Norske Skog ASA

Earnings Release • Dec 23, 2010

New long term power supply agreement for Norske Skog Skogn

Norske Skog has signed a long-term contract with Statkraft for supply of power

for the paper mill at Skogn in Mid-Norway. The contract secures the continued

operations at the mill, which needed a new long term power supply contract by

the beginning of 2011.

"We are very pleased with the agreement. Norske Skog Skogn is important to

Norske Skog and for the forestry industry in Mid-Norway. This will help securing

the workplaces at Skogn," says President and CEO of Norske Skog Sven

Ombudstvedt.

The new contract with Statkraft secures yearly supply of 0.8 TWh of electricity

per year until December 31, 2022. The agreement takes effect on January

1, 2011. In addition to Norske Skog, the agreement is negotiated in cooperation

with Finnfjord AS, which will secure power supply for its smelter at Finnsnes in

Northern Norway.

Most of Skogn's existing power contracts expire at the end of 2010, but a volume

of 0.3 TWh will be available in 2011 in addition to the power being delivered

from Statkraft under the new contract. This secures almost full coverage of

electricity to Skogn in 2011. Purchasing of power in the spot market is

expensive and unpredictable, and is not an alternative to a new, long-term

agreement. Because of price differences between the energy market regions in

Norway, it is not possible to use power sources from other parts of the country.

Norske Skog is into negotiations with Nord-Trøndelag E-verk (NTE) in order to

meet Skogn's total electricity volume with a new long term contract.

Norske Skog Skogn is one of the most environmentally friendly and efficient

paper mills in Europe. A strong Norwegian currency and demanding market

conditions throughout the industry means the mill needs access to stable and

secure power supply at acceptable prices to maintain operations.

Statkraft and NTE can choose to take advantage of a new government guarantee

scheme for energy intensive industry, which was passed by Stortinget (The

Norwegian Parliament) on December 17 this year. The scheme, which involves

finance guarantees by the Norwegian Guarantee Institute for Export Credits

(GIEK), reduces risk for the power suppliers. The scheme is not yet approved by

EFTA Surveillance Authority (ESA).

"The Norwegian government has worked to get the guarantee scheme in place. It is

important for Norske Skog and Norwegian industry in general, and we appreciate

these efforts," says Ombudstvedt.

Norske Skog Skogn employs 500 people. Production started in 1966. The mill

produces newsprint, with UK as the biggest single market.

Oxenøen, December 23, 2010

Norske Skog

Communications and public affairs

For further information:

Media: Finance market:

Head of Communications Head of investor relations

Carsten Dybevig Jarle Langfjæran

Tel: +47 917 63 117 Mob: +47 909 78 434

This information is subject of the disclosure requirements acc. to §5-12 vphl

(Norwegian Securities Trading Act)

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