BP, partners seek remaining funds for Tangguh LNG project
Tuesday, May 8 2007 - 03:40 AM WIB
Anglo-American energy firm BP Plc and partners will seek $880 million of loans to complete financing of the Tangguh liquefied natural gas (LNG) project in Papua, the oil and gas upstream regulatory body, BPMIGAS official said.
BP will invite Chinese banks, other international institutions and local lenders, including Bank Mandiri, to lend the funds, BPMIGAS deputy of finance and marketing Eddy Purwanto said Monday.
The loans will help a BP-led group complete Indonesia's third LNG plant, which will initially have a capacity of 7.6 million metric tons a year and cost $5 billion. In August last year, BP and partners signed a $2.6 billion loan agreement with lenders including the Japanese Bank for International Cooperation and the Asian Development Bank for the project.
“We hope to sign a loan agreement in July or August, so that we can withdraw the funds in October,” Purwanto told reporters in Jakarta. Still, “even without it, we can go ahead with the project.''
The loans are among the cheapest commercial financing in oil and gas industry. The interest rate applied to the loans, which will mature in 15 years, is 25 basis points more than the London interbank offered rate, or Libor, he said.
In August last year, BP secured a $1.2 billion loan from JBIC, as the Japanese bank is known, and $350 million from the Asian Development Bank for the Tangguh plant. The group gained financing worth $1.1 billion from seven other banks, namely BNP Paribas, ING Bank NV, Bank of Tokyo-Mitsubishi UFJ Ltd., Fortis Banque Luxembourg SA, Standard Chartered Plc, Bank of Sumitomo- Mitsui and Mizuho Corporate Bank Ltd.
BP owns 37.16 percent of Tangguh, making it the biggest investor. CNOOC, China’s largest offshore oil producer is the second-biggest, with 16.96 percent.
Other investors include Mitsubishi Ltd. and Inpex Corp. They hold a combined 16.3 percent in Tangguh. A Nippon Oil Corp. led company has a 12.23 percent stake and LNG Japan, owned by Sumitomo Corp. and Sojitz Holdings Corp. holds 7.2 percent. Japan Oil, Gas & Metals National Corp., Kanematsu Corp. and Mitsui & Co.’s Overseas Petroleum Corp. unit hold a combined 10 percent. (*)