Australia LNG project seeks $20 billion in financing
(Reuters; May 25) - Japan's Inpex Corp. and France's Total are seeking $20 billion in what could be the world's largest project-finance loan for their Australian LNG project, underscoring investor appetite for high-quality resource projects amid global financial turmoil, sources said. Inpex, operator of the Ichthys LNG project, has committed sales contracts, largely with Japanese utilities, making the project attractive to investors.
Groundbreaking was May 18, with production expected in late 2016. The $34 billion project will have an initial capacity of more than 1.1 billion cubic feet of gas per day and 50,000 barrels per day of liquefied petroleum gas. Inpex owns 72.8 percent and Total 24 percent of the project. Lenders are trawling through a 500-page debt memorandum ahead of a bank presentation in Sydney on May 31. Responses are due June 22, and the sponsors are aiming to sign the loan by the end of the year, sources said.
Ichthys lenders include Japan Bank for International Cooperation, Australia's Export Finance & Insurance Corp, France's Coface, Export-Import Bank of Korea, K-Sure and Nippon Export & Investment Insurance, sources said. The government export credit agencies will provide $5 billion to $6 billion in direct loans, as well as insurance cover for at least half the remaining $14 billion to $15 billion. This would leave $7 billion to $7.5 billion to be raised in the commercial bank market.