It is understood that the banks still in contention for lead arranger roles include Societe Generale - which is also working as ELNG's financial adviser - ANZ Investment Bank, Arab Petroleum Investments Corporation (Apicorp), Bank of Tokyo-Mitsubishi, Bayerische Landesbank, Credit Lyonnais, HSBC Investment Bank, IntesaBci, Instituto San Paolo di Torino, Royal Bank of Canada, Royal Bank of Scotland and WestLB.

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. The international banks have been asked to underwrite $200 million each, with a final take of $70 million. The international tranche will have a maturity of 15 years, and the domestic loan will be for 12 years.

Bankers say that the main reason for some of the original bidders being eliminated was their reluctance to commit to the relatively high final take. However, these institutions are expected to participate in the deal at a later stage as sub-underwriters. They include ABN Amro, BNP Paribas, Credit Agricole Indosuez, ING Bank, Mizuho Financial Group and Sumitomo Mitsui Banking Corporation.

'Having such a strong sub-underwriting group would play an important part in reducing the syndication risk,' says one banker following the deal.

ELNG is owned by BG Group of the UK, Edison International of Italy, Egyptian General Petroleum Corporation, Egyptian Natural Gas Holding Company and Gaz de France (GdF). The project's first train, under construction at Idku, is scheduled to start production in 2005. Its output of 3.6 million tonnes a year will be purchased by GdF. ELNG says it aims to have a second train in operation in 2006.