided access to the extent
permitted
under Section 2.7 to all its books and records pertaining
to the
Transferred Assets and has been afforded the opportunity
to examine the
materials, books and records maintained by the operator
with respect to
the Transferred Assets and by the parties hereto and has
been given
access to other information relating to Enstar and the
Transferred
Assets. Prior to entering into this

-11-

Agreement, Ultramar was advised by its agents,
representatives and
counsel and such other persons it deemed appropriate
concerning this
Agreement. Ultramar has had an opportunity to make an
independent
investigation and evaluation of, and appraisal and
judgment with respect
to, the geologic and geophysical characteristics of the
Transferred
Assets and the estimated hydrocarbon reserves recoverable
therefrom,
title to the Transferred Assets and ownership and
operation of the
Transferred Assets.

Section 3.3. Representations and Warranties of
Unimar. Unimar
hereby represents and warrants that:

(a) Unimar is a general partnership duly formed
pursuant to
the Texas Act and has all necessary partnership power and
authority to
carry on its business as now being conducted. Unimar has
all the
partnership power and authority to enter into this
Agreement and the
Related Agreements, to which it is a party, and consummate
the
Reorganization and transactions contemplated hereby and
thereby.

(b) Each of Enstar and the Subsidiaries is a
corporation duly
organized, validly existing and in good standing under the
laws of its
state of incorporation and has all necessary corporate
power and
authority to carry on its business as it is now being
conducted. Unimar
has heretofore delivered to UTPC and Ultramar true and
complete copies
of (i) Enstar's certificate of incorporation and bylaws
(the
"Certificate of Incorporation" and the "Bylaws,"
respectively) as in
existence on the date hereof and (ii) the charter and
bylaws of each of
the Subsidiaries as in existence on the date hereof. Each
of Enstar and
the Subsidiaries has the corporate power and authority to
enter into
this Agreement and the Related Agreements, to which it is
a party, and
to consummate the Reorganization and transactions
contemplated hereby
and thereby. On the Closing Date, Enstar shall own all of
the issued
and outstanding shares of capital stock of the
Subsidiaries free and
clear of all liens, encumbrances, charges or claims, and
all of such
shares shall be validly issued, fully paid and
non-assessable.

(c) The execution and delivery of this Agreement
and the
Related Agreements to which it is a party, and the
consummation of the
transactions contemplated hereby and thereby, have been
duly authorized
by all necessary corporate action on the part of each of
Enstar and the
Subsidiaries and partnership action on the part of Unimar.
This
Agreement and the Related Agreements are valid and binding
obligations
of each of Unimar, Enstar and the Subsidiaries enforceable
against each
of them in accordance with their terms.

(d) The execution and delivery by each of
Unimar, Enstar and
the Subsidiaries of this Agreement and the Related
Agreements to which
it is a party do not, and the performance of this
Agreement and the
Related Agreements and the consummation of the
transactions contemplated
hereby and thereby will not (i) conflict with any
provision of the
charter or bylaws of Enstar or the Subsidiaries, with the
partnership
agreement of Unimar or with the Partnership Agreements or
(ii) violate
any law, rule or regulation or any judgment, decree,
order, governmental
permit or license to which Unimar, Enstar, the
Subsidiaries or any of
the Partnerships is subject, assuming receipt of all
routine
governmental consents normally acquired after the
consummation of
transactions such as

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transactions of the nature contemplated by this Agreement
and the
Related Agreements or (iii) subject to execution of the
Discharge
Agreement, conflict with, or result in a breach or
violation of, or a
default under, or give rise to any right of termination,
cancellation or
acceleration under any of the terms, conditions or
provisions of any
agreement, indenture or instrument of Unimar, Enstar, the
Subsidiaries
or of any of the Partnerships or to which Unimar, Enstar,
the
Subsidiaries or any of the Partnerships or any of the
Transferred Assets
or such entities' other properties or assets is subject
other than
violations, conflicts, breaches or defaults which will not
have a
material adverse effect on Unimar, Enstar, the
Subsidiaries or any of
the Partnerships or preferential purchase rights,
requirements for
consents to assignment or rights of first refusal with
respect to the
Transferred Assets that shall have been discharged or
waived and
required consents received on or before the Closing Date.

(e) The consummation of the transactions
contemplated by this
Agreement and the Related Agreements, and the consummation
of the
transactions contemplated hereby and thereby, will not
require the
consent, approval or authorization of any governmental or
regulatory
authority or any other person under any material permit,
license,
agreement, indenture or other instrument to which Unimar,
Enstar, the
Subsidiaries or any of the Partnerships is a party or by
which Unimar,
Enstar, the Subsidiaries or any of the Partnerships is
bound, other than
(i) consent of the lenders that are parties to the Enstar
Credit
Agreement; and (ii) such other consents and approvals as
are customarily
obtained subsequent to the consummation of the
transactions such as the
transactions contemplated hereby and thereby. No consent,
vote or other
approval by the limited partners of the Partnerships is
required to
effect the transactions contemplated by this Agreement and
the Related
Agreements and none of such transactions will accelerate
any right that
such limited partners may presently have to cause the
redemption of such
securities, or change any of the voting or other rights
that such
limited partners are presently entitled to exercise under
the
Partnership Agreements. No declaration, filing or
registration with any
governmental or regulatory authority is required of
Unimar, Enstar, the
Subsidiaries or any of the Partnerships in connection with
any such
transaction, except for such filings as may be required
under state blue
sky or securities laws and except for the delivery and
filing of
appropriate documents evidencing the Reorganization as
required by the
Delaware General Corporation Law and applicable state
partnership laws.

(f) To the best of its knowledge and belief,
there are no (i)
actions, suits or proceedings pending or threatened, and
there are no
orders, decrees, injunctions or judgments of any court or
of any
federal, state, or local department, agency, commission,
board, bureau
or instrumentality instituted or obtained, or pending or
threatened,
against Unimar, Enstar, UTPC, Ultramar, Ultrastar,
Unistar, Newstar, UT
Development or any of the Partnerships relating to the
Transferred
Assets, except as listed on Schedule 3.3(f) hereto (the
"Litigation
Schedule"), which, individually or in the aggregate, would
materially
adversely affect the value of any field by an amount in
excess of
$50,000, which field is in the Transferred Assets of such
parties or
(ii) material written claims asserted by Unimar, Enstar,
UTPC, Ultramar,
Ultrastar, Unistar, Newstar, UT Development or any of the
Partnerships,
relating to the Transferred Assets, at law or in equity,
or before any
governmental agency or instrumentality, domestic or
foreign, except as
listed on Schedule 3.3(f) hereto (the "Claims Schedule").

-13-

(g) Except as specifically described on Schedule
3.3(g), to
the best of its knowledge and belief neither Enstar, the
Subsidiaries
nor any of the Partnerships is obligated to deliver any
material makeup
volumes of oil, gas or associated minerals from the
Transferred Assets
on account of prepayment, take-or-pay or similar
obligations previously
received or accrued by Enstar or the Partnership.

(h) Except as specifically described on Schedule
3.3(h), as of
the Valuation Date to the best of its knowledge and
belief, no gas or
oil balancing agreement or similar arrangement to which
any production
from the Transferred Assets is subject entitles any
interest owner in
such production to receive after the Closing Date any
material makeup
volumes or proceeds of production on account of excess
production
received by Enstar or the Partnerships prior to the
Closing Date.

ARTICAL 4
ADDITIONAL AGREEMENTS AND COVENANTS

Section 4.1. IRS Covenant. From the date hereof,
each of the
parties to this Agreement covenants and agrees that it will fully
comply with
the requirements, representations and conditions that were set
forth in the IRS
Request and the statutory basis for the receipt of a favorable
IRS Ruling for
so long as necessary in order for the Reorganization to qualify
as a
distribution to which Section 355 of the Code applies; provided,
however, if a
favorable IRS Ruling in form reasonably satisfactory to each of
the General
Partners is not received, then this covenant will not apply and
be of no force
and effect.

ARTICLE 5

CONDITIONS TO CLOSING

Section 5.1. Conditions to Obligations of the
Parties hereto to
Close. The obligations of the parties hereto to consummate the
transactions
contemplated by this Agreement and the Related Agreements are
subject to the
satisfaction of the following conditions unless waived in writing
by the
parties hereto:

(a) The representations and warranties of the
parties hereto
set forth herein (or as supplemented on or prior to the
Closing Date)
shall be true and correct as of the date of this Agreement
and as of the
Closing Date as though made on and as of the Closing Date,
except as to
inaccuracies individually or in the aggregate that do not
have, and in
the future are not reasonably expected to have, a
materially adverse
effect on the Transferred Assets taken as a whole;

(b) Each of the parties to this Agreement and
the Related
Agreements shall have performed all obligations and
agreements and
complied with all covenants and conditions applicable to
it contained in
this Agreement and the Related Agreements prior to or on
the Closing
Date and shall have executed and delivered the Related
Agreements prior
to or

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on the Closing Date;

(c) No action, suit, proceeding or claim shall
be pending or
threatened by any limited partner of any Partnership
against Enstar, any
of the Partnerships or any party hereto, which could
materially
adversely affect the business, financial condition,
results of
operations or prospects of Enstar, any of the
Partnerships, the
Transferred Assets or any party hereto or impose material
conditions on
the transactions contemplated herein;

(d) UTPC, Ultramar and Unimar shall have
received from each
other an officer's certificate dated the Closing Date,
signed by its
President or any of its Vice Presidents, confirming
subsections (a), (b)
and (c) of this Section 5.1; and

(e) Unimar and Enstar shall have received a
favorable IRS
Ruling in form reasonably satisfactory to each of the
General Partners
on the IRS Request that the Reorganization will qualify as
a
distribution to which Section 355 of the Code applies.

ARTICLE 6

SURVIVAL OF REPRESENTATIONS AND WARRANTIES

All representations and warranties made in this
Agreement, or in
any officers' certificate provided for by this Agreement, by UTPC
and Ultramar
shall terminate on, and be of no further force and effect after,
the Closing
Date. The sole remedy for a breach of a representation and
warranty by UTPC or
Ultramar, as the case may be, shall be the right of the other
party under
Sections 5.1 and 7.1 to terminate this Agreement, and after the
Closing Date
neither UTPC nor Ultramar shall bear any responsibility with
respect to the
breach of any representation or warranty. All representations
and warranties
made by Unimar in Section 3.3 of this Agreement shall be
continuing and with
respect to Sections 3.3(a) through (f) shall survive the Closing
Date for five
years and with respect to Sections 3.3(g) and (h) shall survive
the Closing
Date for one year.

ARTICLE 7

TERMINATION AND AMENDMENT

Section 7.1. Termination. This Agreement may be
terminated:

(a) By the mutual written consent of the parties
at any time
prior to the Closing Date;

(b) By any party after August 31, 1990 if the
Closing has not
occurred by that date;

(c) By any party if after the date hereof and
prior to the
Closing any legislation that would have the effect of
prohibiting or
making unlawful the transfer of Assets by Unimar, the
General Partners
or Enstar or acquisition or ownership of the Transferred
Assets by the
Subsidiaries and the General Partners has been enacted
into law;

-15-

(d) By any party on the last day on which the
Closing may
occur pursuant to Section 2.1 if the conditions to Closing
in Section
5.1 are not fulfilled or waived; provided that the failure
to consummate
the transaction on or before such date is not caused by
the willful
failure of the party requesting termination.

Any party shall exercise a right of termination
provided above by
written notice to the other party. Notwithstanding any other
provision of this
Agreement, the provisions of Sections 2.3, 2.4, 9.6, 9.10 and
9.17 shall
survive the termination of this Agreement.

Section 7.2. Amendment.

(a) At any time prior to the Closing this
Agreement may be
amended or modified in any respect by the parties by an
agreement in
writing executed in the same manner as this Agreement.

(b) No supplement, modification, waiver or
termination of this
Agreement shall be binding unless executed in writing by
the party to be
bound thereby.

ARTICLE 8

EXPENSES

(a) Except as provided herein, Enstar shall bear
and pay
expenses incurred by the parties hereto in connection with
this
Agreement, including accounting, petroleum engineering and
other fees
and expenses other than third party fees or charges by
licensors to
obtain third party releases with respect to seismic data,
which fees and
charges shall be paid by the party desiring to obtain such
seismic data.
In connection with the dissolution of certain other
partnerships for
which Enstar is a general partner (other than the
Partnerships defined
herein) Enstar shall pay all legal fees and expenses.

(b) Unistar and Ultrastar hereby agree that they
shall equally
bear and pay all fees, costs and expenses incurred by
Enstar (if any) in
connection with the termination (for tax purposes) of the
Partnerships
pursuant to Section 708 of the Code as a result of the
Reorganization on
the Closing Date.

ARTICLE 9

MISCELLANEOUS

Section 9.1. Counterparts. This Agreement may be
executed in one
or more counterparts, each of which shall be deemed an original
instrument, but
all such counterparts together shall constitute but one
agreement.

-16-

Section 9.2. Notice. All notices that are required
or may be
given pursuant to this Agreement shall be sufficient in all
respects if given
in writing and delivered personally or by registered or certified
mail, postage
prepaid, as follows:

If to Unistar, UT Development or UTPC:

Union Texas Petroleum Corporation
1330 Post Oak Boulevard
Houston, Texas 77056
Attention: General Counsel

If to Ultramar, Ultrastar or Newstar:

Ultrastar, Inc.
120 White Plains Road
Tarrytown, New York 10591
Attention: General Counsel

If to Unimar or Enstar, to both of the above
addresses.

All notices shall be deemed to have been duly given at the time
of personal
delivery or mailing, except that any notice of termination of
this Agreement
under Article 7 shall be deemed to have been given at the time of
receipt by
the party to which such notice is addressed.

Section 9.3. Further Assurances. From and after
the Closing
Date, at the request of any party, but without further
consideration, a party
hereto will execute and deliver or cause to be executed and
delivered such
other instruments of conveyance and transfer and take such other
actions as any
party reasonably may require more effectively to vest in a party
hereto, or to
put a party hereto or its affiliate to the extent permissable in
possession of,
any of the Transferred Assets.

Section 9.4. Schedules and Exhibits. All Schedules
have been
prepared as of the date hereof (unless otherwise expressly
provided herein) and
Exhibits have been prepared as of the date set out thereon.

Section 9.5. Defined Terms. Terms used in this
Agreement, which
are not otherwise defined herein, shall have the respective
meanings specified
in the General Partnership Agreement of Unimar.

Section 9.6. Assignment. No party hereto shall
assign this
Agreement or any part thereof without the prior written consent
of the other
parties.

Section 9.7. Closing Period Adjustments.

(a) Within 120 days after the Closing, UTPC, on
behalf of
Enstar and for which UTPC will be reimbursed pursuant to
the terms of
the Partnership Agreement, shall

-17-

prepare a certain statement described in this Section 9.7
(the "Closing
Period Adjustment Statement") for each of Newstar and UT
Development,
each of which shall give UTPC and Newstar reasonable
access to its books
and records. The Closing Period Adjustment Statement
shall cover
operations related to the Newstar Assets and the UT Assets
for the time
period beginning on the Valuation Date and ending on the
(i) last day of
the month in which the Closing occurs if the Closing Date
is after the
15th day of such month or (ii) the last day of the month
preceding the
Closing if the Closing Date occurs prior to the 16th day
of a month (the
"Actual Closing Period") as if during the Actual Closing
Period Newstar
had owned the Newstar Assets and UT Development had owned
the UT Assets.
The Closing Period Adjustment Statement is also
hereinafter referred to
as the "Newstar Closing Period Adjustment Statement" and
the "UT
Development Closing Period Adjustment Statement."

(b) As more fully set forth on Schedule 9.7
hereto, the
Closing Period Adjustment Statement shall include the
following:

(i) The Newstar Closing Period Adjustment
Statement
shall set forth (A) net operating income accrued
from the Newstar
Assets, net of capital expenditures incurred,
during the Actual
Closing Period to be allocated to Newstar and (B)
the acquisition
or sale of any Newstar Assets during the Actual
Closing Period to
be charged or credited to Newstar; and

(ii) The UT Development Closing Period
Adjustment
Statement shall set forth (A) net operating income
accrued from
the UT Assets, net of capital expenditures
incurred, during the
Actual Closing Period to be allocated to UT
Development and (B)
the acquisition or sale of any UT Assets during the
Actual
Closing Period to be charged or credited to UT
Development.

(c) General and administrative expenses,
interest expense and
income tax expense incurred, and net operating income
accrued with
respect to Assets which are not Newstar Assets or UT
Assets as well as
exploration expenses and production payment interest for
all the Assets,
shall be shared in accordance with Schedule 9.7 hereto.
In addition,
the Closing Period Adjustment Statement shall include
special
adjustments set forth on Schedule 9.7 hereto.

(d) The Closing Period Adjustment Statement
shall be prepared
in accordance with generally accepted accounting
principles except as
otherwise reflected in the Closing Period Adjustment
Statement for the
Actual Closing Period as if the Actual Closing Period were
a separate
and distinct accounting period. The Closing Period
Adjustment Statement
shall be in such detail and shall contain or have attached
thereto such
supporting documentation as Newstar or UT Development
shall reasonably
request. Each party and its accountants shall be provided
access to all
books, records, computer runs and other documents
containing information
on which the Closing Period Adjustment Statement is based
for the
purpose of conducting an audit thereof or such other
review as such
party may deem appropriate for a period from the date
hereof to the date
two (2) years subsequent to the Closing Date. For the
purposes of this
Section 9.7 the term "Newstar Assets" and "UT Assets"
shall include all
assets that would have been Newstar Assets or

-18-

UT Assets, respectively, on the Closing Date but for their
prior sale,
disposal, destruction or other disposition during the
Actual Closing
Period.

