BP, CNOOC seek $1.3b for Tangguh: Report

BP Corp North America, a subsidiary of Europe's biggest oil company BP, and CNOOC, China's largest offshore oil company, are seeking a US$1.3 billion (HK$10.14 billion) loan to develop the Tangguh liquefied natural gas project in eastern Indonesia, a banker close to the deal said as reported by Bloomberg.

BP and CNOOC will be guarantors for the loan and have appointed Societe Generale as their financial adviser.

SG has sent out a request for proposals to banks asking for bids to be submitted by today, said a banker who received the request.

The loan is part of US$3.5 billion in financing for the project, which will cost about US$6.5 billion. The loan will feature a six to 6-year tenor and will be taken up by commercial lenders, the banker said.

The rest of the US$3.5 billion will come from the Asian Development Bank, the Japan Bank for International Cooperation and a group of Chinese lenders.

The project will build two LNG trains with capacity to produce 7.6 million tonnes per year. The development will include gas production facilities and other infrastructural facilities such as a seaport and airfield.

BP owns 37.16 percent of the project, making it the biggest investor. CNOOC is the second largest at 16.96 percent.

Other investors include Mitsubishi, Japan's largest trading company, and Inpex, Japan's biggest oil explorer. They hold a combined 16.3 percent. A Nippon Oil-led company has a 12.23 percent stake and LNG Japan, owned by Sumitomo and Sojitz Holdings, holds 7.2 percent. Japan National Oil, Kanematsu and Mitsui & Co's Overseas Petroleum unit hold a combined 10 percent stake.

The project has to be approved by BP Migas, a government agency that supervises and controls upstream oil and gas business in Indonesia. Sumitomo Mitsui Banking is the general adviser to BP Migas on the contractual and financing structure of the project. Its role is to safeguard the country's interests in the region's biggest LNG project in terms of capacity.(*)