White & Case Advises on US$20 Billion Mozambique LNG Multi-sourced Project Financing
3 min read
Global law firm White & Case LLP has advised the financiers on a landmark US$20 billion project financing of Mozambique's first onshore LNG development, Mozambique LNG.
"Mozambique LNG is the largest ever foreign direct investment into Africa and is a game changer for the Mozambique energy sector," said White & Case partner Jason Kerr, who led the Firm's deal team. "The significant project debt raised from key export credit agencies, development finance institutions and international commercial banks is a testament to the confidence of the international markets in Mozambique's oil & gas sector."
The sponsors of the project were Total E&P Mozambique Area 1, Limitada, a wholly owned subsidiary of Total SA, operates Offshore Area 1 with a 26.5 percent working interest. Co-venturers include ENH Rovuma Área Um, S.A. (15 percent), Mitsui E&P Mozambique Area1 Limited (20 percent), ONGC Videsh Rovuma Limited (10 percent), Beas Rovuma Energy Mozambique Limited (10 percent), BPRL Ventures Mozambique B.V. (10 percent), and PTTEP Mozambique Area 1 Limited (8.5 percent).
Project costs will be funded by a combination of equity, pre-completion cashflows and up to US$16 billion of senior debt facilities. The senior debt comprises a mix of ECA facilities and commercial bank facilities, and a loan facility with the African Development Bank. The project expects to achieve financial close in the third quarter of this year.
The large and complex financing will be Mozambique's first onshore LNG development, initially consisting of two LNG trains with total nameplate capacity of 13.12 million tons per annum (MTPA) to support the development of the Golfinho/Atum fields located entirely within Offshore Area 1. The project has onshore and offshore components, costs associated with the construction of facilities to be shared with the adjoining Area 4 project, and financing costs.
White & Case partner David Baker, who led the Firm's commercial team on the project, said: "Mozambique LNG is transformational for the oil & gas industry in Mozambique and will have broader socio-economic benefits for the country. The commercial arrangements are complex and have had to take into account an overarching concession, which has the possibility of multiple development and productions areas, as well as the challenges of a possible future unitized development. However, underpinning the commercial arrangements was a strong regulatory framework. The project revenues come from a broad portfolio of global off-takers on robust terms."
"Mozambique LNG represents not only a fantastic mandate for White & Case, it is also testament to our position as the leading international law firm involved in the African energy sector and major LNG projects globally," said White & Case partner Mark Castillo-Bernaus, who led the Firm's finance team on the project.
The White & Case team which advised on the transaction was led by partners Jason Kerr, Mark Castillo-Bernaus, David Baker (all London) and Paul Harrison (Tokyo), together with partners Mukund Dhar (London) and Martin Menski (Washington, DC), counsels Johanna Hayward and Tallat Hussain (both London) and Suzanne Perry (Washington, DC), and associates Henry Brendon, Gabriel Onagoruwa, Alex Wilson, Samantha Sutton, Katy Norman, Deji Adegoke, Sara Nehring (all London) and Joan Martinez and Joey Chan (both Tokyo).
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