(e) Subject to the right to audit set forth in
Section 9.7(d),
the Closing Period Adjustment Statement shall become final
and binding
on Newstar and UT Development, respectively, on the 30th
day following
the date of receipt thereof, unless prior to such 30th day
such party
shall deliver to UTPC written notice of its disagreement
therewith,
together with proposed changes thereto. If such notice is
delivered,
then the Closing Period Adjustment Statement shall become
final and
binding upon written agreement between Newstar or UT
Development, as the
case may be, and UTPC resolving all disagreements of the
disputing
party. If the Closing Period Adjustment Statement has not
become final
and binding by the 30th day following the receipt by UTPC
of written
notice of disagreement, then such disagreement shall be
submitted to
binding arbitration by the firm of Arthur Andersen & Co.
or other
nationally recognized independent accountants as may be
jointly selected
by Newstar and UT Development. The fees and expenses of
such resolution
shall all be borne by Enstar. The determination of the
Closing Period
Adjustment Statement by such resolution shall be final and
binding upon
UTPC and the disputing party.

(f) Within two days from the date the applicable
Closing
Period Adjustment Statement becomes final and binding, UT
Development or
Newstar, as the case may be, shall by wire transfer to a
designated
account make payments (if any) required thereunder to the
other with
regard to the difference between the Closing Period
Adjustment Statement
and the Closing Statement. With respect to any amounts
owed by Newstar
or UT Development to the other pursuant to this Section
9.7(f), Ultramar
and UTPC hereby agree to guarantee the timely payment of
such amounts by
Newstar and UT Development, respectively.

(g) After the Closing, UTPC shall be responsible
for handling
any open audits, which may arise, that relate to periods
prior to the
Closing Date for which UTPC previously handled under the
Management
Agreement but shall be compensated pursuant to the terms
of the Unimar
Partnership Agreement. To the extent such audits result
in any claims
or liabilities, such claims or liabilities will be for the
benefit of or
be borne by (i) Enstar to the extent such matter relates
to the period
prior to the Valuation Date, (ii) Newstar or UT
Development, as the case
may be, who for purposes of this accounting adjustment is
deemed to own
the applicable Transferred Asset after the Valuation Date
and (iii) by
Enstar with respect to any other audit. Any disagreement
as to
adjustment resulting from such open audit shall be
submitted to binding
arbitration by the firm of Arthur Andersen & Co. or other
nationally
recognized independent accountants as may be jointly
selected by Newstar
and UT Development. The fees and expenses of such
resolution shall be
borne by Enstar. The determination of such open audit
adjustment by
such resolution shall be final and binding upon the
disputing parties.
Payment of any adjustments hereunder shall be handled in
the same manner
as in Section 9.7(f). Newstar shall have the right, at
its election, to
take over the handling of any open audit that relates to
the Newstar
Assets.

-19-

Section 9.8. Payments and Invoices Received After
the Closing.

(a) After the Closing, Newstar and UT
Development shall,
immediately upon their receipt, turn over or cause to be
turned over to
the appropriate party, any amounts from or related to the
Transferred
Assets received by Newstar, UT Development or their
affiliates, which
amounts (i) are accounted for in the Closing Period
Adjustment
Statements and have not been previously turned over to the
appropriate
party in accordance with the Closing Period Adjustment
Statements or
(ii) related to the period prior to the Valuation Date.

(b) After the Closing, Newstar and UT
Development shall,
immediately upon their receipt, turn over or cause to be
turned over to
the appropriate party any invoices or any other demand for
payment for
costs and expenses that were incurred as costs for
operation or
ownership of or expenses related to the Transferred Assets
(i) during
the Closing Period and which are accounted for in the
Closing Period
Adjustment Statements and have not previously been turned
over to the
appropriate party in accordance with the Closing Period
Adjustment
Statements or (ii) during the period prior to the
Valuation Date.

(c) After the Closing, Enstar shall, immediately
upon its
receipt, turn over or cause to be turned over to Newstar
or UT
Development, as the case may be, (i) all amounts that
would be, but were
not, properly included in the Closing Period Adjustment
Statements
including applicable insurance proceeds, if any, that
relate to such
Closing Period and (ii) any amounts from the Transferred
Assets received
by Enstar, which amounts relate to the period after the
Closing Date
pursuant to the Letters in Lieu of Division and Transfer
Orders,
assignments or notices required pursuant to this
Agreement.

Section 9.9. Surety Bond Coverage. Ultramar shall
use its best
efforts to obtain as soon as reasonably practicable after the
Closing
replacement surety bonds for Newstar obtaining the release of
UTPC and Enstar.
Ultramar agrees to indemnify and hold harmless UTPC against and
from any loss,
cost or expense incurred or suffered by UTPC or Enstar arising
out of any claim
and premium payment related to UTPC's or Enstar's maintenance of
such surety
bonds for Newstar after the Closing Date.

Section 9.10. Confidentiality. After the Closing
or termination
of this Agreement, the parties hereto shall continue to hold in
confidence all
information and data concerning the Transferred Assets no longer
owned by such
party or its affiliates (other than information and data that
becomes generally
available to the public other than through disclosure by any of
the parties
hereto or their officers, employees or representatives),
including without
limitation, seismic data pursuant to the terms of the Seismic
Agreement;
provided, however, the foregoing shall not restrict necessary
disclosures in
compliance with applicable securities laws or other laws or an
order by court
or governmental agency. The aforesaid obligation shall terminate
at such time
as the information and data in question become generally
available to the
public other than through the breach by any of the parties hereto
or its
affiliates, officers, employees or representatives of said
obligation.

-20-

Section 9.11. Severance. Enstar shall only be
responsible for
all payments and liabilities from the severance of ten employees
designated by
UTPC who are not offered continuation of employment with UTPC or
its
affiliates; provided, the aggregate costs of such severance
payments by Enstar
shall not exceed $300,000.

Section 9.12. Captions. The captions in this
Agreement are for
convenience only and shall not be considered a part of or affect
the
construction or interpretation of any provision of this
Agreement.

Section 9.13. Governing Law. THIS AGREEMENT AND
THE LEGAL
RELATIONS BETWEEN THE PARTIES SHALL BE GOVERNED BY AND
CONSTRUED
IN ACCORDANCE
WITH THE LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS
OF LAWS OTHERWISE APPLICABLE TO SUCH DETERMINATION. NOTHING
HEREIN SHALL
AFFECT THE RIGHT OF ANY PARTY HERETO TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE
PROCEED AGAINST ANY OTHER PARTY IN ANY OTHER JURISDICTION.

Section 9.14. Waivers. Any failure of any party or
parties to
comply with any of its or their obligations, agreements or
conditions herein
contained may be waived in writing, but not in any other manner,
by the party
or parties to whom such compliance is owed. No waiver of, or
consent to a
change in, any of the provisions of this Agreement shall be
deemed or shall
constitute a waiver of, or consent to a change in, other
provisions hereof
(whether or not similar), nor shall such waiver constitute a
continuing waiver
unless otherwise expressly provided.

Section 9.15. Acknowledgement. WITHOUT DIMINISHING
THE SCOPE OF
THE EXPRESS REPRESENTATIONS, WARRANTIES AND COVENANTS OF UNIMAR,
ULTRASTAR,
UNISTAR, ENSTAR, NEWSTAR, UT DEVELOPMENT AND UTPC IN THIS
AGREEMENT AND WITHOUT
AFFECTING OR IMPAIRING THE PARTIES' HERETO RIGHTS TO RELY
THEREON, THE PARTIES
HERETO ACKNOWLEDGE THAT NONE OF SUCH PARTIES HAS MADE, AND
UNIMAR
HEREBY
EXPRESSLY DISCLAIMS AND NEGATES, ANY OTHER REPRESENTATION OR
WARRANTY, EXPRESS
OR IMPLIED, RELATING TO THE CONDITION OF THE ASSETS AND
OPERATIONS OF ENSTAR,
THE SUBSIDIARIES AND THE PARTNERSHIPS (INCLUDING, WITHOUT
LIMITATION, ANY
IMPLIED OR EXPRESS WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR
PURPOSE) AND TO THE RESERVE REPORT BY WILLIAMSON DATED MARCH 31,
1989 EFFECTIVE
AS OF DECEMBER 31, 1988, THE EXISTENCE OR EXTENT OF OWNERSHIP,
TITLE,
RECOVERABILITY OR VALUES OF RESERVES SHOWN THEREIN OR PRODUCT
PRICING
ASSUMPTIONS, GEOLOGICAL, GEOPHYSICAL OR SEISMIC DATA USED
THEREIN, AND FURTHER,
THE PARTIES HERETO ACCEPT ALL THE PROPERTY OF ENSTAR IN ITS "AS
IS," "WHERE IS"
CONDITION.

Section 9.16. Files and Records. After the Closing
Date, the
parties hereto agree that upon a reasonable request each party
shall make
available to the other parties during reasonable times and at
such requesting
party's expense, for review and copying necessary information to
which it has
access without violating confidentiality provisions with respect
to (a)

-21-

federal, local or state regulatory or tax matters, (b) resolution
of existing
disputes or contract compliance issues relating to the
Transferred Assets, (c)
matters relating to this Agreement or (d) other matters or
disputes relating to
Unimar's, Enstar's or their affiliates' prior ownership of or
liability with
respect to the Transferred Assets. The parties hereto agree that
after the
Closing Date they will hold in strict confidence and not disclose
to anyone
other than their respective officers, employees and
representatives, and to
other persons as required in connection with the foregoing uses,
any
information and data concerning the Transferred Assets unless
such information
and data is generally available to the public other than through
disclosure by
such party or is required to be disclosed under applicable
securities or other
laws or order by court or governmental agency.

Section 9.17. Equitable Remedy. The parties hereto
agree that
money damages would not be a sufficient remedy for any breach of
Sections 2.3,
2.4, 2.7, 2.8, 9.10 or 9.16 of this Agreement and that each such
party shall be
entitled to equitable relief, including injunction and specific
performance, in
the event of any breach of any of those Sections, in addition to
all other
remedies available at law or in equity.

Section 9.18. Severability. If any provision of
this Agreement
is invalid, illegal or unenforceable, the remainder of this
Agreement shall
remain in full force and effect.

Section 9.19. Entire Agreement. This Agreement,
including the
Exhibits and Schedules annexed hereto, constitutes the entire
agreement among
the parties hereto.

Section 9.20. Conflict. In the event that after
the Closing
there shall be any conflict between the provisions of this
Agreement and the
Related Agreements, the provisions of the Related Agreements
shall control.

IN WITNESS WHEREOF, this Agreement has been signed
by a duly
authorized officer of each of the parties hereto, all as of the
date first
above written.

UNIMAR COMPANY

By: Unistar, Inc., a
General Partner

By: /s/W.M. KRIPS

- -------------------------
Name: W.M. KRIPS

Title: President

By: Ultrastar, Inc., a
General Partner

By: /s/R.W. BLAND

- --------------------------
Name: R.W. BLAND

Title: Senior Vice
President

-22-

UNISTAR, INC.

By: /s/W.M. KRIPS

- ---------------------------------
Name: W.M. KRIPS

Title: President

ULTRASTAR, INC.

By: /s/R.W. BLAND

- ---------------------------------
Name: R.W. BLAND

Title: Senior Vice
President

ENSTAR CORPORATION

By: /s/R.W. BLAND

- --------------------------------
Name: R.W. BLAND

Title: President

NEWSTAR INC.

By: /s/R.W. BLAND

- -------------------------------
Name: R.W. BLAND

Title: President

UNION TEXAS
DEVELOPMENT
CORPORATION

By: /s/W.M. KRIPS

- ------------------------------
Name: W.M. KRIPS

Title: President

UNION TEXAS PETROLEUM
CORPORATION

By: /s/W.M. KRIPS

- ------------------------------
Name: W.M. KRIPS

Title: Senior Vice
President

ULTRAMAR AMERICA
LIMITED

By: /s/R.W. BLAND

- -----------------------------
Name: R.W. BLAND

Title: Vice President

-23-

List of omitted Exhibits and Schedules to Agreement and Plan of
Reorganization
dated December 22, 1989 among Unimar Company, Ultrastar, Inc.,
Unistar, Inc.,
ENSTAR Corporation, Newstar, Inc., Union Texas Development
Corporation, Union
Texas Petroleum Corporation and Ultramar America Limited.

<TABLE>
<CAPTION>
EXHIBITS DESCRIPTION
<S> <C>
Exhibit A Assets Conveyed to UT Development
Exhibit B Assets Conveyed to Newco
Exhibit C Form of Conveyance
Exhibit D Intentionally omitted
Exhibit E Transition Space and Services Agreement
Exhibit F Enstar Discharge Agreement
Exhibit G Assumption and Indemnification Agreement
Exhibit H Marketing Agreement
Exhibit I IRS Request
Exhibit J Partnership Amendment
Exhibit K Termination Agreement
Exhibit L Amended 1985 Agreement
Exhibit M Amended 1987 Agreement
Exhibit N Assignments
Exhibit O Seismic Agreement
</TABLE>

<TABLE>
<CAPTION>
SCHEDULES DESCRIPTION
<S> <C>
Schedule 1.5 Estimated Closing Schedule
Schedule 3.3(f) Litigation and Claims
Schedule 3.3(g) Makeup
Schedule 3.3(h) Gas and Oil Balancing
Schedule 9.7 Closing Period Adjustments Schedule
</TABLE>

AMENDED AND RESTATED

PRODUCTION SHARING CONTRACT

Between

PERUSAHAAN PERTAMBANGAN MINYAK DAN GAS BUMI NEGARA

(PERTAMINA)

And

ROY M. HUFFINGTON, INC.,

VIRGINIA INTERNATIONAL COMPANY,

VIRGINIA INDONESIA COMPANY,

ULTRAMAR INDONESIA LIMITED,

UNION TEXAS EAST KALIMANTAN LIMITED,

UNIVERSE GAS & OIL COMPANY, INC., and

HUFFINGTON CORPORATION

<PAGE>

AMENDED AND RESTATED
PRODUCTION SHARING CONTRACT
between
PERTAMINA AND VICO, ET AL
(effective August 8, 1968-August 7, 1998)<PAGE>

CONTENTS

Section Page

I Scope and Definitions 2

II Term 4

III Exclusion of Areas 4

IV Work Program and Expenditures 5

V Rights and Obligations of the Parties 6

VI Recovery of Investment Credit and
Operating Costs and Handling of Production 11

VII Valuation of Crude Oil and Natural Gas 14

VIII Compensation and Production Bonuses 17

IX Payments and Currency 17

X Title to Equipment 18

XI Consultation and Arbitration 19

XII Employment and Training of Indonesian Personnel 19

XIII Termination 19

XIV Books and Accounts and Audits 19

XV Other Provisions 20

XVI Effectiveness 22

Exhibit "A": Map of Contract Area A-1

Exhibit "B": Description of Contract Area B-1

Exhibit "C": Accounting Procedure C-1
<PAGE>
AMENDED AND RESTATED

PRODUCTION SHARING CONTRACT

THIS AMENDED AND RESTATED PRODUCTION SHARING CONTRACT (this
"Contract"), is made and entered into in Jakarta, Indonesia, on
this ..... day of ...................., 1990, by and between PERUSAHAAN
PERTAMBANGAN MINYAK DAN GAS BUMI NEGARA, a State Enterprise,
established on the basis of Law No. 8/1971 ("Pertamina"), party of
the first part, and ROY M. HUFFINGTON, INC., a Delaware, USA
corporation ("Huffco"), VIRGINIA INTERNATIONAL COMPANY, a Delaware,
USA corporation ("Virginia"), VIRGINIA INDONESIA COMPANY, a Nevada,
USA corporation, ULTRAMAR INDONESIA LIMITED, a Bermuda corporation,
UNION TEXAS EAST KALIMANTAN LIMITED, a Bahamian corporation,
UNIVERSE GAS & OIL COMPANY, INC., a Liberian corporation, and
HUFFINGTON CORPORATION, a Delaware, USA corporation (all of which
are referred to herein collectively as "Contractors", and each
separately as "Contractor"), parties of the second part (Pertamina
and each Contractor being referred to herein either individually as
a "Party" or collectively as the "Parties");

WITNESSETH:

WHEREAS, P.N. Perusahaan Minyak Nasional ("Permina"),
predecessor to Pertamina, entered into a Production Sharing
Contract dated August 8, 1968 with Huffco and Virginia covering
certain lands in East Kalimantan and South Sumatra, Indonesia,
including the Contract Area, which Production Sharing Contract has
heretofore been amended by, inter alia, documents dated as of
January 1, 1978 and April 14, 1981 entered into by Pertamina and
Contractors, or their respective predecessors in interest (such
Production Sharing Contract, as so amended, being herein called the
"Original Production Sharing Contract"); and

WHEREAS, all of the interest of Huffco and Virginia in the
Original Production Sharing Contract is now held by Contractors;
and

WHEREAS, all lands described in and covered by the Original
Production Sharing Contract, other than the Contract Area, have
been relinquished from the effect thereof; and

WHEREAS, this Contract is due to expire at midnight on August
7, 1998, and contemporaneously herewith the Parties are entering
into a Production Sharing Contract (the "Renewed Production Sharing
Contract") covering the Contract Area, such Renewed Production
Sharing Contract to take effect immediately on the expiration of
this Contract; and

WHEREAS, all mineral oil and gas existing within the statutory
mining territory of the Republic of Indonesia are national riches
controlled by the State; and

WHEREAS, Pertamina has an exclusive "Authority to Mine" for
Petroleum in and throughout the area outlined on the map which is
Exhibit "A", which area is more particularly described in Exhibit
"B", each of which is attached hereto and made a part hereof,
which area is herein referred to as the "Contract Area"; and

WHEREAS, Pertamina wishes to promote the development of the
Contract Area, and Contractors desire to join and assist Pertamina
in accelerating the exploration and development of Petroleum which
has heretofore been discovered, together with the potential
resources within the Contract Area; and

WHEREAS, Contractors have the financial ability, technical
competence and skill necessary to carry out the Petroleum
Operations hereinafter described; and

WHEREAS, in accordance with Law No. 44 Prp/1960 and Law No.
8/1971, cooperative agreements in the form of a production sharing
contract may be entered into in the sector of oil and gas between
Pertamina and foreign capital investors;

WHEREAS, the Parties desire to amend the terms of the Original
Production Sharing Contract in certain respects and to incorporate
such amendments, as well as all prior amendments, into this
Contract, which will affirm and define the rights and obligations
of the Parties with respect to the exploration, development,
production and export of hydrocarbons from the Contract Area from
the Effective Date through the remainder of the term originally
stated therein (i.e., through August 7, 1998) and will, as of the
Effective Date, supersede and replace the Original Production
Sharing Contract;

NOW, THEREFORE, for and in consideration of the mutual
promises, covenants and conditions hereinafter contained, it is
hereby agreed as follows:

SECTION I

SCOPE AND DEFINITIONS

1.1 SCOPE

This Contract is a production sharing contract. In accordance
with the provisions herein contained, Pertamina shall have and be
responsible for the management of the operations contemplated
hereunder. Contractors shall be responsible to Pertamina for the
execution of such operations in accordance with the provisions of
this Contract and are hereby appointed and constituted the
exclusive companies to conduct Petroleum Operations. Contractors
shall provide all the financial and technical assistance required
for such operations. Contractors shall carry the risk of Operating
Costs required in carrying out operations and shall therefore have
an economic interest in the development of the Petroleum deposits
in the Contract Area. Such costs shall be included in Operating
Costs recoverable as provided in Section VI. Except as may
otherwise be provided in this Contract, in the Accounting Procedure
attached hereto or by written agreement of Pertamina, Contractors
will not incur interest expenses to finance their operations
hereunder. During the term of this Contract the total production
achieved in the conduct of such operations shall be divided in
accordance with the provisions of Section VI hereof.

