24-05-2012

Australia Pacific LNG secures US$8.5B in project finance

Australia Pacific LNG today announced that it had secured a US$8.5 billion project finance facility for the development of the Australia Pacific LNG coal seam gas (CSG) to liquefied natural gas (LNG) project in Queensland.

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 commercial banks and US EXIM have executed finance agreements with Australia Pacific LNG for 16 and 17 year terms respectively. China EXIM has signed a commitment letter agreeing to the key terms of the project finance facility, with its signing of the definitive documentation expected to occur shortly.

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. The facility is subject to a final investment decision being taken on the second phase of the Australia Pacific LNG project. On satisfaction of customary conditions precedent, including certain government approvals, the total facility will be US$8.5 billion, which will be drawn down progressively over the downstream construction phase of the project.

Australia Pacific LNG Chairman, Mr. Grant King said, “Today’s announcement is another major milestone for Australia Pacific LNG, and paves the way for development of one of Australia’s largest LNG export projects.”

“Australia Pacific LNG’s ability to secure US$8.5 billion in project financing from Australian and international investors, evidences the strength and quality of the project,” Mr. King said.

Australia Pacific LNG CEO, Mr. Page Maxson said, “The arrangements provide an important contribution to financing; helping Australia Pacific LNG to realise its current planned investment for the project.”

“Australia Pacific LNG is developing a world class CSG to LNG project, and today’s announcement follows a comprehensive review of all social, environment and safety aspects of the Australia Pacific LNG project against robust international financing standards,” Mr. Maxson added.

While the facility is structured as non-recourse to Australia Pacific LNG shareholders, each shareholder provides a several guarantee of its shareholding percentage of the debt during the construction phase. The guarantees fall away following completion of the construction phase of the project subject to customary completion tests.

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.

The Australia Pacific LNG project is an incorporated joint venture between Origin, ConocoPhillips and Sinopec and includes the further development of CSG reserves in the Surat and Bowen Basins, a gas transmission pipeline and a multi-train LNG facility on Curtis Island, near Gladstone.