“With NorthernStar Natural Gas, Clearwater Port has significant competitive advantages that should translate into lower cost gas delivered sooner, for consumers in Ventura County and California,” said NorthernStar President Paul Soanes, who previously played a central role in Crystal Energy’s leadership. “Clearwater Port has the resources and expertise to build and operate a safe, environmentally sound clean energy terminal that Ventura County and California need.”

“We’re transforming an existing oil platform into a safe, state-of-the-art import terminal for clean natural gas – instead of building another large structure off the coast – so Clearwater Port can preserve the California coastal experience and more quickly begin serving Ventura County’s and California’s energy needs,” said Soanes.

Clearwater Port’s construction timeline is shorter, in part because the terminal will not have on-site storage of liquefied natural gas. Instead, Clearwater will immediately return liquefied natural gas to its gaseous state (regasification), and then use undersea pipelines along Platform Grace’s existing pipeline corridors to transmit the natural gas into the underground SoCal Gas system for use in homes and businesses in Ventura County and California.

In March, Crystal Energy, LLC, and its wholly owned subsidiary, Clearwater Port, contributed their ownership to NorthernStar Natural Gas. Mr. Paul Soanes and Mr. Si Garrett, who were previously involved in the Crystal Energy leadership team, continue to actively oversee development of Clearwater Port, as President and Chief Executive Officer of NorthernStar Natural Gas, respectively. The NorthernStar Natural gas management team has significant experience having developed more than 50 energy infrastructure projects with an aggregate investment of over $15 billion – including participating in the development, construction or operation of nine liquefied natural gas projects worldwide.

Several of Clearwater Port’s competitive advantages spring from NorthernStar Natural Gas’ unique strategy of developing a portfolio of liquefied natural gas projects, which also includes Oregon’s Bradwood Landing to serve the Pacific Northwest. The approach should be more attractive to potential suppliers, who would gain the flexibility to deliver to multiple receiving points connected to several major pipelines and West Coast markets. Additionally, by simultaneously developing a portfolio of LNG terminals, NorthernStar Natural Gas benefits from economies of scale – and thus lower costs – at the development, marketing, financing, construction and operating stages. (Like Clearwater Port, Bradwood Landing is scheduled to be the first operating LNG terminal in its respective markets.)

Clearwater Port is currently finalizing enhancements to the project and preparing to file an updated application with the U.S. Coast Guard and California State Lands Commission.

“Clearwater Port will meet or exceed all federal, state and local safety and environmental requirements – which we look forward to demonstrating during California’s and the federal government’s rigorous and thorough public review process,” said NorthernStar Natural Gas C.E.O. William “Si” Garrett, a retired Captain in the U.S. Navy’s Nuclear Submarine Fleet. “We’re committed to a transparent process and are engaging the local community to forge meaningful partnerships with individuals and organizations in the Oxnard/Ventura County area,” Mr. Garrett added.

About NorthernStar Natural Gas, Inc., and Clearwater Port
NorthernStar Natural Gas was founded to develop, build, own and operate safe, affordable and environmentally sound liquefied natural gas receiving/importation terminals on the West Coast of the United States. The company has an experienced management team with significant project development experience, having been involved in the development of more than 50 energy infrastructure projects with an aggregate investment of over $15 billion – including involvement in the development, construction or operation of nine liquefied natural gas projects worldwide. Ownership of the company's initial projects was consolidated in March 2006 to take advantage of project portfolio diversification, economies of scale and greater access to capital, and to offer multiple receiving points to customers. NorthernStar Natural Gas’ projects, when complete, will provide natural gas suppliers with direct access to major West Coast demand centers, and provide the region with direct access to a low-cost, reliable source of new gas supply. Clearwater Port will convert an existing oil-drilling platform – located 12.6 miles off-shore from Oxnard, California – into a safe, state-of-the-art receiving/regasification terminal with capacity of 1.2 Bcfd, for providing Ventura County and California with safe, affordable access to clean-burning natural gas. It is expected to begin operations as early as 2009.

About California & LNG
The need for increasing supplies of clean-burning natural gas has been established by independent experts ranging from the California Energy Commission to former Federal Reserve Chairman Alan Greenspan. California now imports more than 85 percent of its natural gas from outside the state. Demand in California and the rest of the country is growing, and because California is at the end of the existing pipeline route, the state’s existing supplies from traditional out-of-state sources are becoming more limited.

For more than 40 years, liquefied natural gas has been safely delivered around the world, via more than 40,000 ocean voyages covering 60 million miles – to places like Boston, Belgium and Tokyo – without a single maritime incident resulting in a major release or injury. Natural gas is commonly used in homes and businesses for heating, cooking and other needs.

###

Media Contact for Clearwater Port: Tom Eisenhauer, 323-934-2600

The net proceeds of the notes will be used to fund the development of NorthernStar's existing LNG projects in Oregon and California, as well as potential new opportunities. To date, the company has already expended in excess of $35 million on furthering the development of its existing terminal projects: Bradwood Landing located on the Columbia River in Oregon, and Clearwater Port located on an existing oil platform 12.6 miles offshore of Oxnard, California.

Both projects, if completed on schedule, are expected to be the first operating LNG terminals in their respective markets. At this time, Bradwood Landing is the only LNG terminal project in the Pacific Northwest that has advanced to the final stages of the Federal Energy Regulatory Commission (FERC) permitting process.

Because Clearwater Port utilizes an existing platform and does not require construction of LNG storage facilities, NorthernStar believes that it can complete construction in a substantially shorter timeframe compared with other offshore terminal proposals in Southern California.

The company is currently finalizing improvements to the Clearwater Port project and preparing to file an updated application in June with the U.S. Coast Guard and California State Lands Commission.

Crystal Energy, LLC, and its wholly owned subsidiary, Clearwater Port, transferred 100 percent of their ownership to NorthernStar as part of the consolidation that took place in March of this year. Paul Soanes and Si Garrett, who were previously involved in the Crystal Energy leadership team, will continue to be actively involved in overseeing development of these projects through their roles as President and Chief Executive Officer of NorthernStar, respectively.

"This funding provides the necessary capital needed to successfully complete the development stage of our LNG projects in Oregon and California," stated Paul Soanes, NorthernStar's President. "We believe our portfolio of projects will be more attractive to potential suppliers than single project entities because we can provide them with flexibility to deliver LNG to multiple receiving points connecting to several major pipelines and West Coast markets. This competitive advantage will translate into lower costs and better services for consumers in the markets we serve," continued Mr. Soanes.

William S. Garrett, Chief Executive Officer of NorthernStar said, "Simultaneously pursuing a portfolio of LNG terminals will provide economies of scale at the development, marketing, financing, construction and operating stages. We will be able to leverage our knowledge and experience as we develop our projects to expedite the permitting process and to increase the likelihood of success for each successive project.

"The completion of this offering further enhances our competitive position. With our development funds in place, NorthernStar will move forward quickly to complete the development of its projects and position itself to have a competitive advantage in securing suppliers and project financing," added Mr. Garrett.

NorthernStar is over 35 percent owned by management, and 50 percent owned by private equity funds managed by MatlinPatterson Global Advisers LLC. The company has an experienced management team with significant project development experience, having been involved in the development of more than 50 energy infrastructure projects with an aggregate investment of over $15 billion – including involvement in either the development, construction or operation of nine LNG projects worldwide.

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

###

Media Contact for Clearwater Port: Tom Eisenhauer, 323-934-2600