1.2 DEFINITIONS

In the text of this Contract, the Words and Terms defined in
Article 1 of Law No. 44 Prp/1960 shall have the same meaning in
accordance with such definitions. In addition the following terms
shall be defined as set forth below:

Affiliated Company or Affiliate means, as to each Party to
this Contract, a company or other entity that controls or is
controlled by such Party or a company or other entity which
controls or is controlled by a company or other entity which
controls such Party, it being understood that control shall mean
ownership by one company or entity of at least fifty per cent (50%)
of (a) the voting stock, if the other company is a corporation
issuing stock, or (b) the controlling rights or interests, if the
other entity is not a corporation.

Barrel means a quantity or unit of oil, forty-two (42) United
States gallons at the temperature of sixty degrees (60o)
Fahrenheit.

Budget of Operating Costs means cost estimate of all items
included in the Work Program.

Calendar Year or Year means a period of twelve (12) months
commencing with January 1 and ending on the following December 31
according to the Gregorian Calendar.

Contract Area means the Area within the statutory mining
territory of Indonesia covered by the "Authority to Mine" which is
the subject of this Contract, which Contract Area is outlined and
described in Exhibits "A" and "B" attached hereto and made a part
hereof.

Contract Year means a period of twelve (12) consecutive months
according to the Gregorian Calendar counted from the Effective Date
of this Contract or from the anniversary of such Effective Date.

Crude Oil means crude mineral oil, asphalt, ozokerite and all
kinds of hydrocarbons and bitumens, both in solid and in liquid
form, in their natural state or obtained from Natural Gas by
condensation or extraction.

Effective Date means the date that both this Contract and the
Renewed Production Sharing Contract are approved by the Government
of the Republic of Indonesia in accordance with the provisions of
applicable law.

First Tranche Petroleum shall have the meaning set forth in
Section 6.3.1.

Force Majeure means delays or defaults in performance under
this Contract caused by circumstances beyond the control and
without the fault or negligence of Contractors and/or Pertamina
that may affect economically or otherwise the continuing of
operations under this Contract, including but not restricted to
acts of God or the public enemy, perils of navigation, fire, flood,
hostilities, war (declared or undeclared), blockade, labor
disturbances, strikes, riots, insurrections, civil commotion,
quarantine restrictions, epidemics, storms, earthquake or
accidents.

Foreign Exchange means currency other than that of the
Republic of Indonesia but acceptable to Pertamina and to the
Republic of Indonesia and to Contractors.

Investment Credit means the investment credit provided for in
Section 6.1.7 of this Contract.

Natural Gas means all gaseous hydrocarbons produced from
wells, including wet mineral gas, dry mineral gas, casinghead gas
and residue gas remaining after the extraction of liquid
hydrocarbons from wet gas.

Operating Costs means the expenditures made and obligations
incurred in carrying out Petroleum Operations hereunder determined
in accordance with the Accounting Procedure attached hereto and
made a part hereof as Exhibit "C".

Petroleum means mineral oil and gas, herein called Crude Oil
and Natural Gas, as defined in this Contract and in Law No. 44
Prp/1960.

Petroleum Operations means all exploration, development,
extraction, producing, transportation, marketing and other
operations authorized or contemplated under this Contract.

Work Program means a statement itemizing the Petroleum
Operations to be carried out in the Contract Area as set forth in
Section IV.

SECTION II

TERM

2.1.1 The term of this Contract shall be thirty (30)
years as from August 8, 1968, and as of the Effective Date this
Contract shall replace and supersede the Original Production
Sharing Contract.

2.1.2 On the date of execution hereof Pertamina and
Contractors have entered into the Renewed Production Sharing
Contract covering the Contract Area, less such portions thereof
which may be relinquished during the term of this Contract, during
the period August 8, 1998 through August 7, 2018.

SECTION III

EXCLUSION OF AREAS

3.1.1 Contractors, having fulfilled their obligations
under the Original Production Sharing Contract to relinquish
portions of the contract areas described therein, shall carry on
Petroleum Operations in the Contract Area as defined in this
Contract.

3.1.2 In addition to the relinquishments heretofore
made, it is agreed that the following additional surrenders of
portions of the Contract Area shall be made:

(a) By not later than the first anniversary of the
Effective Date Contractors shall surrender an
area equal to ten percent (10%) of the
Contract Area;

(b) By not later than the fourth anniversary of
the Effective Date Contractors shall surrender
an additional area equal to ten percent (10%)
of the Contract Area; and

(c) By not later than August 7, 1998 Contractors
shall surrender an additional area equal to
ten percent (10%) of the Contract Area;

provided, however, that the foregoing provisions shall not require
Contractors to surrender any portion of the Contract Area
corresponding to the surface area of any field in which Petroleum
has been discovered.

3.1.3 Upon thirty (30) days' written notice to Pertamina prior
to the end of any Calendar Year, Contractor shall have the right to
surrender any portion of the Contract Area, and such portion shall
then be credited against that portion of the Contract Area which
Contractors are next required to surrender under the provisions of
Section 3.1.2.

SECTION IV

WORK PROGRAM AND EXPENDITURES

4.1.1 Contractors, in conducting exploration operations under
the Original Production Sharing Contract, have complied with the
provisions respecting minimum expenditures set forth in Section 4.2
thereof. Further, Contractors have submitted and Pertamina has
approved Work Programs for each Calendar Year through 1990, and
such Work Programs through Calendar Year 1989 have been conducted
in accordance with the Original Production Sharing Contract.

4.1.2 At least three (3) months prior to the beginning of each
Calendar Year, or at such other times as otherwise mutually agreed
by the Parties, Contractors shall prepare and submit for approval
to Pertamina a Work Program and Budget of Operating Costs for the
Contract Area setting forth the Petroleum Operations which
Contractors propose to carry out during the ensuing Calendar Year.

4.1.3 Should Pertamina wish to propose a revision as to certain
specific features of said Work Program and Budget of Operating
Costs, it shall within thirty (30) days after receipt thereof so
notify Contractors specifying in reasonable details its reasons
therefor. Promptly thereafter, the Parties will meet and endeavor
to agree on the revisions proposed by Pertamina. In any event, any
portion of the Work Program as to which Pertamina has not proposed
a revision shall insofar as possible be carried out as prescribed
herein.

4.1.4 It is recognized by the Parties that the details of a
Work Program may require changes in the light of existing
circumstances, and nothing herein contained shall limit the right
of Contractors to make such changes, provided they do not change
the general objective of the Work Program nor increase the
expenditures in the approved Budget of Operating Costs.

4.1.5 It is further recognized that in the event of emergency
or extraordinary circumstances requiring immediate action, any
Party may take all actions it deems proper or advisable to protect
its interests and those of its respective employees, and any cost
so incurred shall be included in the Operating Costs.

4.1.6 Pertamina agrees that the approval of a proposed Work
Program and Budget of Operating Costs will not be unreasonably
withheld.

4.1.7 The amount to be spent by Contractors in conducting
further exploration operations, including delineation drilling,
pursuant to this Contract in each of the six (6) Calendar Years
commencing with Calendar Year 1990 shall be not less than the
amount set forth opposite each such Year as follows:

CALENDAR YEAR EXPLORATION EXPENDITURE

1990 US$ 19,000,000
1991 12,000,000
1992 6,000,000
1993 6,000,000
1994 6,000,000
1995 6,000,000

All Operating Costs incurred by Contractors from and after January
1, 1990 for exploration operations hereunder shall be credited
against the amounts referred to above. If during any Calendar Year
Contractors should spend less than the amount of money required to
be so expended, an amount equal to such under expenditure may, with
Pertamina's consent, be carried forward and added to the amount to
be expended in the following Calendar Year without prejudice to
Contractors' rights hereunder. If during any Calendar Year
Contractors should expend more than the amount of money required to
be so expended, the excess may be subtracted from the amount of
money to be so expended by Contractors during the succeeding
Calendar Year or Years.

SECTION V

RIGHTS AND OBLIGATIONS OF THE PARTIES

5.1.1 Subject to Sections 5.1.2(f), (g) and (h):

5.1.2 Contractors shall:

(a) Advance all necessary funds and purchase or lease all
material, equipment and supplies required to be purchased or
leased with Foreign Exchange pursuant to the Work Program.

(b) Furnish all technical aid, including foreign personnel,
required for the performance of the Work Program, payment
whereof requires Foreign Exchange.

(c) Furnish such other funds for the performance of the Work
Program that requires payment in Foreign Exchange including
payment to foreign third parties who perform services as a
contractor.

(d) Be responsible for the preparation and execution of the Work
Program, which shall be implemented in a workmanlike manner
and by appropriate scientific methods; and Contractors shall
take the necessary precautions for protection of navigation
and fishing and shall prevent extensive pollution of the sea
or rivers. It is also understood that the execution of the
Work Program shall be exercised so as not to conflict with
obligations imposed on the Government of Indonesia by
International Law.

(e) Retain control to all leased property paid for with Foreign
Exchange and brought into Indonesia and be entitled to freely
remove same therefrom.

(f) Each Contractor shall have the right to sell, assign,
transfer, convey or otherwise dispose of all its rights and
interests under this Contract to any Affiliated Company
without the prior written consent of Pertamina, provided that
Pertamina shall be notified in writing of the same beforehand
and further provided that any assignee to which such rights
and interests are assigned shall not hold more than one
Production Sharing Contract.

(g) Each Contractor shall have the right to sell, assign,
transfer, convey or otherwise dispose of any part of its
rights and interests under this Contract undividedly to
parties other than Affiliated Companies with the prior written
consent of Pertamina, which consent shall not be unreasonably
withheld.

(h) Each Contractor shall have the right to sell, assign,
transfer, convey or otherwise dispose of all of its rights and
interests under this Contract undividedly to parties other
than Affiliated Companies with the prior written consent of
Pertamina and the Government of the Republic of Indonesia,
which consent shall not be unreasonably withheld.

(i) Have the right of ingress to and egress from the Contract Area
and to and from facilities wherever located at all times.

(j) Have the right to use and have access to, and Pertamina shall
furnish, all geological, geophysical, drilling, well,
production and other information held by Pertamina or by any
other governmental agency or enterprise relating to the
Contract Area, including well location maps.

(k) Have the right to use and have access to, and Pertamina shall
make available so far as possible, all geological,
geophysical, drilling, well, production and other information
now or in the future held by it or by any other governmental
agency or enterprise relating to the areas adjacent to the
Contract Area.

(l) Submit to Pertamina copies of all such original geological,
geophysical, drilling, well, production and other data and
reports as may be compiled during the term hereof.

(m) Prepare and carry out plans and programs for industrial
training and education of Indonesians for all job
classifications with respect to operations contemplated
hereunder, as provided in Section XII hereof.

(n) Each Contractor shall have the right during the term hereof
to freely lift, dispose of and export its share of Petroleum
and retain abroad the proceeds obtained therefrom.

(o) Appoint an authorized representative for Indonesia with
respect to this Contract, who shall have an office in Jakarta.

(p) After commercial production commences, fulfill their
obligation towards the supply of the domestic market in
Indonesia. Contractors agree to sell and deliver to Pertamina
a portion of the share of the Crude Oil to which they are
entitled pursuant to Sections 6.1.3 and 6.3.1 calculated for
each Year as follows:

(i) multiply the total quantity of Crude Oil produced from
the Contract Area by a fraction, the numerator of which
is the total quantity of Crude Oil to be supplied and
the denominator of which is the entire Indonesian
production of Crude Oil of all petroleum companies;
(ii) compute twenty-five percent (25%) of the total
quantity of Crude Oil produced from the Contract
Area; and

(iii) multiply the lower quantity computed either under (i)
or (ii) by the resultant percentage of Contractors'
entitlement as applicable under Section 6.1.3 from
the Crude Oil remaining after deducting Operating
Costs.

The quantity of Crude Oil computed under (iii) shall be the
maximum quantity to be supplied by Contractors in any Year
pursuant to this paragraph, and deficiencies, if any, shall
not be carried forward to any subsequent Year; provided, that
if for any Year the recoverable Operating Costs exceed the
difference of total sales proceeds from Crude Oil produced and
saved hereunder minus First Tranche Petroleum under Section
6.3.1 and Investment Credit under Section 6.1.7, Contractors
shall be relieved from this supply obligation for such Year.

(q) The price at which such Crude Oil shall be delivered and sold
under Section 5.1.2(p) shall be 20 US cents per Barrel f.o.b.
point of export with respect to Crude Oil from fields
commencing production prior to February 23, 1989, and ten
percent (10%) of the price determined under Section 6.1.2 with
respect to Crude Oil from fields commencing production from
and after such date. Contractors shall not be obligated to
transport such Crude Oil beyond the point of export, but upon
request Contractors shall assist in arranging transportation
and such assistance shall be without cost or risk to
Contractors. Notwithstanding the foregoing, for a period of
five (5) consecutive years (meaning sixty (60) consecutive
months) starting the month of the first delivery of Crude Oil
produced and saved from each new field in the Contract Area,
the fee per Barrel for the quantity of Crude Oil supplied to
the domestic market from each such new field shall be equal
to the price determined in accordance with Section VI for
Crude Oil from such field taken for the recovery of Operating
Costs. The proceeds in excess of the aforesaid 20 US cents
per Barrel or ten percent (10%) of the price under Section
6.1.2, whichever is applicable, shall preferably be used to
assist financing of continued exploration efforts by
Contractors in the Contract Area or in other areas of the
Republic of Indonesia if such opportunity exists. In case no
such opportunity can be demonstrated to exist in accordance
with good oil field practice, Contractors shall be free to use
such proceeds at their own discretion.

(r) Give preference to such goods and services which are produced
in Indonesia or rendered by Indonesian nationals, provided
such goods and services are offered at equally advantageous
conditions with regard to quality, price, availability at the
time and in the quantities required.

(s) Each Contractor shall pay its Corporate Income Tax imposed by
the Government of the Republic of Indonesia pursuant to the
Corporation Tax Ordinance (1925), as amended, and to the
Interest, Dividends and Royalty Tax Law No. 12 (1959), as
amended, and Contractors shall comply with the laws and
regulations relating to the filing of returns, the payment of
tax and estimated taxes.

5.1.3 Pertamina shall:

(a) Have and be responsible for the management of the operations
contemplated hereunder; however, Pertamina shall assist and
consult with Contractors with a view to the fact that
Contractors are responsible for the Work Program.

(b) Except with respect to the obligation of each Contractor to
pay its Indonesian Corporate Income Tax and the Tax on
Interest, Dividends and Royalty as provided in Section
5.1.2(s), assume and discharge all other Indonesian taxes of
Contractors, including value added taxes, transfer taxes,
import and export duties on materials, equipment and supplies
brought into or taken out of Indonesia by Contractors, their
contractors or subcontractors, and exactions in respect of
property, capital, net worth, operations, remittances or
transactions including any tax or levy on or in connection
with operations performed hereunder by Contractors. Pertamina
shall not be obliged to pay the Indonesian Corporate Income
Tax or the tax on Interest, Dividends and Royalty of
Contractors, nor taxes on tobaccos, liquor and personnel
income tax, nor income tax or other taxes not listed above of
contractors and subcontractors. The obligations of Pertamina
hereunder shall be deemed to have been complied with by the
delivery to Contractors, within one hundred and twenty (120)
days after the end of each Calendar Year, of documentary proof
in accordance with the Indonesian fiscal laws that liability
for the above-mentioned taxes has been satisfied, except that
with respect to any of such liabilities which Contractors may
be obliged to pay directly, Pertamina shall reimburse
Contractors only out of its share of production hereunder
within sixty (60) days after receipt of invoice therefor.
Pertamina should be consulted prior to payment of such taxes
by Contractors or by any other party on Contractors' behalf.

