Origin, ConocoPhillips joint venture project receives $8.5bn loan | WPN World People News

Australia Pacific LNG, a joint venture of Origin, US major ConocoPhillips and China's Sinopec, has secured $8.5 billion project finance for production of liquefied natural gas (LNG) in Queensland using unconventional coal seam gas (CSG).

The project finance facility was signed by the Export-Import Bank of the United States (US EXIM), The Export-Import Bank of China (China EXIM), and a syndicate of Australian and international commercial banks, the joint venture said in a statement Thursday.

This financing provides funding for the downstream parts of the project, including the liquefaction facilities on Curtis Island near Gladstone in Queensland, and will underpin the development of Australia Pacific LNG's CSG to LNG project.

Australia Pacific LNG Chairman, Grant King said the funding "paves the way for development of one of Australia's largest LNG export projects."

The facility is subject to a final investment decision being taken on the $6 billion second phase of the project, which according to King is on track for mid-year approval.

The project includes the development of Australia Pacific LNG's substantial coal seam gas resources in the Surat and Bowen Basins, a 530 km transmission pipeline, and a multi-train LNG facility on Curtis Island, near Gladstone.

The Australia Pacific LNG project was sanctioned in July 2011. The development cost estimate of $14 billion for the first train, which is designed to start exporting in 2015, was still in place. King expressed confidence that the targets would be met.

Earlier this month The Australian newspaper reported that the Export-Import Bank of the US will provide $2.87 billion of funding. Export-Import Bank of China will also provide $2.76 billion and the remaining $2.76 billion will come from 15 commercial banks.

Commercial lenders involved in the transaction include - Australia and New Zealand Banking Group, Banco Bilbao Vizcaya Argentaria, Bank of China, Bank of Scotland International, Commonwealth Bank of Australia, DBS Bank, DNB Bank ASA Singapore Branch, Export Development Canada, HSBC Bank USA, Mizuho Corporate Bank, National Australia Bank, Societe Generale, Sumitomo Mitsui Banking Corporation, The Bank of Tokyo-Mitsubishi UFJ and Westpac Banking Corporation.

On completion, the project would be capable of producing 9 million metric tons of LNG each year.

Sinopec has already agreed to buy 7.6 million tons LNG a year and Japan's Kansai Electric Power Co. has agreed to offtake 1 million tons annually.

Source: The Asia News.Net