Anadarko seeks to raise US$14B+ for Mozambique LNG project
Anadarko Petroleum is seeking to raise a record $14-$15 billion from banks and export credit agencies for its huge liquefied natural gas (LNG) project in Mozambique, sources close to the matter said.
Fast-growing gas demand from China and Southeast Asia is reassuring export project developers sitting on huge untapped gas discoveries in Mozambique and elsewhere that the market cycle is turning after three years of low prices.
The full amount would be the largest loan ever in the LNG sector.
French bank Societe Generale, the financial adviser on the $20 billion Mozambique LNG project, has already received interest for a combined $12 billion in cover and direct lending from export credit agencies (ECAs) in China, South Africa, Italy and Japan, one of the sources said.
The ECAs include Export-Import Bank of China, Export Credit Insurance Corporation of South Africa, Italy’s Sace and Japan’s Nippon Export and Investment Insurance, the source said.
Societe Generale will launch a global roadshow on May 21 to test demand among commercial banks.
ECAs typically provide large government-backed loans or insurance to support exports and domestic companies in other countries.
Asian and Chinese ECAs in particular have provided billions of dollars in loans and cover to Africa’s largest energy and infrastructure projects in recent years, paving the way for additional commercial bank financing.
“There’s enough meat on the bones of the project in terms of supply deals to start sounding out banks,” the first source said.
In all, Anadarko has agreed commercial terms including volume and price for 5.1 million tonnes per annum (mtpa) of LNG supplies from Mozambique, closing in on the 8.5 mtpa target needed to trigger its final investment decision on the project.
Anadarko Petroleum spokeswoman Helen Wells confirmed the company had engaged with ECAs to negotiate the terms and conditions of project financing.
“Our target is to raise financing equivalent to approximately two-thirds of the expected capital costs, which, if successful, would represent the largest project financing ever in Africa and one of the largest globally for a non-OECD country,” Wells said.
The U.S. oil major aims to build from scratch a 17,000-acre liquefaction complex in Mozambique’s remote north to chill gas pumped from the Golfinho/Atum fields in its Area 1 deepwater block, 16.5-kilometres (10 miles) offshore.
It will produce 12.88 mtpa of LNG in its initial phase, which can be expanded to 50 mtpa.