ING Investment Bankinghas been appointed financial adviser on phases 9 and 10 of the South Pars offshore gas field development. The bank was mandated by a consortium led by South Korea's LG Engineering & Construction, which has been chosen to carry out the two-phase project by the local Pars Oil & Gas Company (POGC). The LG-led group and POGC are presently negotiating the final terms of the engineering, procurement and construction (EPC) deal (MEED 10:5:02).
The advisory mandate covers the arrangement of a multi-source finance facility to raise the estimated $1,600 million required for the project. Projects sources say the facility will be backed by the South Korean and major European export credit agencies (ECAs) and will also entail local financing for Iranian content in the project. The transaction is expected to be completed by mid 2003.
It is understood that the total amount could exceed the project cost as the financial arrangement aims to incorporate the upfront payments on ECA premiums into the finance facility.
Unlike other phases on the South Pars gas development, POGC requested bidders to submit their own financing schemes for phases 9-10. The LG-led consortium, which comprises local companies Iranian Offshore Engineering & Construction Companyand Oil Industries Engineering & Construction, secured the deal against competition from Paris-based Technip-Coflexip, in partnership with Sunfire Engineering & Management, a group of local companies.
Phases 9 and 10 will produce 2,000 million cubic feet a day of gas for domestic use, and condensate and liquefied petroleum gas (LPG) for export.
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