Bankers say the exercise, being co-ordinated by financial adviser Societe Generale, is aimed in effect at testing the market’s willingness to sign up to a completely uncovered transaction. It is understood that the option of including a portion covered by export credit agencies (ECAs) has not been ruled out, but is not the first preference of the project sponsors. ‘The main advantages of going ahead without the ECAs being involved are speed and simplicity,’ says a banker close to the deal.

Assuming it does go ahead on a fully uncovered basis, the deal is expected to consist of a $450 million loan from the European Investment Bank, to be guaranteed by international banks, $500 million-600 million raised directly from international banks, and $100 million-200 million from Egyptian banks. Institutions have been asked to consider underwriting $200 million, with a final take of some $70 million.

‘It is an ambitious target,’ says one banker looking at the deal. ‘We don’t harbour any doubts as to the quality of the credit, but there could be questions about the market’s capacity to take on the full amount.’ It is, by some considerable margin, the largest project finance deal ever put together for Egypt.

An information memorandum is expected to sent out to 12-15 prequalified banks at the end of August or in early September.

ELNG is owned by BG Groupof the UK , Edison Internationalof Italy , Egyptian Natural Gas Holding Company, Egyptian General Petroleum Corporationand Gaz de France(GdF). The first train at Idku is scheduled to come on stream in 2005, with a capacity of 3.6 million tonnes a year. GdF will purchase all the plant’s output according to a 20-year agreement reached in early 2001.