The deal is made up of a $500 million uncovered international tranche, a $450 million loan from the European Investment Bank – to be guaranteed by the international banks – and a $200 million domestic tranche. Societe Generaleis acting as financial adviser to ELNG, owned by BG Groupof the UK, Edison Internationalof Italy, the Egyptian General Petroleum Corporation, Egyptian Natural Gas Holding Companyand Gaz de France (GdF).

The international banks have been asked to underwrite $200 million each, with a final take of $70 million. It is understood that ELNG is looking to assemble a lead arranging group of five-eight banks by the end of November.

‘We have no problem with the quality of the credit and the sponsors,’ says one banker following the deal. ‘But the amount has been a challenge. We would have been more comfortable with a larger arranging group and a smaller final take.’

Most major banks involved in project finance are seeking to be involved in the deal, which is recognised to have a lot of strengths, in particular the security of the gas supply and the quality of the main sponsors. The one significant absentee is Barclays Capital. The bank is understood to have finally decided against participating, although its local affiliate, Cairo Barclays Bank, is expected to contribute to the domestic tranche.

The project itself received a boost in mid-October with the announcement that the liquefied natural gas (LNG) sales and purchase agreement covering the entire output of the first train had been signed with GdF. The French company signed an initial sales agreement at the start of 2002.

The train is scheduled to start up in 2005 and will have a capacity of 3.6 million tonnes a year. The gas for the plant is coming from fields in the BG-operated West Delta Deep Marine concession. BG says a heads of agreement for the sale of the output of a planned second train is expected to be signed by the end of 2002.