Mozambique’s Coral South operators sign USD 8bn LNG project financing; all lenders revealed

06 June 2017

by Priscila Azevedo-Rocha

 

The financing for Mozambique’s USD 8bn Coral South LNG project in Area 4, off the coast of the country’s Rovuma basin, has drawn the backing of 12 non-Chinese banks in addition to the deal’s three Chinese bank leads, according to two sources close to the situation.

 

The largest tickets on the subscription, which range from USD 300m-USD 400m, were allocated to Credit Agricole, HSBC and SMBC, one of the sources said.

 

ABN AMRO, BNP Paribas, Korea Development Bank, Millennium BCP, Natixis, Societe Generale, Standard Bank, UBI Banca and UniCredit have also signed the deal, both sources said.

 

As reported by Debtwire, Bank of China, China Development Bank and Industrial and Commercial Bank of China (ICBC) are also on the syndication, leading it from their Beijing offices.

 

The financing for the project is a split between five export credit agencies (ECAs) and the 15 commercial banks. As reported, the ECAs are the Compagnie Francaise d’Assurance pour le Commerce Exterieur (COFACE), Export-Import Bank of China (Exim Bank of China), Export-Import Bank of Korea (KEXIM), Korea Trade Insurance Corporation (KSURE) and Italy-based SACE.

 

Eni is the operator of Rovuma’s Area 4 with an indirect interest in the project through Eni East Africa (EEA), which holds a 70% stake of Area 4, according to the company’s website. EEA is co-owned by Eni (35.7%), ExxonMobil (35.7%) and CNPC (28.6%). The remaining 30% stakeholders in Area 4 include ENH, Galp Energia and Kogas, which each hold stakes of 10%.

 

ExxonMobile officially came to the project last March, when it announced a cash price agreement of USD 2.8bn to purchase 25% interest of Area 4 from Eni, as reported.

 

At the time of the acquisition, a source familiar with the situation said that, “Eni’s divestment to an American company was the main reason behind the delay [in reaching financial closure], leaving uncertainty on both CNPC and Exxon Mobil’s role in making investment decisions as main stakeholders of the project.”

 

Credit Agricole is financial advisor to Eni for the Area 4 project.

 

As reported, the operators of both Mozambique’s Area 1 and Area 4 have agreed to give ENH a funded carry agreement on its capex commitments for its stakes in the country’s two LNG projects.

 

Area 4 has estimated reserves of 85 trillion cubic feet of gas held in its two gas fields, Mamba and Coral. The Floating Liquefied Natural Gas (FLNG) unit, or Coral South, will have six subsea wells directly connected to a floating facility, which alone will have the capacity to produce around 3.4 million tonnes of LNG per year, according to Eni.