American International Petroleum signs exclusive agreement with Coastal Energy to market its paving asphalt production.

NEW YORK--(BUSINESS WIRE)--June 25, 1996--AMERICAN INTERNATIONAL PETROLEUM CORPORATION (NASDAQ:AIPN), announced today that it has signed two agreements with Coastal Refining and Marketing, Inc. ("Coastal"), a unit of The Coastal Corporation, regarding terminalling and marketing conventional and polymerized asphalt.

The first agreement relates to utilizing the Company's facilities to provide, for a fee, teminalling, blending an polymerizing Coastal s asphalt during the asphalt off season beginning November 1, 1996 and continuing through April 15, 1997.

The second agreement which is effective April 15, 1997 relates to Coastal's purchase and marketing on an exclusive basis, all conventional and polymerized paving asphalt produced by the Company and sold through truck racks.

Both agreements are evergreen renewable on a year to year basis. Earlier this week the Company announced it had received a $6 million firm commitment to fund the expansion and implementation of its 20,000 barrel-per-day modified vacuum distillation unit ("VDU") project at its Lake Charles, Louisiana refinery with closing on the first $2 million traunch by June 28, 1996. The VDU is already built as a stand alone unit and operates independently from the 30,000 barrels per day crude unit leased by the Company to Gold Line Refining, Ltd. The Company plans to initially operate the VDU at 7,000 to 10,000 barrels per day to produce primarily conventional paving asphalt, vacuum gas oil, and diesel. At these levels, it expects its annual revenues from the sale of the various products to range between $40 million and $50 million. As polymerized asphalt product manufacturing levels increase, revenues should be substantially higher, as should the Company's margins which, in any event, are expected to be favorable. The new facility will include a state of the art polymerizing unit capable of processing in excess of 7,500 barrels/day of polymerized asphalt. Because of recently-revised state and federal government highway specifications requiring some form of polymer modification, the demand for the longer-lasting more expensive polymerized asphalt is expected to increase.

The favorable margins are anticipated, mainly because the Company's facility has the flexibility to utilize lower-cost heavy crudes as feedstock and the ability to provide polymerized, as well as conventional, asphalt. In addition, the closest established asphalt manufacturer is located over 100 miles from the Company's facility. Most of the Company's competition in its asphalt manufacturing business will come from refiners who do not have downstream processing flexibility such as the Company's.

The above statements discussed in this news release include forward-looking statements that involve risks and uncertainties, including the timely development and acceptance of new products, the impact of competitive products and pricing, and other risks detailed from time to time in the Company's SEC reports.

American International Petroleum Corporation is engaged in oil and natural gas exploration and production in Columbia and Peru, South America, and in refining in Louisiana.

CONTACT: Denis J. Fitzpatrick

Chief Financial Officer

(800) 298-AIPC