(c) Otherwise assist and expedite Contractors' execution of the
Work Program by providing facilities, supplies and personnel,
including but not limited to supplying or otherwise making
available all necessary visas, work permits, transportation,
security protection and rights of way and easements as may be
requested by Contractors and made available from the resources
under Pertamina's control. In the event such facilities,
supplies or personnel are not readily available, then
Pertamina shall promptly secure the use of such facilities,
supplies and personnel from alternative sources. Expenses
thus incurred by Pertamina at Contractors' request shall be
reimbursed to Pertamina by Contractors and included in the
Operating Costs. Such reimbursements will be made in United
States Dollars computed at the rate of exchange extended by
the Indonesian Government to Petroleum companies at the time
of conversion. Contractors shall advance to Pertamina before
the beginning of each annual Work Program a minimum amount of
Seventy-five Thousand US Dollars (US $75,000) for the purpose
of enabling Pertamina to meet rupiah expenditures incurred
pursuant to this Section 5.1.3(c). If at any time during the
annual Work Program period the minimum amount advanced under
this Section 5.1.3(c) has been fully expended, separate
additional advance payments as may be necessary to provide for
rupiah expenses estimated to be incurred by Pertamina during
the balance of such annual Work Program period will be made.
If any amount advanced hereunder is not expended by Pertamina
by the end of an annual Work Program period, such unexpended
amount shall be credited against the minimum amount to be
advanced pursuant to this Section 5.1.3(c) for the succeeding
annual Work Program period.

(d) Ensure that at all times during the term hereof sufficient
rupiah funds shall be available to cover the rupiah
expenditures necessary for the execution of the Work Program.

(e) Have title to all original data resulting from Petroleum
Operations, including but not limited to geological,
geophysical, petrophysical, engineering, well logs and
completion, status reports and any other data as Contractors
may compile during the term hereof; provided, however, that
all such data shall not be disclosed to third parties without
informing Contractors and giving Contractors the opportunity
to discuss the disclosure of such data if Contractors so
desire, and further provided that Contractors may retain
copies of such data.

(f) To the extent that it does not interfere with Contractors'
performance of the Petroleum Operations, use the equipment
which becomes its property by virtue of this Contract solely
for the Petroleum Operations envisaged under this Contract;
and if Pertamina wishes to use such equipment for any
alternative purpose, then Pertamina shall first consult
Contractors.

SECTION VI

RECOVERY OF INVESTMENT CREDIT AND OPERATING

COSTS AND HANDLING OF PRODUCTION

6.1 CRUDE OIL

6.1.1 Contractors are authorized by Pertamina and obligated
to market all Crude Oil produced and saved from the Contract Area
subject to the provisions hereinafter set forth.

6.1.2 Contractors will recover all Operating Costs out of the
sales proceeds or other disposition of the required quantity of
Crude Oil equal in value to such Operating Costs which is produced
and saved hereunder and not used in Petroleum Operations. Except
as provided in Sections 7.1.1(d) and (e), Contractors shall be
entitled to take and receive and freely export such Crude Oil. For
purposes of determining the quantity of Crude Oil delivered to
Contractors required to recover said Operating Costs, the weighted
average price of all Crude Oil produced and sold from the Contract
Area during the Calendar Year will be used, excluding, however,
deliveries made pursuant to Section 5.1.2(p). If, in any Calendar
Year, the Operating Costs recoverable exceed the value of the Crude
Oil produced and saved hereunder and not used in Petroleum
Operations, then the unrecovered excess shall be recovered in
succeeding Years.

6.1.3 Of the Crude Oil remaining after deducting Operating
Costs:

(a) For Crude Oil production as a result of tertiary
recovery EOR projects, the Parties shall be entitled to
take and receive each Year, respectively, 54.5455% for
Pertamina and 45.4545% for Contractors. Tertiary
recovery EOR production represents a separate segment
from the others.

(b) For Crude Oil production from pre-Tertiary reservoir
rocks, the Parties shall be entitled to take and
receive each Year as follows:

(i) Pertamina 54.5455% and Contractors 45.4545%
for the segment of 0 to 50,000 Barrels daily
average of all of such pre-Tertiary production
of the Contract Area for the Year;

(ii) Pertamina 65.9091% and Contractors 34.0909%
for the segment of 50,001 Barrels to 150,000
Barrels daily average of all of such
pre-Tertiary production of the Contract Area
for the Year; and

(iii) Pertamina 77.2727% and Contractors 22.7273%
for the segment of 150,001 Barrels daily
average of all of such pre-Tertiary production
of the Contract Area for the Year and more.

Pre-Tertiary reservoir rocks mean petroleum reservoir
rocks deposited or formed in pre-Tertiary times.

(c) For Crude Oil production of the Contract Area other
than those under Sections 6.1.3(a) and (b) above, each
year Pertamina shall be entitled to take and receive
65.9091% and Contractors shall be entitled to take and
receive 34.0909%. Crude Oil under this Section
6.1.3(c) represents a separate segment from the others.

The deduction of Operating Costs before the entitlements are taken
by each respective Party as provided under this Section 6.1.3 shall
be subject to the following proration method: for each Year, the
recoverable Operating Costs shall be apportioned for deduction from
the production of each of the segments as hereinabove defined at
the same ratios as the production from each such segment over the
total production of such Year.

6.1.4 Title to Contractors' portion of Crude Oil under
Sections 6.1.3, 6.1.7 and 6.3.1, as well as to such portion of
Crude Oil exported and sold to recover Operating Costs and
Investment Credit, shall pass to Contractors at the point of export
or, in the case of Crude Oil delivered to Pertamina pursuant to
Section 5.1.2(p) or otherwise, at the point of delivery.

6.1.5 Contractors will use their best reasonable efforts to
market the Crude Oil to the extent markets are available. Each
Party shall be entitled to take and receive its respective portion
in kind.

6.1.6 If Pertamina elects to take any part of its portion of
Crude Oil in kind, it shall so advise Contractors in writing not
less than ninety (90) days prior to the commencement of each
semester of each Calendar Year specifying the quantity which it
elects to take in kind, such notice to be effective for the ensuing
semester of such Calendar Year (provided, however, that such
election shall not interfere with the proper performance of any
Crude Oil sales agreement for Petroleum produced within the
Contract Area which a Contractor has executed prior to the notice
of such election). Failure to give such notice shall be
conclusively deemed to evidence the election not to take in kind.
Any sale of Pertamina's portion of Crude Oil shall not be for a
term of more than one (1) year (meaning twelve (12) consecutive
months) without Pertamina's consent.

6.1.7 Contractors may recover an investment credit (the
"Investment Credit") amounting to twenty percent (20%) of the
capital investment costs directly required for developing Crude Oil
production facilities (as defined in Article II, paragraph 3(c) of
the Accounting Procedure attached hereto as Exhibit "C") of each
new field out of deduction from gross production before recovering
Operating Costs, commencing in the earliest production Year or
Years before tax deduction (to be paid in advance in such
production Year when taken). The Investment Credit may be applied
to new secondary recovery and tertiary recovery EOR projects but is
not applicable to "interim production schemes" or further
investments to enhance production and reservoir drainage in excess
of what was contemplated in the original project as approved by
Pertamina.

6.2 NATURAL GAS

6.2.1 Any Natural Gas produced from the Contract Area, to the
extent not used in Petroleum Operations hereunder, may be flared if
the processing and utilization thereof is not economical. Such
flaring shall be permitted to the extent that gas is not required
to effectuate the maximum economic recovery of Petroleum by
secondary recovery operations, including repressuring and
recycling.

6.2.3 Natural Gas produced during each Year shall be divided
between Pertamina and Contractors in accordance with the following:

(a) Contractors will recover Operating Costs out of the
sales proceeds or other disposition of the required
quantity of Natural Gas equal in value to such
Operating Costs which is produced and saved hereunder
and not used in Petroleum Operations. Contractors
shall be entitled to take and receive and freely export
such Natural Gas. If, in any Calendar Year, the
Operating Costs exceed the value of the Natural Gas
produced and saved hereunder and not used in Petroleum
Operations, then the unrecovered excess shall be
recovered in succeeding Years.

(b) Of the Natural Gas and propane and butane fractions
extracted from Natural Gas but not spiked in Crude Oil
remaining after deducting Operating Costs associated
with Natural Gas operations as stipulated in Exhibit
"C", Pertamina shall be entitled to take and receive
20.4545% and Contractors shall be entitled to take and
receive 79.5455%.

6.2.4 In the event Contractors consider that the processing
and utilization of Natural Gas is not economical, then Pertamina
may choose to take and utilize such Natural Gas that would
otherwise be flared, all costs of taking and handling to be for the
sole account and risk of Pertamina.

6.3 FIRST TRANCHE PETROLEUM

6.3.1 Notwithstanding anything to the contrary elsewhere
contained in this Contract, the Parties shall be entitled to take
and receive in each Year twenty percent (20%) of all Petroleum
produced and saved in such Year ("First Tranche Petroleum") before
any allocation of Crude Oil or Natural Gas to Contractors for the
recovery of Investment Credit and Operating Costs as provided in
this Section VI. Such First Tranche Petroleum comprising Crude Oil
shall be shared between Pertamina and Contractors in accordance
with the sharing splits provided under Section 6.1.3, by
apportioning it, as applicable, to the respective production
segments as therein defined, at the same ratios as the production
from each segment over the total production of the Year. Such
First Tranche Petroleum comprising Natural Gas shall be shared
between Pertamina and Contractors in accordance with the sharing
split provided under Section 6.2.3(b).

SECTION VII

VALUATION OF CRUDE OIL AND NATURAL GAS

7.1.1 Crude Oil sold to third parties shall be valued as
follows:

(a) All Crude Oil taken by Contractors, including their
share and the share for the recovery of Operating
Costs, and sold to third parties shall be valued at the
net realized price f.o.b. Indonesia received by
Contractors for such Crude Oil.

(b) All of Pertamina's Crude Oil taken by Contractors and
sold to third parties shall be valued at the net
realized price f.o.b. Indonesia received by Contractors
for such Crude Oil.

(d) Subject to any existing Crude Oil sales agreement, if
a more favorable net realized price is available to
Pertamina for the Crude Oil referred to in Sections
7.1.1(a) and (b), except Contractors' share of Crude
Oil, then Pertamina shall so advise Contractors in
writing not less than ninety (90) days prior to the
commencement of the deliveries under Pertamina's
proposed sales contract. Forty-five (45) days prior to
the start of such deliveries, Contractors shall notify
Pertamina regarding Contractors' intention to meet the
more favorable net realized price in relation to the
quantity and period of delivery concerned in said
proposed sales contract. In the absence of such notice
Pertamina shall market said Crude Oil.

(e) Pertamina's marketing of such Crude Oil as referred to
in Section 7.1.1(d) shall continue until forty-five
(45) days after Pertamina's net realized price on said
Crude Oil becomes less favorable. Contractors'
obligation to market said Crude Oil shall not apply
until after Pertamina has given Contractors at least
forty-five (45) days advance notice of its desire to
discontinue such sales. As long as Pertamina is
marketing the Crude Oil referred to above, it shall
account to Contractors, on the basis of the more
favorable net realized price.

(f) Without prejudice to any of the provisions of Section
VI and Section VII, Contractors may at their option
transfer to Pertamina during any Calendar Year the
right to market any Crude Oil which is in excess of
Contractors' normal and contractual requirements,
provided that the price is not less than the net
realized price from the Contract Area. Pertamina's
request stating the quantity and expected loading date
must be submitted in writing at least thirty (30) days
prior to lifting said Crude Oil. Such lifting must not
interfere with Contractors' scheduled tanker movements.
Pertamina shall account to Contractors in respect of
any sale made by it hereunder.

(g) Pertamina shall have the option in any Year in which
the quantity of Petroleum to which it is entitled
pursuant to Sections 6.1.3, 6.2.3 and 6.3.1 hereof is
less than 50% of the total production, by ninety (90)
days' written notice in advance of that Year, to market
for the account of Contractors, at the price provided
for in Section VII hereof for the recovery of Operating
Costs, a quantity of Petroleum which together with
Pertamina's entitlement under Sections 6.1.3, 6.2.3 and
6.3.1 equals fifty percent (50%) of the total Petroleum
produced and saved from the Contract Area.

7.1.2 Crude Oil sold to other than third parties shall be
valued as follows:

(b) If no such third party sales have been made during such
period of time, then on the basis used to value
Indonesian Crude Oil of similar quality, grade and
gravity and taking into consideration any special
circumstances with respect to sales of such Indonesian
Crude Oil.

7.1.3 Third party sales referred to in this Section VII shall
mean sales by Contractors to purchasers independent of Contractors,
that is purchasers with whom (at the time the sale is made)
Contractors have no contractual interest involving directly or
indirectly any joint interest.

7.1.4 Commissions or brokerages incurred in connection with
sales to third parties, if any, shall not exceed the customary and
prevailing rate.

7.1.5 Natural Gas sold to third parties shall be valued at
the net realized price received therefor. With respect to Natural
Gas delivered from the Contract Area in support of Pertamina's
obligations under sales contracts with third parties, the Parties
have agreed in the past, and may agree in the future, that the net
realized price for such Natural Gas shall constitute the amounts
paid by the buyers under such sales contracts, less deductions for
costs of the trades incurred outside of this Contract (e.g., costs
of construction, including financing, and operation of the plant in
which such Natural Gas is processed, transportation costs from such
plant or the Contract Area, as may be applicable, to the point of
delivery of such Natural Gas under the sales contracts and other
costs agreed to by Pertamina and Contractors).

7.1.6 During each given Calendar Year, the handling of
production (i.e., the implementation of the provisions of Section
VI hereof) and the proceeds thereof shall be provisionally dealt
with on the basis of the relevant Work Program and Budget of
Operating Costs based upon estimates of quantities of Petroleum to
be produced, of internal consumption in Indonesia, of marketing
possibilities, of prices and other sale conditions as well as of
any other relevant factor. Within thirty (30) days after the end
of such Calendar Year, adjustments and cash settlements between the
Parties shall be made on the basis of the actual quantities,
amounts and prices involved, in order to comply with the provisions
of this Contract.

7.1.7 In the event Petroleum Operations involve the
segregation of Crude Oils of different quality and/or grade and if
the Parties do not otherwise mutually agree:

(a) Any and all provisions of this Contract concerning
valuation of Crude Oil shall separately apply to each
segregated Crude Oil; and

(b) Each Crude Oil produced and segregated in a given Year
shall contribute to:

(i) The "required quantity" of Crude Oil to which
the Parties are entitled in such Year pursuant
to Section 6.3.1;

(ii) The "required quantity" utilized in such Year
for the recovery of Investment Credit pursuant
to Section 6.1.7;

(iii) The "required quantity" utilized in such Year
for the recovery of Operating Costs pursuant
to Section 6.1.2 hereof;

(iv) The "required quantity" of Crude Oil to which
the Parties are entitled in such Year pursuant
to Section 6.1.3 hereof; and

(v) The "required quantity" of Crude Oil which
Contractors agree to sell and deliver in such
Year for domestic consumption in Indonesia
pursuant to Section 5.1.2(p) hereof, out of
the share of Crude Oil to which it is entitled
pursuant to Sections 6.1.3 and 6.3.1;

with quantities, each of which shall bear to the
respective "required quantity" (referred to in (i)
through (v) above) the same proportion as the quantity
of such Crude Oil produced and segregated in such given
Year bears to the total quantity of Crude Oil produced
in such Year from the Contract Area.

SECTION VIII

COMPENSATION AND PRODUCTION BONUSES

8.1.1 As consideration for Pertamina to enter into this
Contract and the Renewed Production Sharing Contract Contractors
shall pay to Pertamina the following bonuses:

(a) A signature bonus of US $10,000,000 shall be due thirty
(30) days after the date of execution hereof by all
parties.

(b) A production bonus of US $5,000,000 shall be due thirty
(30) days following the end of the month in which
cumulative production of Crude Oil from the Contract
Area (or, in the case of production from unitized
areas, deemed by the applicable unit agreement to be
from the Contract Area) first exceeds 185,000,000
Barrels.

8.1.2 The bonuses provided for in Section 8.1.1 shall be
borne solely by Contractors and shall not be included in or
recoverable as Operating Costs. It is acknowledged that (a) the
amounts of such bonus payments have been determined based on the
tax laws specified in Section 5.1.2(s), and (b) for Indonesian tax
purposes each such bonus payment shall be deductible from
Contractors' taxable income in respect of the Calendar Year in
which payment is made.

SECTION IX

PAYMENTS AND CURRENCY

9.1.1 All payments which this Contract obligates Contractors
to make to Pertamina or the Government of the Republic of Indonesia
shall be made in United States Dollars at a bank to be designated
by each of them and agreed upon by Bank Indonesia or, at
Contractors' election, other currencies acceptable to them, except
that Contractors may make such payments in Indonesian Rupiahs to
the extent that such currency is realized as a result of the sale
of Crude Oil, Natural Gas or Petroleum products, if any.

9.1.2 All payments due to a Contractor shall be made in
United States Dollars, or, at Pertamina's election, other
currencies acceptable to such Contractor, at a bank to be
designated by such Contractor.

9.1.3 Any payments required to be made pursuant to this
Contract shall be made within thirty (30) days following the end of
the month in which the obligation to make such payments occurs.

SECTION X

TITLE TO EQUIPMENT

10.1.1 Equipment purchased by Contractors pursuant to the
Work Program shall become the property of Pertamina (in case of
import, when landed at the Indonesian port of import) and will be
used in Petroleum Operations hereunder.

10.1.2 The provisions of Section 10.1.1 shall not apply to
leased equipment belonging to third parties who perform services as
a contractor. Any such leased equipment belonging to foreign third
parties may be freely exported from Indonesia.

SECTION XI

CONSULTATION AND ARBITRATION

11.1.1 Periodically, Pertamina and Contractors shall meet to
discuss the conduct of the Petroleum Operations envisaged under
this Contract and will make every effort to settle amicably any
problem arising therefrom.

