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Fitch gives Peru LNG negative outlook

PERFORMANCE US-BASED Fitch Ratings says its outlook for operated by the Argentinian firm Pluspetrol.
Peru LNG (PLNG) is negative, owing to the Meanwhile, the onshore feedstock comes
consortium’s weaker operational performance, from fields in the Cusco region that are being
which stems from a decline in world prices for developed by YPF, Argentina’s NOC, and Rep-
natural gas. sol of Spain. Gas from these sites flows through
“Fitch believes lower international gas prices a 34-inch (860-mm) pipeline that follows a 408-
should result in a slower deleverage trajectory for km route from Chiquintirca, a town in the Aya-
Peru LNG than initially expected for the next few cucho region, to the LNG plant. This facility also
years,” the firm said in a statement. includes a storage depot with two 130,000 cubic
The agency also stressed, though, that Peru metre tanks.
LNG’s ratings had found some support on the PLNG’s $4bn terminal is capable of turning
strength of its gas buyer, Royal Dutch Shell (UK/ out 4.45mn tonnes per year (tpy). Its output
Netherlands). “Fitch estimates that PLNG’s levels have been affected by several spills and
production represents 3-5% of Shell’s global shutdowns along the pipelines that transport gas
integrated gas sales. In addition, Shell is PLNG’s from the Camisea fields in recent years.
second largest shareholder,” it explained. The decline in world oil and gas prices has
PLNG is controlled by US-based Hunt Oil reduced PLNG’s payments to the government
with a 50% share, Shell with 20%, SK Group this year, Fitch said. It stressed, though, that it
(South Korea) with 20% and Marubeni (Japan) still expected Lima to earn a significant amount
with the remaining 10%. Shell is contracted to of money from LNG production.
buy all the output from the Peruvian plant on a “The government still stands to receive
free-on-board (FOB) basis. between $100mn and $150mn annually over the
The consortium’s liquefaction plant is located medium term related to both natural gas produc-
in Pampa Melchorita, on the Pacific coast. It tion and ... associated liquids from Block 56 in
started operating in 2010 and handles produc- the Camisea field,” the agency said.
tion from onshore and offshore fields. “PLNG consumes approximately 50% of
The offshore feedstock comes from the giant Camisea’s natural gas production, exporting to
Camisea field, which is believed to contain around international markets almost all of its produc-
11 trillion cubic feet (312bn cubic metres) of gas. tion, contributing to the country’s monetisation
They became operational in August 2004 and are of its liquid resources,” it added.™

ADIA sovereign wealth fund buys into Cheniere

INVESTMENT THE Abu Dhabi Investment Authority (ADIA) Cheniere Energy Partners to Brookfield Asset
– the emirate’s main sovereign wealth fund – has Management’s infrastructure unit, as well as to
disclosed a 5.05% stake in US LNG exporter its own Blackstone Infrastructure Partners unit.
Cheniere Energy. The disclosure came in a Bloomberg has reported, citing sources familiar
September 14 filing with the US Securities and with the matter, that the deal involved a $34.25
Exchange Commission (SEC). per unit sale price, which puts its overall value
The fund’s interest in Cheniere, the US’ at around $7bn. The stake will be split equally
Cheniere is the US’ leading producer of LNG, consists of around between Blackstone and Brookfield, with each
largest LNG exporter. 12.7mn shares and is valued at roughly $615mn, thus owning almost 21% in Cheniere Energy
based on Cheniere’s trading price. According Partners upon the deal’s completion by the end
to Bloomberg, this makes it the fourth-largest of the third quarter of 2020.
shareholder in the US company. Cheniere itself owns a 48.6% interest in
ADIA owns almost $580bn worth of assets Cheniere Energy Partners. The limited part-
and is the world’s third-largest government nership has no involvement in Cheniere’s other
wealth fund, according to the SWF Institute. liquefaction plant, Corpus Christi LNG in Texas.
The fund’s acquisition has emerged as a major Separately, Cheniere said on September 15
stake in Cheniere Energy Partners, a limited that it had upsized and priced an offering of
partnership created by Cheniere to develop and senior secured notes due in 2028 from the ini-
operate the Sabine Pass LNG terminal, as well as tially announced $1bn to $2bn. The offering is
to act as a capital-raising vehicle, and which is expected to close on September 22.
also in the process of changing hands. The LNG producer’s share price rose above
In late August it emerged that Blackstone $50 on September 16, after news of the ADIA
Group is selling its stake of roughly 41% in stake emerged earlier that day.™

Week 37 18•September•2020 www. NEWSBASE .com P13