Work is also going ahead on the financial plan for the LNG export scheme being carried out by Spain’s Union Fenosain Damietta. However, no final decision has been taken on whether to go for a project finance facility on this scheme.
The partners in ELNG are BG Groupof the UK, Edison Internationalof Italy – with 35.5 per cent each – Egyptian General Petroleum Corporationand Egyptian Natural Gas Holding Company– with 12 per cent each – and Gaz de France (GdF), with 5 per cent. GdF has agreed to purchase the entire output of the first train for 20 years. It is scheduled to start up in 2005 and produce 3.6 million tonnes a year of LNG.
‘We are getting a positive response from the market, particularly given the GdF offtake accord,’ says a source close to the project. It is understood that ELNG is looking for a 15-year uncovered facility. ‘The option of having a portion covered by export credit agencies is under consideration, but the preferred option would be for the whole facility to be uncovered,’ the source says.
Banks interested in the deal are being encouraged to bid individually, rather than to form groups ahead of the request for proposals.
The financing is expected to come to market at about the same time as the award of the engineering, procurement and construction (EPC) contract for the first train. ELNG is negotiating with Bechtelof the US about this contract. The company is also keen to start work as soon as possible on a second train at Idku (Egypt, MEED Special Report, 12:4:02).
The EPC contract for the Union Fenosa project was awarded at the end of 2001 to a joint venture of Halliburton KBRof the US and Japan’s JGC Corporation, and work is forging ahead on the site. However, Union Fenosa has yet to complete the financial model for the project. It is also not yet clear whether an international oil company is planning to join Union Fenosa on the scheme.
‘There is no present intention to bring any financing to the market,’ says a source close to the project. ‘It also may turn out that Union Fenosa teams up with a partner that does not favour the project finance approach.’
Citibankis acting as financial adviser to Union Fenosa on the scheme.