11.1.2 Disputes, if any, arising between Pertamina and
Contractors relating to this Contract or the interpretation and
performance of any of the clauses of this Contract, and which
cannot be settled amicably, shall be submitted to the decision of
arbitration. Pertamina on the one hand and Contractors on the
other hand shall each appoint one (1) arbitrator and so advise the
other Party, and these two (2) arbitrators will appoint a third.
If either Party fails to appoint an arbitrator within thirty (30)
days after receipt of a written request to do so, such arbitrator
shall, at the request of the other Party, if the Parties do not
otherwise agree, be appointed by the President of the International
Chamber of Commerce. If the first two (2) arbitrators appointed as
aforesaid fail to agree on a third within thirty (30) days
following the appointment of the second arbitrator, the third
arbitrator shall, if the Parties do not otherwise agree, be
appointed, at the request of either Party, by the President of the
International Chamber of Commerce. If an arbitrator fails or is
unable to act, his successor will be appointed in the same manner
as the arbitrator whom he succeeds.

11.1.3 The decision of a majority of the arbitrators shall
be final and binding upon the Parties.

11.1.4 In the event the arbitrators are unable to reach a
decision, the dispute shall be referred to Indonesian Court of Law
for settlement.

11.1.5 Any arbitration proceedings hereunder shall be held
at such place as the parties may agree, but absent agreement shall
be held at Geneva, Switzerland. Except as provided in this
Section, arbitration shall be conducted in accordance with the
rules of arbitration of the International Chamber of Commerce.

SECTION XII

EMPLOYMENT AND TRAINING OF INDONESIAN PERSONNEL

12.1.1 Contractors agree to employ qualified Indonesian
personnel in their operations and, after commercial production
commences, will undertake the schooling and training of Indonesian
personnel for labor and staff positions, including administrative
and executive management positions. At such time Contractors shall
also consider with Pertamina a program of assistance for training
Pertamina's personnel.

12.1.2 Costs and expenses of training Indonesian personnel
for employment by Contractors shall be included in Operating Costs.
Costs and expenses for a program of training for Pertamina's
personnel shall be borne on a basis to be agreed by Pertamina and
Contractors.

SECTION XIII

TERMINATION

13.1.1 At any time, if in the opinion of Contractors
circumstances do not warrant continuation of the Petroleum
Operations, Contractors may by giving written notice to such effect
to Pertamina and after consultation with Pertamina relinquish their
rights and be relieved of their obligations pursuant to this
Contract, except such rights and obligations as relate to the
period prior to such relinquishment.

13.1.2 Either Party shall be entitled to terminate this
Contract in its entirety by ninety (90) days' written notice if a
major breach of contract is committed by the other Party, provided
that conclusive evidence thereof is proved by arbitration or a
final court decision as stipulated in Section XI.

SECTION XIV

BOOKS AND ACCOUNTS AND AUDITS

14.1 BOOKS AND ACCOUNTS

14.1.1 Subject to the requirements of Section 5.1.2(s),
Pertamina shall be responsible for keeping complete books and
accounts with the assistance of Contractors reflecting all
Operating Costs as well as monies received from the sale of Crude
Oil and Natural Gas, consistent with modern petroleum industry
practices and proceedings as described in Exhibit "C" attached
hereto. Should there be any inconsistency between the provisions
of this Contract and the provisions of Exhibit "C", then the
provisions of Section 6.1.2 of this Contract shall prevail. Until
such time that commercial production commences, however, Pertamina
delegates to Contractors its obligations to keep books and
accounts.

14.2 AUDITS

14.2.1 Contractors shall have the right to inspect and audit
Pertamina's books and accounts relating to this Contract for any
Calendar Year within the one (1) year period following the end of
such Calendar Year. Any such audit will be satisfied within twelve
(12) months after its commencement. Any exception must be made in
writing within sixty (60) days following the end of such audit, and
failure to give such written exception within such time shall
establish the correctness of Pertamina's books and accounts.

14.2.2 Pertamina and the Government of the Republic of
Indonesia shall have the right to inspect and audit Contractors'
books and accounts relating to this Contract for any Calendar Year
covered by this Contract. Any such audit will be satisfied within
twelve (12) months after its commencement. Any exception must be
made in writing within sixty (60) days following the completion of
such audit. In addition, Pertamina and the Government of the
Republic of Indonesia may require Contractors to engage their
independent accountants to examine, in accordance with generally
accepted auditing standards, Contractors' books and accounts
relating to this Contract for any Calendar Year or perform such
auditing procedures as deemed appropriate by Pertamina. A copy of
the independent accountant's report of any exceptions shall be
forwarded to Pertamina within sixty (60) days following the
completion of such audit.

SECTION XV

OTHER PROVISIONS

15.1 NOTICES

15.1.1 Any notices required or given by either Party to the
other shall be deemed to have been delivered when a properly
acknowledged receipt has been obtained from the receiving Party.
All such notices shall be addressed as follows:

If to Pertamina:

PERUSAHAAN PERTAMBANGAN MINYAK
DAN GAS BUMI NEGARA
(PERTAMINA)
Jalan Merdeka Timur 1-A
Jakarta, Indonesia

If to Contractors:

ROY M. HUFFINGTON, INC.
Jl. H. Rasuna Said
Kuningan Plaza, P.O. Box 2828
Jakarta Selatan, Indonesia

The Parties may substitute or change such addresses on written
notice thereof.

15.2 LAWS AND REGULATIONS

15.2.1 The laws of the Republic of Indonesia shall apply to
this Contract.

15.2.2 No term or provision of this Contract shall prevent
or limit the Government of the Republic of Indonesia from
exercising its inalienable rights.

15.3 SUSPENSION OF OBLIGATION

15.3.1 Any failure or delay on the part of Pertamina or
Contractors, or any of them, in the performance of their
obligations or duties under this Contract shall be excused if and
to the extent attributable to Force Majeure.

15.3.2 If operations are delayed, curtailed or prevented by
such causes, then the time for carrying out the obligations thereby
affected, the term of this Contract and all rights and obligations
hereunder shall be extended for a period equal to the period thus
involved.

15.3.3 The Party whose ability to perform its obligations is
so affected shall notify the other Party thereof in writing,
stating the cause, and both Pertamina and Contractors shall do all
reasonably within their power to remove such cause; provided, that
nothing herein contained shall require Pertamina or Contractors, or
any of them, to accede to the demands of labor unions or their
respective employees which either, as the case may be, considers
unreasonable.

15.4 PROCESSING OF PRODUCTS

15.4.1 Contractors shall be willing to consider entering
into another contract or loan agreement for the processing of
products derived from the Petroleum Operations hereunder, on
mutually agreeable terms.

15.4.2 Within the framework of the preceding principle,
Contractors would agree on the conditions stated below to have
refined in Indonesia 28.57% of the share of Crude Oil to which they
are entitled pursuant to Sections 6.1.3 and 6.3.1, and should no
refining capacity be available therefor, to set up a corresponding
refining capacity for that purpose. The conditions above referred
to are that:

(a) Pertamina has first requested Contractors thereto;

(b) Contractors' share of Crude Oil pursuant to Sections
6.1.3 and 6.3.1 hereof be not less than 175,000 Barrels
per day; and

(c) If refining capacity has to be erected, that the
setting up and use of such refining capacity be
economical in the judgment of the Parties.

15.4.3 It is further agreed that Contractors may in lieu of
setting up such refining capacity, but subject to the same
conditions, make an equivalent investment in another project
related to the Petroleum or petrochemical industries.

15.4.4 Petroleum to be delivered to such facilities would be
sold by Contractors at the net realized prices f.o.b. Indonesia
received by Contractors established pursuant to Section VII hereof
or at another mutually agreed price.

SECTION XVI

EFFECTIVENESS

16.1.1 This Contract shall come into effect on the Effective
Date.

16.1.2 This Contract shall not be annulled, amended or
modified in any respect except by the mutual consent in writing of
the Parties.

IN WITNESS WHEREOF, PERTAMINA AND CONTRACTORS have executed
this Contract, in quadruplicate and in the English language, as of
the day and year first above written.

PERUSAHAAN PERTAMBANGAN ROY M. HUFFINGTON INC.
MINYAK DAN GAS BUMI NEGARA
(PERTAMINA)

By: By:

VIRGINIA INTERNATIONAL COMPANY VIRGINIA INDONESIA COMPANY

By: /s/ By: /s/

ULTRAMAR INDONESIA LIMITED UNION TEXAS EAST KALIMANTAN
LIMITED

By: /s/ By: /s/

UNIVERSE GAS & OIL COMPANY, INC. HUFFINGTON CORPORATION

By: By:

APPROVED by the Minister of Mines and Energy this day
of 1990, on behalf of the Government of the Republic
of Indonesia.

/s/
<PAGE>
EXHIBIT "A"

[To be provided]

<PAGE>
EXHIBIT "B"

Attached to and made an integral part of the Contract between
Perusahaan Pertambangan Minyak dan Gas Bumi Negara (Pertamina) and
Roy M. Huffington, Inc., Virginia International Company, Virginia
Indonesia Company, Ultramar Indonesia Limited, Union Texas East
Kalimantan Limited, Universe Gas & Oil Company, Inc. and Huffington
Corporation ("Contractors").

1. CONTRACT AREA

1.1 The "Contract Area", as defined in Section 1.2 of the
Contract to which this Exhibit "B" is attached, means the area
outlined on Exhibit "A" to such Contract, which area is more
particularly described as follows:

Using the Greenwich Coordinate system, starting at point
"A", located at the intersection of the coastline at
high tide and coincidental with the Equator, proceed
Southwest following the coastline at high tide to point
"B", located at the intersection of the coastline at
high tide and 01o30'00" South latitude;

Thence, due West in a direct line coincidental with
01o30'00" South latitude to point "C", located at
116o21'16" East longitude and 01o30'00" South latitude;

Thence, Northeasterly in a direct line to point "D",
located at 116o30'04" East longitude and 01o21'15" South
latitude;

Thence, due East in a direct line coincidental with
01o21'15" South latitude to point "E", located at
116o32'30" East longitude and 01o21'15" South latitude;

Thence, Northeasterly in a direct line to point "F",
located at 116o39'14" East longitude and 01o13'38" South
latitude;

Thence, Northeasterly in a direct line to point "G",
located at 116o48'53" East longitude and 00o54'05" South
latitude;

Thence, Northwesterly in a direct line to point "H",
located at 116o42'47" East longitude and 00o35'53" South
latitude;

Thence, Northeasterly in a direct line to point "I",
located at 116o45'44" East longitude and 00o30'00" South
latitude;

Thence, due East in a direct line coincident with
00o30'00" South latitude to point "J", located at
116o51'13" East longitude and 00o30'00" South latitude;

Thence, Southeasterly in a direct line to point "K",
located at 116o53'49" East longitude and 00o36'00" South
latitude;

Thence, due East in a direct line coincident with
00o36'00" South latitude to point "L", located at
117o03'37" East longitude and 00o36'00" South latitude;

Thence, Northeasterly in a direct line to point "M",
located at 117o04'42" East longitude and 00o30'51" South
latitude;

Thence, due East in a direct line coincident with
00o30'51" South latitude to point "N", located at
117o09'13" East longitude and 00o30'51" South latitude;

Thence, Northeasterly in a direct line to point "O",
located at 117o10'53" East longitude and 00o21'49" South
latitude;

Thence, Northeasterly in a direct line to point "P",
located at 117o17'00" East longitude and 00o04'20" South
latitude;

Thence, due East in a direct line coincident with
00o04'20" South latitude to point "Q", located at
117o20'00" East longitude and 00o04'20" South latitude;

Thence, due North in a direct line coincident with
117o20'00" East longitude to point "R", located at
117o20'00" East longitude and the equator;

Thence, due East in a direct line coincident with the
equator to point "A", the point of beginning.

1.2 It is understood and agreed that within the Contract Area
where Pertamina had, prior to August 8, 1968, drilled, discovered
and established Natural Gas or other Petroleum reserves in fields
operated by it, Contractors shall have no interest in any of the
then known productive zones in these fields, and the same shall not
be part of the Contract Area. Such fields, including the depths of
such known productive zones, are described in Section 2 of this
Exhibit "B". Conversely, where Pertamina outside such fields had
no producing or shut-in reserves as of August 8, 1968 and where
Contractors may discover Natural Gas or other Petroleum,
Contractors shall be entitled to their share of such production at
any and all depths.

1.3 It is the intention and desire of both Parties to this
Contract to have Contractors also drill deep tests on selected
producing structures, and, where Contractors establish production
in deeper zones than those that were productive as of August 8,
1968, Contractors shall share in this new production in accordance
with the terms of this Contract. However, prior to drilling deeper
tests on such known producing structures, where Pertamina and
Contractors shall jointly decide it is desirable, Pertamina and
Contractors shall determine the depth of the lowest producing zone
in the field, and any new production discovered in formations or
beds below such lowest zone shall be jointly shared by Pertamina
and Contractors in accordance with the terms of this Contract.

2. EXCLUDED AREAS

The shallow producing fields as of August 8, 1968 reserved by
Pertamina in Section 1.2 of this Exhibit "B" are described by the
longitudinal and latitudinal coordinates of the corners of their
respective boundaries, with the depths reserved expressed in feet,
below. Except as otherwise noted, the boundary lines of such
fields are straight lines running from point to point.

Field Point Longitude Latitude

1. Klandasan- A 116o43'24" 01o15'45"
Wailawi B 116o46'22" 01o15'45"
C 116o57'22" 01o10'25"
D 116o57'22" 01o14'15"
E 116o50'02" 01o16'25"
F 116o46'02" 01o16'25"
G 116o45'42" 01o21'10"
H 116o43'24" 01o21'10"

The boundaries of the Klandasan-Wailawi fields between points D and
E and between points F and G follow the coast line at high tide of
the island of Kalimantan. The depth reserved for the Klandasan-
Wailawi field is 1,772 feet.

2. Samboja/Jembatan A 117o01'32" 00o59'30"
Bengkok B 117o02'32" 00o59'55"
C 117o01'52" 01o00'40"
D 117o01'52" 01o03'35"
E 117o00'32" 01o03'35"
F 117o00'32" 01o00'15"

The depths reserved for the Samboja/Jembatan Bengkok field are,
with respect to the portion bounded by lines whose corners are
situated at points A, B, C and F (Jembatan Bengkok), 1,627 feet;
and, with respect to the portion bounded by lines whose corners are
situated at points F, C, D and E (Samboja), 5,611 feet.

3. Sanga-Sanga A 117o17'17" 00o26'55"
B 117o19'22" 00o26'55"
C 117o19'22" 00o32'20"
D 117o18'32" 00o33'55"
E 117o18'12" 00o34'40"
F 117o17'27" 00o36'05"
G 117o17'17" 00o36'30"
H 117o13'52" 00o43'10"
I 117o12'12" 00o42'25"
J 117o14'57" 00o36'55"
K 117o15'52" 00o34'55"
L 117o16'52" 00o32'55"
M 117o17'32" 00o31'35"

The depths reserved for the Sanga-Sanga field are, with respect to
the portion bounded by lines whose corners are situated at points
A, B, C and M (North Kutai Lama), 6,240 feet; with respect to the
portion bounded by lines whose corners are situated at points M, C,
D and L (South Kutai Lama), 3,770 feet; with respect to the portion
bounded by lines whose corners are situated at points L, D, E and
K (Anggana), 3,803; with respect to the portion bounded by lines
whose corners are situated at points K, E and F (Tanjung Una),
2,943 feet; with respect to the portion bounded by lines whose
corners are situated at points K, F, G and K (Muara), 4,003 feet;
and with respect to the portion bounded by lines whose corners are
situated at points J, G, H and I (Louise), 4,807 feet.

4. Sei Nangka A 117o06'17" 00o43'10"
B 117o08'57" 00o43'10"
C 117o05'47" 00o50'50"
D 117o03'07" 00o50'50"

The depth reserved for the Sei Nangka field is 1,503 feet.

5. Sambutan A 117o11'17" 00o30'10"
B 117o12'12" 00o30'10"
C 117o12'02" 00o32'20"
D 117o11'17" 00o32'20"

The depth reserved for the Sambutan field is 4,062 feet.

6. Binangat-Pelarang A 117o13'57" 00o24'50"
B 117o14'52" 00o24'50"
C 117o14'1.69" 00o27'0.4"
D 117o13'02" 00o29'25"
E 117o12'12" 00o29'25"
F 117o13'07" 00o27'0.4"

The depths reserved for the Binangat-Pelarang fields are, with
respect to the portion bounded by lines whose corners are situated
at points A, B, C and F (Binangat), 2,238 feet; and with respect to
the portion bounded by lines whose corners are situated at points
F, C, D and E, 2,159 feet.

7. Ulu Karang A 117o15'47" 00o22'15"
Mumus-Bivak B 117o16'42" 00o22'15"
C 117o16'28.47" 00o23'15.40"
D 117o15'52" 00o24'30"
E 117o14'57" 00o24'30"
F 117o15'27.54" 00o23'15.40"

The depths reserved for the Ulu Karang Mumus-Bivak fields are, with
respect to the portion bounded by lines whose corners are situated
at points A, B, C and F (Bivak), 1,962 feet; and with respect to
the portion bounded by lines whose corners are situated at points
F, C, D and E (Ulu Karang Mumus), 1,972 feet.

8. Semberah A 117o18'12" 00o16'05"
B 117o19'02" 00o16'05"
C 117o18'32" 00o17'25"
D 117o18'42" 00o17'25"
E 117o18'42" 00o18'25"
F 117o18'04" 00o18'25"
G 117o17'17" 00o20'35"
H 117o16'32" 00o20'35"

The depth reserved for the Semberah field is 3,973 feet.

