Case study: Yamal LNG

Portland acted as ECA Advisor to a number of ECAs including China Development Bank (CDB), China Eximbank (CEXIM), SACE, BPI (COFACE), JBIC, EXIAR, Euler Hermes and EKN on the US$19 billion limited-recourse debt financing for the Yamal LNG project in the Western Siberia region of Russia.The project comprises the development of an offshore gas field connected to a floating gas processing, LNG liquefaction, storage and offloading vessel located above the field with a capacity of 3.5 million tonnes per annum.

The project involves the greenfield development of an onshore gas field, three LNG liquefaction trainswith a total capacity of 16.5 million tonnes per annum, LNG storage, related port infrastructure and a specialist “ice class” LNG shipping fleet. The project sponsors are Novatek OAO, TOTAL SA, CNPC and the Silk Road Fund. LNG output is fully contracted to long term LNG offtakers in Europe and Asia.

The Portland team of Geoff Knox, Harry Philp and James Benbow were responsible for advising the ECAs on all financial aspects of the project including:

• Assisting in financial structuring and negotiation of the term sheet.
• Working with the market, technical, transportation and insurance consultants.
• Running the financial model on behalf the ECAs and conducting sensitivity analysis and breakeven analysis for the project, with particular reference to crude and gas benchmarks and FX risks.
• Assisting the ECAs with their credit approval processes.
• Assisting with negotiation of loan documentation.

The transaction closed in Q4 2016 with CDB and CEXIM. SACE, BPI (COFACE), JBIC, EXIAR, Euler Hermes and EKN ecceeded to the financing in 2017.

The transaction was voted 2016 EMEA Oil & Gas Oil & Gas Deal of the Year by Euromoney

To discuss this further, contact Geoff Knox at geoff.knox@portlandadvisers.com