Hong Kong, Tokyo, Washington, DC September, 2006 LAWFUEL – Legal News & Legal Jobs White & Case represented the project sponsors in the $2.6 billion financing of the Tangguh LNG project in Indonesia. This is the largest private sector project in Indonesia since the Asian financial crisis and also the first project involving BPMIGAS, Indonesia’s new upstream oil and gas regulator.
“The Tangguh project is the first in many respects – the largest LNG project financing in Indonesia since the Asian economic crisis, the first LNG financing successfully completed with ADB, JBIC and a syndicate of commercial banks simultaneously, the first new LNG plant financing in Indonesia in thirty years and the first financing completed under the new regulatory regime of BPMIGAS. We believe that this financing and legal framework will serve as examples for other significant LNG projects in Indonesia in the future,” says Hallam Chow, a White & Case partner in Hong Kong.
The sponsor consortium includes BP, CNOOC, INPEX, Kanematsu, LNG Japan, Mitsubishi, Mitsui and Nippon Oil.
The financing is provided under three separate tranches by the Asian Development Bank (ADB), Japan Bank for International Cooperation (JBIC) and a syndicate of commercial banks that includes BNP Paribas, Bank of Tokyo-Mitsubishi, Mizuho, SMBC, Standard Chartered, ING and Fortis. The total project cost is expected to reach $5 billion and a further $900 million in loans is expected to be completed by the end of this year.
The Tangguh plant will produce 7.6 million tons of LNG a year and has so far secured four long-term buyers: the Fujian LNG project in China, K-Power in South Korea, POSCO in South Korea and Sempra Energy LNG Marketing Corp in Mexico.
“The financing of the Tangguh Project required enormous depth of legal resources throughout Asia. The scale is large, the multitranche structure is complex, the new legal structure in Indonesia required innovative solutions and the sponsor group is diverse,” says Hendrik Gordenker, a project finance partner in White & Case’s Tokyo office. “I am very pleased to be a member of the team and coordinated effort that delivered a successful result in this pathbreaking transaction.”
In addition to Chow and Gordenker, the White & Case team included partners Sharon Hartline (Hong Kong) and George Crozer (Washington, DC).
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