3. SECONDARY RECOVERY OPERATIONS

3.1 Contractors will be willing to consider secondary
recovery operations in previously abandoned fields or essentially
depleted fields where Pertamina may consider it feasible and
desirable, and in such instances these areas shall be considered to
be part of the Contract Area.
<PAGE>
EXHIBIT "C"

Attached to and made an integral part of the Contract between
Perusahaan Pertambangan Minyak dan Gas Bumi Negara ("Pertamina")
and Roy M. Huffington, Inc., Virginia International Company,
Virginia Indonesia Company, Ultramar Indonesia Limited, Union Texas
East Kalimantan Limited, Universe Gas & Oil Company, Inc. and
Huffington Corporation ("Contractors").

ACCOUNTING PROCEDURE

Article I
General Provision

1. Definitions

The accounting procedure herein provided for is to be followed
and observed in the performance of either Party's obligations under
the Contract to which this Exhibit "C" is attached. The
definitions and terms appearing in this Exhibit "C" shall have the
same meaning as those defined in said Contract.

2. Accounts and Statements

Pertamina's and Contractors', as the case may be, accounting
records and books will be kept in accordance with generally
accepted and recognized accounting systems, consistent with modern
petroleum industry practices and procedures. Books and reports
will be maintained and prepared in accordance with methods
established by Pertamina. The chart of accounts and related
account definitions will be prescribed by Pertamina. Reports will
be organized for the use of Pertamina in carrying out its
management responsibilities under this Contract.

Article II
Operating Costs

The Parties, as the case may be, shall maintain an "Operating
Costs Account" in which there shall be reflected all Operating
Costs in connection with Petroleum Operations carried out under
this Contract.

1. Definition

For any Year in which commercial production occurs, Operating
Costs consist of (a) current Year's non-capital costs, (b) current
Year's depreciation for capital costs, and (c) current Year's
allowed recovery of prior year's unrecovered Operating Costs.

2. Non-Capital Costs

Non-capital costs means those Operating Costs incurred that
relate to the current Year's operations. In addition to costs
relating only to current operations, the costs of surveys and the
intangible costs of drilling exploratory and development wells as
described in paragraphs (c), (d) and (e) below, will be classified
as non-capital costs. Non-capital costs include, but are not
limited to, the following:

(a) Operations - Labor, materials and services used in day to
day oil well operations, oil field production facilities
operations, secondary recovery operations, storage,
handling, transportation and delivery operations, gas
well operations, gas field production facilities
operations, gas transportation, and delivery operations,
gas processing auxiliaries and utilities, and other
operating activities, including repairs and maintenance.

(b) Office, Services and General Administration - General
services including technical and related services,
material services, transportation, rental of specialized
and heavy engineering equipment, site rentals and other
rentals of services and property, personnel expenses,
public relations, and other expenses abroad.

(c) Production Drilling - Labor, materials, supplies and
services used in drilling wells with the object of
penetrating a proven reservoir, including the drilling of
delineation wells as well as redrilling, deepening or
recompleting wells, and access roads leading directly to
wells.

(d) Exploratory Drilling - Labor, materials, supplies and
services used in the drilling of wells with the object of
finding unproven reservoirs of Crude Oil and Natural Gas,
and access roads leading directly to wells.

(e) Surveys - Labor, materials, supplies and services used in
aerial, geological, topographical, geophysical and
seismic surveys, and core hole drilling.

(f) Other Exploration Expenditures - Auxiliary or temporary
facilities having lives of one year or less used in
exploration and purchased geological and geophysical
information.

3. Capital Costs

Capital Costs means expenditures made for items which normally
have a useful life beyond the Year incurred. A reasonable annual
allowance for depreciation of capital costs, computed as described
in Article III, Section 1, will be allowed as a recoverable
Operating Cost for the current Year. Capital costs include
classification described herein but are not limited to the
following specifications:

(a) Construction Costs of Utilities and Auxiliaries - Work
shops, power and water facilities, warehouse and field
roads except the access roads mentioned in Paragraphs
2(c) and 2(d) above.

(b) Construction, Housing and Welfare - Housing, recreational
facilities and other tangible property incidental to
construction.

(c) Production Facilities - Offshore platforms (including the
costs of labor, fuel, hauling and supplies for both the
offsite fabrication and onsite installation of platforms,
and other construction costs in erecting platforms and
installing submarine pipelines), wellhead equipment,
subsurface lifting equipment, production tubing, sucker
rods, surface pumps, flow lines, gathering equipment,
delivery lines, storage facilities, oil jetties and
anchorages, treating plants and equipment, secondary
recovery systems, gas plants and steam systems.

(d) Movables - Surface and subsurface drilling and production
tools, equipment and instruments, barges, floating craft,
automotive equipment, aircraft, construction equipment,
furniture and office equipment and miscellaneous
equipment.

Article III
Accounting Methods To Be Used To
Calculate Recovery of Operating Costs

1. Depreciation

Depreciation for each asset will be calculated beginning the
Year in which it is placed into service, with a full Year's
depreciation allowed the initial Year. The method used to
calculate each Year's allowable recovery of capital costs is the
double declining balance depreciation method. A switchover to the
straight line method is allowed whenever it becomes advantageous to
the Contractors. The lives to be used by Group II contractors, as
defined in Subsection 2 of this Article, is as follows:

Construction utilities and auxiliaries 14 years
Construction housing and welfare 20 years
Production facilities 14 years
Movables:
Automobiles and pickups except buses 3 years
Trucks -light (less than 13,000 pounds
and tractor units 4 years
Trucks -heavy (more than 13,000 pounds)
and trailers 6 years
Buses 9 years
Aircraft 6 years
Railroad cars and locomotives 15 years
Vessels, barges, tugs and similar water
transportation equipment 18 years
Drilling and production tools, equipment
and instruments 14 years
Construction equipment 6 years
Furniture and office equipment 10 years

The lives to be used by Group I contractors, as defined in
Subsection 2 of this Article, are one-half (50%) of the lives
described above.

If a Contractor is reclassified into Group II, as described
in Subsection 2 of this Article, assets capitalized prior to the
Year of reclassification will continue to depreciate based upon
one-half (50%) of the lives described above. If a Contractor is
reclassified into Group I, as described in Subsection 2 of this
Article, the undepreciated balance of assets capitalized prior to
the Year of reclassification will be depreciated over the remaining
Group I lives. The undepreciated balance of assets taken out of
services will not be charged to Operating Costs but will continue
depreciating based upon the lives described above, except where
such assets have been subjected to unanticipated destruction, for
example, by fire or accident.

2. Group I/Group II Classification

Contractors shall be classified as either Group I or Group II
with respect to both Crude Oil and Natural Gas depending on the
ratio of the proven reserves to estimated yearly production of the
Contract Area as follows:

Group I In the case of proven reserves having seven or fewer
years of remaining production.

Group II In the case of proven reserves having more than
seven years of remaining production.

A separate calculation shall be made for Crude Oil and Natural
Gas and Contractors may be treated as a Group I Contractors for
Crude Oil and Group II Contractors for Natural Gas or vice versa.
Contractors shall be considered to be Group I Contractors for all
assets attributable to new oil fields commencing production in 1977
or later. If Contractors are initially classified as Group I, a
recalculation of the ratio of the proven reserves to estimated
yearly production will be performed when additional proven reserves
have been discovered. This recalculation may result in a
reclassification of Contractors into Group II. If Contractors are
initially classified as Group II, a reclassification to Group I
will result if the ratio of the remaining proven reserves to the
estimated production of the immediately succeeding Year is seven or
less.

3. Overhead Allocation

General and administrative costs, other than direct charges,
allocable to this operation should be determined by a detailed
study, and the method determined by such a study shall be applied
each Year consistently. The method selected must be approved by
Pertamina, and such approval can be reviewed periodically by
Pertamina and Contractors.

4. Interest Recovery

Interest at rates not exceeding prevailing commercial rates
may be allowed as a recoverable Operating Cost for financing of
capital investments whether such financing is obtained from
Affiliates or the parent companies of Contractors or from third
party Nonaffiliates. Details of financing plan and amounts must be
included in each Year's budget of Operating Costs and approved by
Pertamina. For purposes of interest recovery, all other financing
must be approved by Pertamina.

5. Allocation of Oil and Gas Costs

Common support costs will be allocated on an equitable basis
agreed to by both Parties.

If after commencement of production the Natural Gas revenues
do not permit full recovery of Natural Gas costs, as outlined
above, then the excess costs shall be recovered from Crude Oil
revenues.

Likewise, if excess Crude Oil costs (Crude Oil costs less
Crude Oil revenues) exist, this excess can be recovered from
Natural Gas revenues. If production of either Natural Gas or Crude
Oil has commenced while the other has not, the allocable production
costs and common support costs will be allocated in an equitable
manner. Propane and Butane fractions extracted from Natural Gas
but not spiked in Crude Oil shall be deemed as Natural Gas for the
purpose of accounting.

6. Inventory Accounting

The costs of non-capital items purchased for inventory will
be recoverable at such time as the items have landed in Indonesia.

7. Order of Priority

(a) Recovery of Operating Costs in principle takes priority
over the Investment Credit allowance. However, the
Investment Credit to which Contractors become entitled
in any Year may only be recovered within that Year or
the next following Calendar Year and the above priority
rule may be disregarded if necessary to allow full
recovery of the Investment Credit in those two Years.

(b) Operating Costs recoverable out of Crude Oil Production
pursuant to Subsection 6.1.2 of the Contract shall be
recovered in the following order:

(i) Amortization of non-capital carryforward provided
for in Paragraph 2 of Article IV hereof.

(ii) Amortization of capital carryforward provided for
in Paragraph 4 of Article IV hereof.

(iii) Unrecovered prior Year non-capital costs.

(iv) Unrecovered prior Year depreciation of capital
assets.

(v) Current Year non-capital costs.

(VI) Current Year's depreciation for capital costs.
The interest allowance pursuant to Paragraph 4 of
Article III hereof with respect to current Year's
capital costs shall be computed as current Year's
non-capital costs.

(c) Operating Costs recoverable out of Natural Gas
Production shall be recovered in the same order of
priority as Crude Oil listed in (b) above, except that
the entire Natural Gas Production shall be available for
cost recovery without deduction of the Investment
Credit.

8. Insurance and Claims

Operating Costs shall include premiums paid for insurance
normally required to be carried for the operations relating to
Contractors' obligations conducted under the Contract, together
with all expenditures incurred and paid in settlement of any and
all losses, claims, damages, judgments and other expenses including
fees relating to Contractors' obligations under the Contract.

<PAGE>
CONTENTS

Section Page

I Scope and Definitions 2

II Term 4

III Exclusion of Areas 5

IV Work Program and Expenditures 5

V Rights and Obligations of the Parties 7

VI Recovery of Investment Credit and
Operating Costs and Handling of Production 11

VII Valuation of Crude Oil and Natural Gas 15

VIII Compensation and Production Bonuses 18

IX Payments and Currency 18

X Title to Equipment 19

XI Consultation and Arbitration 19

XII Employment and Training of Indonesian Personnel 20

XIII Termination 20

XIV Books and Accounts and Audits 21

XV Other Provisions 22

XVI Effectiveness 23

Exhibit "A":Map of Contract Area A-1

Exhibit "B":Description of Contract Area B-1

Exhibit "C":Accounting Procedure C-1

PRODUCTION SHARING CONTRACT

Between

PERUSAHAAN PERTAMBANGAN MINYAK DAN GAS BUMI NEGARA

(PERTAMINA)

And

ROY M. HUFFINGTON, INC.,

VIRGINIA INTERNATIONAL COMPANY,

VIRGINIA INDONESIA COMPANY,

ULTRAMAR INDONESIA LIMITED,

UNION TEXAS EAST KALIMANTAN LIMITED,

UNIVERSE GAS & OIL COMPANY, INC., and

HUFFINGTON CORPORATION

Effective as of the 8th day of August 1998
<PAGE>
CONTENTS

Section Page

I Scope and Definitions 2

II Term 4

III Exclusion of Areas 4

IV Work Program and Expenditures 5

V Rights and Obligations of the Parties 6

VI Recovery of Investment Credit and Operating
Costs and Handling of Production 10

VII Valuation of Crude Oil 14

VIII Compensation and Production Bonuses 17

IX Payments and Currency 17

X Title to Equipment 18

XI Consultation and Arbitration 18

XII Employment and Training of Indonesian Personnel 19

XIII Termination 19

XIV Books and Accounts and Audits 19

XV Other Provisions 20

XVI Effectiveness 22

Exhibit "A": Map of Contract Area A-1

Exhibit "B": Description of Contract Area B-1

Exhibit "C": Accounting Procedure C-1
<PAGE>
TABLE OF CONTENTS

SCOPE AND DEFINITIONS - 2 -

TERM - 5 -

EXCLUSION OF AREAS - 5 -

WORK PROGRAM AND EXPENDITURES - 6 -

RIGHTS AND OBLIGATIONS OF THE PARTIES - 6 -

RECOVERY OF INVESTMENT CREDIT AND OPERATING

COSTS AND HANDLING OF PRODUCTION - 11 -

VALUATION OF CRUDE OIL AND NATURAL GAS - 15 -

COMPENSATION AND PRODUCTION BONUSES - 18 -

PAYMENTS AND CURRENCY - 19 -

TITLE TO EQUIPMENT - 19 -

CONSULTATION AND ARBITRATION - 20 -

EMPLOYMENT AND TRAINING OF INDONESIAN PERSONNEL - 20 -

TERMINATION - 21 -

BOOKS AND ACCOUNTS AND AUDITS - 21 -

OTHER PROVISIONS - 22 -

EFFECTIVENESS - 24 -
<PAGE>
PRODUCTION SHARING CONTRACT

THIS PRODUCTION SHARING CONTRACT (this "Contract"), is made
and entered into in Jakarta, Indonesia, on this day of
, 1990, to become effective as of August 8, 1998, by
and between PERUSAHAAN PERTAMBANGAN MINYAK DAN GAS BUMI NEGARA, a
State Enterprise, established on the basis of Law No. 8/1971
("Pertamina"), party of the first part, and ROY M. HUFFINGTON,
INC., a Delaware, USA corporation ("Huffco"), VIRGINIA
INTERNATIONAL COMPANY, a Delaware, USA corporation ("Virginia"),
VIRGINIA INDONESIA COMPANY, a Nevada, USA corporation, ULTRAMAR
INDONESIA LIMITED, a Bermuda corporation, UNION TEXAS EAST
KALIMANTAN LIMITED, a Bahamian corporation, UNIVERSE GAS & OIL
COMPANY, INC., a Liberian corporation, and HUFFINGTON CORPORATION,
a Delaware, USA corporation (all of which are referred to herein
collectively as "Contractors", and each separately as
"Contractor"), parties of the second part (Pertamina and each
Contractor being referred to herein either individually as a
"Party" or collectively as the "Parties");

WITNESSETH:

WHEREAS, P.N. Perusahaan Minyak Nasional ("Permina"),
predecessor to Pertamina, entered into a Production Sharing
Contract dated August 8, 1968 with Huffco and Virginia covering
certain lands in East Kalimantan and South Sumatra, Indonesia,
including the Contract Area, which Production Sharing Contract, has
been amended and restated in its entirety by an Amended and
Restated Production Sharing Contract dated as of the date of
execution of this Contract between Pertamina and Contractors (such
Production Sharing Contract, as so amended and restated, being
herein called the "Predecessor Production Sharing Contract"); and

WHEREAS, all of the interest of Huffco and Virginia in the
Predecessor Production Sharing Contract is now held by Contractors;
and

WHEREAS, the Predecessor Production Sharing Contract will
expire by its terms at midnight on August 7, 1998, and Pertamina
and Contractors desire to enter into this Contract to provide for
the continued exploration and development of the Contract Area from
and after such date; and

WHEREAS, all mineral oil and gas existing within the statutory
mining territory of the Republic of Indonesia are national riches
controlled by the State; and

WHEREAS, Contractors have the financial ability, technical
competence and skill necessary to carry out the Petroleum
Operations hereinafter described; and

NOW, THEREFORE, for and in consideration of the mutual
promises, covenants and conditions hereinafter contained, it is
hereby agreed as follows:

SECTION I

SCOPE AND DEFINITIONS

1.1 SCOPE

1.2 DEFINITIONS

Badak Unit means the unit area defined in the Badak Gas Unit
Joint Operating Agreement dated as of January 1, 1976 between
Contractors, or their respective predecessors in interest, and the
Total Group, including the depth limitation specified therein,
which agreement was approved on behalf of the Republic of Indonesia
by letter No. 220/D.J./Migas/77 dated 26 December 1977 from the
Director General for Oil and Natural Gas of the Department of Mines
and by Pertamina by letter No. 25/DR/DU/1978 dated 12 January 1978.

Barrel means a quantity or unit of oil, forty-two (42) United
States gallons at the temperature of sixty degrees (60o)
Fahrenheit.

Budget of Operating Costs means cost estimate of all items
included in the Work Program.

Calendar Year or Year means a period of twelve (12) months
commencing with January 1 and ending on the following December 31
according to the Gregorian Calendar.

Contract Year means a period of twelve (12) consecutive months
according to the Gregorian Calendar counted from the Effective Date
of this Contract or from the anniversary of such Effective Date.

Effective Date means August 8, 1998, which date is recognized
to be later than the date of approval of this Contract by the
Government of the Republic of Indonesia in accordance with the
provisions of applicable law.

First Tranche Petroleum shall have the meaning set forth in
Section 6.3.1.

Foreign Exchange means currency other than that of the
Republic of Indonesia but acceptable to Pertamina and to the
Republic of Indonesia and to Contractors.

Investment Credit means the investment credit provided for in
Section 6.1.7 of this Contract.

Nilam Unit means the unit area defined in the Nilam Unit
Agreement dated as of January 1, 1980 between Contractors, or their
respective predecessors in interest, and the Total Group, including
the depth limitation specified therein, which agreement was
approved on behalf of the Republic of Indonesia by letter No.
2231/DM/Migas/1982 dated 31 December 1982 from the Director General
for Oil and Natural Gas of the Department of Mines and Energy and
by Pertamina by letter No. 9534/D0421/82-S1 dated 2 August 1982.

