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Mozambique LNG group secures more than $14bn worth of loans
INVESTMENT
FRANCE’S Total and its partners in the Mozam- bique LNG project are reportedly gearing up to sign a credit deal worth more than $14bn with a group of banks.
Sources familiar with the matter told Bloomberg on May 20 that the Mozambique LNG consortium had been in talks with a large group of lenders on a deal worth $15bn. About 20 commercial banks have agreed to make money available for the project and will sign an agreement before the end of June, they said.
Then on May 21, Reuters published a slightly different account, quoting two sources with knowledge of the matter as saying that Mozam- bique LNG had secured $14.4bn worth of loans from a group of around 20 banks. One of the news agency’s sources reported that the parties were set to finalise an agreement in the third quarter of the year.
The reasons for the discrepancies were not clear. Total has not yet commented on the matter.
According to one of Bloomberg’s sources, the list of participating banks includes Stand- ard Bank Group (South Africa), Societe Gen- erale (France) and Rand Merchant Bank (South Africa). Societe General is acting as financial advisor for the deal, he said.
As of press time, neither Societe Generale nor Rand Merchant Bank had confirmed the news agency’s report. However, Standard Bank Group
has indicated that it will provide financing for the Mozambique LNG project.
Dele Kuti, the bank’s global head of oil and gas, told Bloomberg on May 20 that his company was “pleased to see the progress” made so far on securing final credit approvals for the project. “We have also approved large participations in Mozambique LNG’s ECIC and commercial tranches,” he said. “We look forward to signing the facilities in the next few weeks.”
The $15bn credit will cover more than 65% of project costs, which have been estimated at $23bn. Total and its partners have not said how they intend to cover the remaining $8bn.
Equity in the Mozambique LNG consortium is split between Total E&P Mozambique Area 1, with 26.5%; Mitsui (Japan), with 20%; Bharat Petroleum (India), with 15%; Beas Rovuma Energy Mozambique (a 60:40 joint venture between ONGC Videsh Ltd (OVL) and Oil India Ltd (OIL), with 10%; Mozambique’s national oil company (NOC) ENH, with 10%; and PTTEP (Thailand), with 8.5%. The Total subsidiary is serving as the operator of the project.
The partners have said they hope to begin extracting gas from Area 1 offshore Mozambique in 2024. They will process gas from the site at an onshore facility that will have two production trains, each with a capacity of 6.44mn tonnes per year (tpy). The facility will be the only onshore gas liquefaction facility in the country.™
The $15bn credit will cover more than 65% of project costs, which have been estimated at $23bn.
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w w w . N E W S B A S E . c o m Week 21 29•May•2020