NEXI provides insurance for Tangguh LNG project

By Romel S. Gurky

Nippon Export and Investment Insurance (NEXI) said on Monday it has decided to provide insurance for debt guarantee provided by LNG Japan Corporation for the Tangguh LNG Expansion Project in Indonesia.

Located in Papua Barat province, Indonesia, the existing Tangguh LNG facilities of two trains are producing 7.6 million tons of LNG per annum. The Tangguh Expansion Project will add 3.8 million tons of annual production capacity by constructing a third LNG process train. About a 46 percent interest in the project is held by LNG Japan and other Japanese partners. Also, about 25 percent of LNG produced yearly from the new train will be purchased by the Kansai Electric Power Co, Inc.

The Tangguh Expansion Project is significant for Japan in terms of ensuring a stable supply of energy, as Japan will purchase part of the LNG produced by third process train which is largely owned by the Japanese companies.

NEXI said in a statement its insurance will cover political-risk losses suffered by LNG Japan in guaranteeing loans provided by commercial banks including Japanese banks to finance the Tangguh Expansion Project.

NEXI also provided insurance for LNG Japan?s guarantee in November 2007 for commercial bank loans provided to construct the two trains of the Tangguh LNG facilities.

As Japan?s export credit agency, NEXI said it will continue to actively support projects contributing to a stable energy resource supply to Japan and promoting expansion of overseas business by Japanese companies.

Editing by Reiner Simanjuntak