Petroleum means mineral oil and gas, herein called Crude Oil
and Natural Gas, as defined in this Contract and in Law No. 44
Prp/1960.

Petroleum Operations means all exploration, development,
extraction, producing, transportation, marketing and other
operations authorized or contemplated under this Contract.

Total Group means Total Indonesie and Indonesia Petroleum,
Ltd., or its predecessor in interest.

Work Program means a statement itemizing the Petroleum
Operations to be carried out in the Contract Area as set forth in
Section IV.

SECTION II

TERM

2.1.1 The term of this Contract shall be twenty (20) years
as from August 8, 1998.

SECTION III

EXCLUSION OF AREAS

3.1.1 Pursuant to the terms of the Predecessor Production
Sharing Contract, Contractors are obligated to relinquish portions
of the Contract Area comprising thirty percent (30%) of its area
prior to the Effective Date. Contractors shall carry on Petroleum
Operations hereunder on the unrelinquished portion of the Contract
Area.

3.1.2 In addition to the relinquishments of portions of
the Contract Area provided for in the Predecessor Production
Sharing Contract, the Parties agree that the following additional
surrenders of portions of the Contract Area shall be made:

(a) By not later than December 31, 2000 Contractors shall
surrender an area equal to ten percent (10%) of the
Contract Area;

(b) By not later than December 31, 2002 Contractors shall
surrender an additional area equal to fifteen percent
(15%) of the Contract Area; and

(c) By not later than December 31, 2004 Contractors shall
surrender an additional area equal to fifteen percent
(15%) of the Contract Area;

SECTION IV

WORK PROGRAM AND EXPENDITURES

4.1.1 Contractors shall carry out Petroleum Operations
under this Contract from and after the Effective Date.

4.1.2 At least three (3) months prior to the beginning of
each Calendar Year, or at such other times as otherwise mutually
agreed by the Parties, Contractors shall prepare and submit for
approval to Pertamina a Work Program and Budget of Operating Costs
for the Contract Area setting forth the Petroleum Operations which
Contractors propose to carry out during the ensuing Calendar Year.

4.1.3 Should Pertamina wish to propose a revision as to
certain specific features of said Work Program and Budget of
Operating Costs, it shall within thirty (30) days after receipt
thereof so notify Contractors specifying in reasonable details its
reasons therefor. Promptly thereafter, the Parties will meet and
endeavor to agree on the revisions proposed by Pertamina. In any
event, any portion of the Work Program as to which Pertamina has
not proposed a revision shall insofar as possible be carried out as
prescribed herein.

4.1.4 It is recognized by the Parties that the details of
a Work Program may require changes in the light of existing
circumstances, and nothing herein contained shall limit the right
of Contractors to make such changes, provided they do not change
the general objective of the Work Program nor increase the
expenditures in the approved Budget of Operating Costs.

4.1.5 It is further recognized that in the event of
emergency or extraordinary circumstances requiring immediate
action, any Party may take all actions it deems proper or advisable
to protect its interests and those of its respective employees, and
any cost so incurred shall be included in the Operating Costs.

4.1.6 Pertamina agrees that the approval of a proposed
Work Program and Budget of Operating Costs will not be unreasonably
withheld.

SECTION V

RIGHTS AND OBLIGATIONS OF THE PARTIES

5.1.1 Subject to Sections 5.1.2(f), (g) and (h):

5.1.2 Contractors shall:

(a) Advance all necessary funds and purchase or lease
all material, equipment and supplies required to be
purchased or leased with Foreign Exchange pursuant
to the Work Program.

(b) Furnish all technical aid, including foreign
personnel, required for the performance of the Work
Program, payment whereof requires Foreign Exchange.

(c) Furnish such other funds for the performance of the
Work Program that requires payment in Foreign
Exchange including payment to foreign third parties
who perform services as a contractor.

(d) Be responsible for the preparation and execution of
the Work Program, which shall be implemented in a
workmanlike manner and by appropriate scientific
methods; and Contractors shall take the necessary
precautions for protection of navigation and
fishing and shall prevent extensive pollution of
the sea or rivers. It is also understood that the
execution of the Work Program shall be exercised so
as not to conflict with obligations imposed on the
Government of Indonesia by International Law.

(e) Retain control to all leased property paid for with
Foreign Exchange and brought into Indonesia and be
entitled to freely remove same therefrom.

(f) Each Contractor shall have the right to sell,
assign, transfer, convey or otherwise dispose of
all its rights and interests under this Contract to
any Affiliated Company without the prior written
consent of Pertamina, provided that Pertamina shall
be notified in writing of the same beforehand and
further provided that any assignee to which such
rights and interests are assigned shall not hold
more than one Production Sharing Contract.

(g) Each Contractor shall have the right to sell,
assign, transfer, convey or otherwise dispose of
any part of its rights and interests under this
Contract undividedly to parties other than
Affiliated Companies with the prior written consent
of Pertamina, which consent shall not be
unreasonably withheld.

(h) Each Contractor shall have the right to sell,
assign, transfer, convey or otherwise dispose of
all of its rights and interests under this Contract
undividedly to parties other than Affiliated
Companies with the prior written consent of
Pertamina and the Government of the Republic of
Indonesia, which consent shall not be unreasonably
withheld.

(i) Have the right of ingress to and egress from the
Contract Area and to and from facilities wherever
located at all times.

(j) Have the right to use and have access to, and
Pertamina shall furnish, all geological,
geophysical, drilling, well, production and other
information held by Pertamina or by any other
governmental agency or enterprise relating to the
Contract Area, including well location maps.

(k) Have the right to use and have access to, and
Pertamina shall make available so far as possible,
all geological, geophysical, drilling, well,
production and other information now or in the
future held by it or by any other governmental
agency or enterprise relating to the areas adjacent
to the Contract Area.

(l) Submit to Pertamina copies of all such original
geological, geophysical, drilling, well, production
and other data and reports as may be compiled
during the term hereof.

(m) Prepare and carry out plans and programs for
industrial training and education of Indonesians
for all job classifications with respect to
operations contemplated hereunder, as provided in
Section XII hereof.

(n) Each Contractor shall have the right during the
term hereof to freely lift, dispose of and export
its share of Petroleum and retain abroad the
proceeds obtained therefrom.

(o) Appoint an authorized representative for Indonesia
with respect to this Contract, who shall have an
office in Jakarta.

(p) After commercial production commences, fulfill
their obligation towards the supply of the domestic
market in Indonesia. Contractors agree to sell and
deliver to Pertamina a portion of the share of the
Crude Oil to which they are entitled pursuant to
Sections 6.1.3 and 6.3.1 calculated for each Year
as follows:

(i) multiply the total quantity of Crude Oil
produced from the Contract Area by a fraction,
the numerator of which is the total quantity
of Crude Oil to be supplied and the
denominator of which is the entire Indonesian
production of Crude Oil of all petroleum
companies;

(ii) compute twenty-five percent (25%) of the total
quantity of Crude Oil produced from the
Contract Area; and

(iii) multiply the lower quantity computed either
under (i) or (ii) by the resultant
percentage of Contractors' entitlement as
applicable under Section 6.1.3 from the
Crude Oil remaining after deducting
Operating Costs.

The quantity of Crude Oil computed under (iii)
shall be the maximum quantity to be supplied by
Contractors in any Year pursuant to this paragraph
and deficiencies, if any, shall not be carried
forward to any subsequent Year; provided, that if
for any Year the recoverable Operating Costs exceed
the difference of total sales proceeds from Crude
Oil produced and saved hereunder minus First
Tranche Petroleum under Section 6.3.1 and
Investment Credit under Section 6.1.7, Contractors
shall be relieved from this supply obligation for
such Year.

(q) The price at which such Crude Oil shall be
delivered and sold under Section 5.1.2(p) shall be
20 US cents per Barrel f.o.b. point of export with
respect to Crude Oil from fields commencing
production prior to February 23, 1989, and ten
percent (10%) of the price determined under Section
6.1.2 with respect to Crude Oil from fields
commencing production from and after such date.
Contractors shall not be obligated to transport
such Crude Oil beyond the point of export, but upon
request Contractors shall assist in arranging
transportation and such assistance shall be without
cost or risk to Contractors. Notwithstanding the
foregoing, for a period of five (5) consecutive
years (meaning sixty (60) consecutive months)
starting the month of the first delivery of Crude
Oil produced and saved from each new field in the
Contract Area, the fee per Barrel for the quantity
of Crude Oil supplied to the domestic market from
each such new field shall be equal to the price
determined in accordance with Section VI for Crude
Oil from such field taken for the recovery of
Operating Costs. The proceeds in excess of the
aforesaid 20 US cents per Barrel or ten percent
(10%) of the price under Section 6.1.2, whichever
is applicable, shall preferably be used to assist
financing of continued exploration efforts by
Contractors in the Contract Area or in other areas
of the Republic of Indonesia if such opportunity
exists. In case no such opportunity can be
demonstrated to exist in accordance with good oil
field practice, Contractors shall be free to use
such proceeds at their own discretion.

(r) Give preference to such goods and services which
are produced in Indonesia or rendered by Indonesian
nationals, provided such goods and services are
offered at equally advantageous conditions with
regard to quality, price, availability at the time
and in the quantities required.

(s) Each Contractor shall pay to the Government of the
Republic of Indonesia the Income Tax including
final tax on profits after tax deduction imposed on
it pursuant to the Indonesian Income Tax Law and
its implementing regulations. Contractors shall
comply with the requirements of the law in
particular with respect to filing of returns,
assessments of tax and keeping and showing of books
and records.

5.1.3 Pertamina shall:

(a) Have and be responsible for the management of the
operations contemplated hereunder; however,
Pertamina shall assist and consult with Contractors
with a view to the fact that Contractors are
responsible for the Work Program.

(b) Except with respect to the obligation of each
Contractor to pay its Indonesian Income Tax
including final tax on profits after tax deduction
as provided in Section 5.1.2(s), assume and
discharge other Indonesian taxes of Contractors,
including value added taxes, transfer taxes, sales
taxes, import and export duties on materials,
equipment and supplies brought into or taken out of
Indonesia by Contractors, their contractors or
subcontractors and exactions in respect of
property, capital, net worth, operations,
remittances or transactions including any tax or
levy on or in connection with operations performed
hereunder by Contractors. Pertamina shall not be
obliged to pay the Indonesian Income Tax including
final tax on profits after tax deduction, nor taxes
on tobaccos, liquor and personnel income tax, nor
income tax or other taxes not listed above of
contractors and subcontractors. The obligations of
Pertamina hereunder shall be deemed to have been
complied with by the delivery to Contractors,
within one hundred and twenty (120) days after the
end of each Calendar Year, of documentary proof in
accordance with the Indonesian fiscal laws that
liability for the above-mentioned taxes has been
satisfied, except that with respect to any of such
liabilities which Contractors may be obliged to pay
directly, Pertamina shall reimburse Contractors
only out of its share of production hereunder
within sixty (60) days after receipt of invoice
therefor. Pertamina should be consulted prior to
payment of such taxes by Contractors or by any
other party on Contractors' behalf.

(c) Otherwise assist and expedite Contractors'
execution of the Work Program by providing
facilities, supplies and personnel, including but
not limited to supplying or otherwise making
available all necessary visas, work permits,
transportation, security protection and rights of
way and easements as may be requested by
Contractors and made available from the resources
under Pertamina's control. In the event such
facilities, supplies or personnel are not readily
available, then Pertamina shall promptly secure the
use of such facilities, supplies and personnel from
alternative sources. Expenses thus incurred by
Pertamina at Contractors' request shall be
reimbursed to Pertamina by Contractors and included
in the Operating Costs. Such reimbursements will
be made in United States Dollars computed at the
rate of exchange extended by the Indonesian
Government to Petroleum companies at the time of
conversion. Contractors shall advance to Pertamina
before the beginning of each annual Work Program a
minimum amount of Seventy-five Thousand US Dollars
(US $75,000) for the purpose of enabling Pertamina
to meet rupiah expenditures incurred pursuant to
this Section 5.1.3(c). If at any time during the
annual Work Program period the minimum amount
advanced under this Section 5.1.3(c) has been fully
expended, separate additional advance payments as
may be necessary to provide for rupiah expenses
estimated to be incurred by Pertamina during the
balance of such annual Work Program period will be
made. If any amount advanced hereunder is not
expended by Pertamina by the end of an annual Work
Program period, such unexpended amount shall be
credited against the minimum amount to be advanced
pursuant to this Section 5.1.3(c) for the
succeeding annual Work Program period.

(d) Ensure that at all times during the term hereof
sufficient rupiah funds shall be available to cover
the rupiah expenditures necessary for the execution
of the Work Program.

(e) Have title to all original data resulting from
Petroleum Operations, including but not limited to
geological, geophysical, petrophysical,
engineering, well logs and completion, status
reports and any other data as Contractors may
compile during the term hereof; provided, however,
that all such data shall not be disclosed to third
parties without informing Contractors and giving
Contractors the opportunity to discuss the
disclosure of such data if Contractors so desire,
and further provided that Contractors may retain
copies of such data.

(f) To the extent that it does not interfere with
Contractors' performance of the Petroleum
Operations, use the equipment which becomes its
property by virtue of this Contract solely for the
Petroleum Operations envisaged under this Contract;
and if Pertamina wishes to use such equipment for
any alternative purpose, then Pertamina shall first
consult Contractors.

SECTION VI

RECOVERY OF INVESTMENT CREDIT AND OPERATING

COSTS AND HANDLING OF PRODUCTION

6.1 CRUDE OIL

6.1.1 Contractors are authorized by Pertamina and
obligated to market all Crude Oil produced and saved from the
Contract Area subject to the provisions hereinafter set forth.

6.1.2 Contractors will recover all Operating Costs out of
the sales proceeds or other disposition of the required quantity of
Crude Oil equal in value to such Operating Costs which is produced
and saved hereunder and not used in Petroleum Operations. Except
as provided in Sections 7.1.1(d) and (e), Contractors shall be
entitled to take and receive and freely export such Crude Oil. For
purposes of determining the quantity of Crude Oil delivered to
Contractors required to recover said Operating Costs, the weighted
average price of all Crude Oil produced and sold from the Contract
Area during the Calendar Year will be used, excluding, however,
deliveries made pursuant to Section 5.1.2(p). If, in any Calendar
Year, the Operating Costs recoverable exceed the value of the Crude
Oil produced and saved hereunder and not used in Petroleum
Operations, then the unrecovered excess shall be recovered in
succeeding years.

6.1.3 Of the Crude Oil remaining after deducting Operating
Costs:

(a) For Crude Oil production as a result of tertiary
recovery EOR projects, the Parties shall be
entitled to take and receive each Year,
respectively, 61.5385% for Pertamina and 38.4615%
for Contractors. Tertiary recovery EOR production
represents a separate segment from the others.

(b) For Crude Oil production from pre-Tertiary
reservoir rocks, the Parties shall be entitled to
take and receive each Year as follows:

(i) Pertamina 61.5385% and Contractors 38.4615% for the
segment of 0 to 50,000 Barrels daily average of all
of such pre-Tertiary production of the Contract
Area for the Year;

(ii) Pertamina 71.1538% and Contractors 28.8462% for the
segment of 50,001 Barrels to 150,000 Barrels daily
average of all of such pre-Tertiary production of
the Contract Area for the Year; and

(iii) Pertamina 80.7692% and Contractors 19.2308 for
the segment of 150,001 Barrels daily average
of all of such pre-Tertiary production of the
Contract Area for the Year and more.

Pre-Tertiary reservoir rocks mean petroleum reservoir
rocks deposited or formed in pre-Tertiary times.

(c) For Crude Oil production of the Contract Area other
than those under subparagraphs (a) and (b) above,
each year Pertamina shall be entitled to take and
receive 71.1538% and Contractors shall be entitled
to take and receive 28.8462%. Crude Oil under this
subparagraph (c) represents a separate segment from
the others.

6.1.5 Contractors will use their best reasonable efforts
to market the Crude Oil to the extent markets are available. Each
Party shall be entitled to take and receive its respective portion
in kind.

6.1.6 If Pertamina elects to take any part of its portion
of Crude Oil in kind, it shall so advise Contractors in writing not
less than ninety (90) days prior to the commencement of each
semester of each Calendar Year specifying the quantity which it
elects to take in kind, such notice to be effective for the ensuing
semester of such Calendar Year (provided, however, that such
election shall not interfere with the proper performance of any
Crude Oil sales agreement for Petroleum produced within the
Contract Area which a Contractor has executed prior to the notice
of such election). Failure to give such notice shall be
conclusively deemed to evidence the election not to take in kind.
Any sale of Pertamina's portion of Crude Oil shall not be for a
term of more than one (1) year (meaning twelve (12) consecutive
months) without Pertamina's consent.

6.1.7 Contractors may recover an investment credit (the
"Investment Credit") amounting to seventeen percent (17%) of the
capital investment costs directly required for developing Crude Oil
production facilities (as defined in Article II, paragraph 3(c) of
the Accounting Procedure attached hereto as Exhibit "C") of each
new field out of deduction from gross production before recovering
Operating Costs, commencing in the earliest production Year or
Years before tax deduction (to be paid in advance in such
production Year when taken). The Investment Credit may be applied
to new secondary recovery and tertiary recovery EOR projects but is
not applicable to "interim production schemes" or further
investments to enhance production and reservoir drainage in excess
of what was contemplated in the original project as approved by
Pertamina.

6.2 NATURAL GAS

6.2.1 Any Natural Gas produced from the Contract Area, to
the extent not used in Petroleum Operations hereunder, may be
flared if the processing and utilization thereof is not economical.
Such flaring shall be permitted to the extent that gas is not
required to effectuate the maximum economic recovery of Petroleum
by secondary recovery operations, including repressuring and
recycling.

6.2.2 Should Pertamina and Contractors consider that the
processing and utilization of Natural Gas is economical and choose
to participate in the processing and utilization thereof, in
addition to that used in secondary recovery operations, then the
construction and installation of facilities for such processing and
utilization shall be carried out pursuant to an approved Work
Program. It is hereby agreed that all costs and revenues derived
from such processing, utilization and sale of Natural Gas shall be
treated on a basis equivalent to that provided for herein
concerning Petroleum Operations and disposition of Crude Oil,
except of the Natural Gas and propane and butane fractions
extracted from Natural Gas but not spiked in Crude Oil after
deducting Operating Costs associated with Natural Gas operations as
stipulated in Exhibit "C", the following shall apply:
(a) With respect to Natural Gas produced and saved from the
Badak Unit and the Nilam Unit which is attributable to
this Contract and sold under (i) the LNG Sales Contract
dated December 3, 1973 between Pertamina and certain
buyers in Japan (including LNG delivered under such LNG
Sales Contract in accordance with the Supply Agreement
for Korean Carry-Over Quantities dated December 30, 1987
between Pertamina and Contractors), (ii) the Badak LNG
Sales Contract dated April 14, 1981 between Pertamina and
certain buyers in Japan, (iii) seven (7) contracts for
the sale of LPG, each dated July 15, 1986 and entitled
Arun and Bontang LPG Sales and Purchase Contract, between
Pertamina and certain buyers in Japan, and (iv) any
renewal or extension of any of such contracts, Pertamina
shall be entitled to take and receive 51.9231% and
Contractors shall be entitled to take and receive
48.0769%. If any Natural Gas is supplied from other
fields in the Contract Area and sold under any of the
above-mentioned sales contracts in place of proved
reserves of Natural Gas from the Badak Unit and Nilam
Unit, to the extent such proved reserves were certified
and used in the determination of participation by
Contractors in support of Pertamina's obligations under
such sales contracts, such substitute Natural Gas will
also be shared as provided in this Section 6.2.2(a).
This production represents a separate segment from that
specified in subparagraph (b) below.

(b) With respect to all other Natural Gas produced and saved
from the Contract Area, including Natural Gas produced
and saved from the Badak Unit and the Nilam Unit which is
attributable to this Contract and sold under LNG sales
contracts other than those specified in the preceding
paragraph, Pertamina shall be entitled to take and
receive 42.3077% and Contractors shall be entitled to
take and receive 57.6923%. This production represents a
separate segment from that specified in subparagraph (a)
above.

The deduction of Operating Costs before the entitlements are taken
by each respective Party as provided under this Section 6.2.2 shall
be subject to the following proration method: for each Year, the
recoverable Operating Costs shall be apportioned for deduction from
the production of each of the segments as hereinabove defined at
the same ratios as the production from each such segment over the
total production of such Year. In connection with the foregoing,
production of Natural Gas delivered under supply agreements between
Pertamina and Contractors shall be allocated among the fields from
which such Natural Gas is produced (and, as to the Badak Unit and
Nilam Unit, between Natural Gas dealt with under subparagraphs (a)
and (b) above) in the ratio in which volumes of such Natural Gas
are deemed delivered under such supply agreements in such Year.

6.2.3 In the event, however, that Contractors consider
that the processing and utilization of Natural Gas is not
economical, then Pertamina may choose to take and utilize such
Natural Gas that would otherwise be flared, all costs of taking and
handling to be for the sole account and risk of Pertamina.

6.3 FIRST TRANCHE PETROLEUM

6.3.1 Notwithstanding anything to the contrary elsewhere
contained in this Contract, the Parties shall be entitled to take
and receive in each Year twenty percent (20%) of all Petroleum
produced and saved in such Year ("First Tranche Petroleum") before
any allocation of Crude Oil or Natural Gas to Contractors for the
recovery of Investment Credit and Operating Costs as provided in
this Section VI. Such First Tranche Petroleum comprising Crude Oil
shall be shared between Pertamina and Contractors in accordance
with the sharing splits provided under Section 6.1.3, and such
First Tranche Petroleum comprising Natural Gas shall be shared
between Pertamina and Contractors in accordance with the sharing
splits provided under Section 6.2.2. Such First Tranche Petroleum
shall be apportioned to the respective production segments defined
in Sections 6.1.3 and 6.2.2 in the same ratios as production from
each such segment (or, in the case of Natural Gas delivered under
supply agreements, deemed production under each such segment) over
total production for the Year.

6.4 UNRECOVERED COSTS UNDER PREDECESSOR PRODUCTION SHARING
CONTRACT

6.4.1 It is agreed that the undepreciated balance as of
the Effective Date of each asset placed in service under the
Predecessor Production Sharing Contract shall be carried forward
and depreciated under the terms of this Contract, and that any
Operating Costs or Investment Credit recoverable under the terms of
the Predecessor Production Sharing Contract and remaining
unrecovered as of the Effective Date shall be carried forward and
recovered under the terms of this Contract.

SECTION VII

VALUATION OF CRUDE OIL AND NATURAL GAS

7.1.1 Crude Oil sold to third parties shall be valued as
follows:

(a) All Crude Oil taken by Contractors, including their
share and the share for the recovery of Investment
Credit and Operating Costs, and sold to third
parties shall be valued at the net realized price
f.o.b. Indonesia received by Contractors for such
Crude Oil.

(b) All of Pertamina's Crude Oil taken by Contractors
and sold to third parties shall be valued at the
net realized price f.o.b. Indonesia received by
Contractors for such Crude Oil.

(d) Subject to any existing Crude Oil sales agreement,
if a more favorable net realized price is available
to Pertamina for the Crude Oil referred to in
Sections 7.1.1(a) and (b), except Contractors'
share of Crude Oil, then Pertamina shall so advise
Contractors in writing not less than ninety (90)
days prior to the commencement of the deliveries
under Pertamina's proposed sales contract.
Forty-five (45) days prior to the start of such
deliveries, Contractors shall notify Pertamina
regarding Contractors' intention to meet the more
favorable net realized price in relation to the
quantity and period of delivery concerned in said
proposed sales contract. In the absence of such
notice Pertamina shall market said Crude Oil.

(e) Pertamina's marketing of such Crude Oil as referred
to in Section 7.1.1(d) shall continue until
forty-five (45) days after Pertamina's net realized
price on said Crude Oil becomes less favorable.
Contractors' obligation to market said Crude Oil
shall not apply until after Pertamina has given
Contractors at least forty-five (45) days' advance
notice of its desire to discontinue such sales. As
long as Pertamina is marketing the Crude Oil
referred to above, it shall account to Contractors,
on the basis of the more favorable net realized
price.

(f) Without prejudice to any of the provisions of
Section VI and Section VII, Contractors may at
their option transfer to Pertamina during any
Calendar Year the right to market any Crude Oil
which is in excess of Contractors' normal and
contractual requirements, provided that the price
is not less than the net realized price from the
Contract Area. Pertamina's request stating the
quantity and expected loading date must be
submitted in writing at least thirty (30) days
prior to lifting said Crude Oil. Such lifting must
not interfere with Contractors' scheduled tanker
movements. Pertamina shall account to Contractors
in respect of any sale made by it hereunder.

(g) Pertamina shall have the option in any Year in
which the quantity of Petroleum to which it is
entitled pursuant to Sections 6.1.3 and 6.3.1
hereof is less than 50% of the total production, by
ninety (90) days' written notice in advance of that
Year, to market for the account of Contractors, at
the price provided for in Section VII hereof for
the recovery of Operating Costs, a quantity of
Petroleum which together with Pertamina's
entitlement under Sections 6.1.3 and 6.3.1 equals
fifty percent (50%) of the total Petroleum produced
and saved from the Contract Area.

7.1.2 Crude Oil sold to other than third parties shall be
valued as follows:

(a) By using the weighted average per unit price
received by Contractors and Pertamina from sales to
third parties excluding, however, commissions and
brokerages paid in relation to such third party
sales during the three (3) months preceding such
sale, adjusted as necessary for quality, grade and
gravity; and
(b) If no such third party sales have been made during
such period of time, then on the basis used to
value Indonesian Crude Oil of similar quality,
grade and gravity and taking into consideration any
special circumstances with respect to sales of such
Indonesian Crude Oil.

7.1.3 Third party sales referred to in this Section VII
shall mean sales by Contractors to purchasers independent of
Contractors, that is purchasers with whom (at the time the sale is
made) Contractors have no contractual interest involving directly
or indirectly any joint interest.

7.1.4 Commissions or brokerages incurred in connection
with sales to third parties, if any, shall not exceed the customary
and prevailing rate.

7.1.5 Natural Gas sold to third parties shall be valued
at the net realized price received therefor. With respect to
Natural Gas delivered from the Contract Area in support of
Pertamina's obligations under sales contracts with third parties,
the Parties have agreed in the past, and may agree in the future,
that the net realized price for such Natural Gas shall constitute
the amounts paid by the buyers under such sales contracts, less
deductions for costs of the trades incurred outside of this
Contract (e.g., costs of construction, including financing, and
operation of the plant in which such Natural Gas is processed,
transportation costs from such plant or the Contract Area, as may
be applicable, to the point of delivery of such Natural Gas under
the sales contracts and other costs agreed to by Pertamina and
Contractors).

7.1.7 In the event Petroleum Operations involve the
segregation of Crude Oils of different quality and/or grade and if
the Parties do not otherwise mutually agree:

(a) Any and all provisions of this Contract concerning
valuation of Crude Oil shall separately apply to
each segregated Crude Oil; and

(b) Each Crude Oil produced and segregated in a given
Year shall contribute to:

(i) The "required quantity" of Crude Oil to which the
Parties are entitled in such Year pursuant to
Section 6.3.1;

(ii) The "required quantity" utilized in such Year for
the recovery of Investment Credit pursuant to
Section 6.1.7;

(iii) The "required quantity" utilized in such Year
for the recovery of Operating Costs pursuant
to Section 6.1.2 hereof;

(iv) The "required quantity" of Crude Oil to which the
Parties are entitled in such Year pursuant to
Section 6.1.3 hereof; and

(v) The "required quantity" of Crude Oil which
Contractors agree to sell and deliver in such Year
for domestic consumption in Indonesia pursuant to
Section 5.1.2(p) hereof, out of the share of Crude
Oil to which it is entitled pursuant to Sections
6.1.3 and 6.3.1;

with quantities, each of which shall bear to the respective
"required quantity" (referred to in (i) through (v) above)
the same proportion as the quantity of such Crude Oil
produced and segregated in such given Year bears to the
total quantity of Crude Oil produced in such Year from the
Contract Area.

SECTION VIII

COMPENSATION AND PRODUCTION BONUSES

8.1.1 The consideration for Pertamina to enter into this
Contract is provided for in Section 8.1.1 of the Predecessor
Production Sharing Contract.

8.1.2 The Predecessor Production Sharing Contract contains
in Section 8.1.1(b) a provision pursuant to which Contractors shall
pay to Pertamina a certain bonus contingent on the occurrence of a
specified level of cumulative production of Crude Oil from the
Contract Area. If such bonus has not been paid by the Effective
Date, then Contractors agree to pay to Pertamina, in lieu of such
bonus specified in the Predecessor Production Sharing Contract, a
production bonus of US $5,000,000, which shall be due thirty (30)
days following the end of the month in which cumulative production
of Crude Oil from the Contract Area (or, in the case of production
from unitized areas, deemed by the applicable unit agreement to be
from the Contract Area) first exceeds 185,000,000 Barrels. If such
bonus specified in the Predecessor Production Sharing Contract
shall have been paid prior to the Effective Date, then Contractors
shall have no obligation under this Contract to pay such bonus.

8.1.3 The above-described bonus shall be borne solely by
Contractors and shall not be included in or recoverable as
Operating Costs. It is acknowledged that (a) the amount of such
bonus payment has been determined based on the tax law specified in
Section 5.1.2(s), and (b) for Indonesian tax purposes such bonus
payment shall be deductible from Contractors' taxable income in
respect of the Calendar Year in which payment is made.

SECTION IX

PAYMENTS AND CURRENCY

9.1.1 All payments which this Contract obligates
Contractors to make to Pertamina or the Government of the Republic
of Indonesia shall be made in United States Dollars at a bank to
be designated by each of them and agreed upon by Bank Indonesia or,
at Contractors' election, other currencies acceptable to them,
except that Contractors may make such payments in Indonesian
Rupiahs to the extent that such currency is realized as a result of
the sale of Crude Oil, Natural Gas or Petroleum products, if any.

9.1.3 Any payments required to be made pursuant to this
Contract shall be made within thirty (30) days following the end of
the month in which the obligation to make such payments occurs.

SECTION X

TITLE TO EQUIPMENT

SECTION XI

CONSULTATION AND ARBITRATION

11.1.1 Periodically, Pertamina and Contractors shall meet
to discuss the conduct of the Petroleum Operations envisaged under
this Contract and will make every effort to settle amicably any
problem arising therefrom.

11.1.3 The decision of a majority of the arbitrators shall
be final and binding upon the Parties.

11.1.4 In the event the arbitrators are unable to reach a
decision, the dispute shall be referred to Indonesian Court of Law
for settlement.

11.1.5 Except as provided in this Section, arbitration
shall be conducted in accordance with the rules of arbitration of
the International Chamber of Commerce.

SECTION XII
EMPLOYMENT AND TRAINING OF INDONESIAN PERSONNEL

SECTION XIII

TERMINATION

SECTION XIV

BOOKS AND ACCOUNTS AND AUDITS

14.1 BOOKS AND ACCOUNTS

14.2 AUDITS

14.2.1 Contractors shall have the right to inspect and
audit Pertamina's books and accounts relating to this Contract for
any Calendar Year within the one (1) year period following the end
of such Calendar Year. Any such audit will be satisfied within
twelve (12) months after its commencement. Any exception must be
made in writing within sixty (60) days following the end of such
audit, and failure to give such written exception within such time
shall establish the correctness of Pertamina's books and accounts.

14.2.2 Pertamina and the Government of the Republic of
Indonesia shall have the right to inspect and audit Contractors'
books and accounts relating to this Contract for any Calendar Year
covered by this Contract. Any exception must be made in writing
within sixty (60) days following the completion of such audit. In
addition, Pertamina and the Government of the Republic of Indonesia
may require Contractors to engage their independent accountants to
examine, in accordance with generally accepted auditing standards,
Contractors' books and accounts relating to this Contract for any
Calendar Year or perform such auditing procedures as deemed
appropriate by Pertamina. A copy of the independent accountant's
report of any exceptions shall be forwarded to Pertamina within
sixty (60) days following the completion of such audit.

SECTION XV

OTHER PROVISIONS

15.1 NOTICES

If to Pertamina:

PERUSAHAAN PERTAMBANGAN MINYAK
DAN GAS BUMI NEGARA
(PERTAMINA)
Jalan Merdeka Timur 1-A
Jakarta, Indonesia

If to Contractors:

ROY M. HUFFINGTON, INC.
Jl. H. Rasuna Said
Kuningan Plaza, P.O. Box 2828
Jakarta Selatan, Indonesia

The Parties may substitute or change such addresses on written
notice thereof.

15.2 LAWS AND REGULATIONS

15.2.1 The laws of the Republic of Indonesia shall apply
to this Contract.

15.2.2 No term or provision of this Contract, including the
agreement of the Parties to submit to arbitration hereunder, shall
prevent or limit the Government of the Republic of Indonesia from
exercising its inalienable rights.

15.3 SUSPENSION OF OBLIGATION

15.3.2 If operations are delayed, curtailed or prevented
by such causes, then the time for carrying out the obligations
thereby affected, the term of this Contract and all rights and
obligations hereunder shall be extended for a period equal to the
period thus involved.

15.4 PROCESSING OF PRODUCTS

(a) Pertamina has first requested Contractors thereto;

(b) Contractors' share of Crude Oil pursuant to
Sections 6.1.3 and 6.3.1 hereof be not less than
175,000 Barrels per day; and

(c) If refining capacity has to be erected, that the
setting up and use of such refining capacity be
economical in the judgment of the Parties.

15.4.3 It is further agreed that Contractors may in lieu
of setting up such refining capacity, but subject to the same
conditions, make an equivalent investment in another project
related to the Petroleum or petrochemical industries.

15.4.4 Petroleum to be delivered to such facilities would
be sold by Contractors at the net realized prices f.o.b. Indonesia
received by Contractors established pursuant to Section VII hereof
or at another mutually agreed price.

SECTION XVI

EFFECTIVENESS

16.1.1 This Contract shall come into effect on the
Effective Date.

16.1.2 This Contract shall not be annulled, amended or
modified in any respect except by the mutual consent in writing of
the Parties.

IN WITNESS WHEREOF, PERTAMINA AND CONTRACTORS have executed
this Contract, in quadruplicate and in the English language, as of
the day and year first above written.

PERUSAHAAN PERTAMBANGAN ROY M. HUFFINGTON INC.
MINYAK DAN GAS BUMI NEGARA
(PERTAMINA)

By: /s/ By: /s/

VIRGINIA INTERNATIONAL COMPANY VIRGINIA INDONESIA COMPANY

By: /s/ By: /s/

ULTRAMAR INDONESIA LIMITED UNION TEXAS EAST
KALIMANTAN
LIMITED

By: /s/ By: /s/

UNIVERSE GAS & OIL COMPANY, INC. HUFFINGTON CORPORATION

By: /s/ By: /s/

APPROVED by the Minister of Mines and Energy this day of
, 1990, on behalf of the Government of the
Republic of Indonesia.

/s/
<PAGE>
EXHIBIT "A"

[To be supplied] <PAGE>
EXHIBIT "B"

1. CONTRACT AREA

Using the Greenwich Coordinate system, starting at point
"A", located at the intersection of the coastline at high
tide and coincidental with the Equator, proceed Southwest
following the coastline at high tide to point "B",
located at the intersection of the coastline at high tide
and 01o30'00" South latitude;