EIGHT BANKS have been mandated to arrange a $1.2bn facility for Yemen LNG, an oil and gas project in Yemen that has been under development since 2005. It will be the first syndicated loan from the country.
Bank of Tokyo-Mitsubishi UFJ, BNP Paribas, Calyon, Citigroup, ING, Royal Bank of Scotland, SMBC and Société Générale scooped the mandate on the deal, after requests for proposals (RFPs) were sent out in early January. The deal is expected to launch soon.
The $1.2bn, multi-tranche loan will go to Total’s Yemen LNG to invest in the Yemen LNG project. French oil company Total is the project leader, and Hunt Oil of the US, Yemen Gas Company, SK Energy, Korea Gas Corp, the General Authority for Social Security and Pensions of Yemen and South Korea’s Hyundai Corporation are also sponsors.
The facility is split into tranches, which will be guaranteed by France’s Coface, Japan’s Nexi and Korea’s Kexim. "It’s a ground-breaking deal — the first syndicated loan out of Yemen," said a banker close to the facility.
Yemen LNG describes itself as the biggest ever industrial investment in the country, and the project has been budgeted at $4bn. It was launched in August 2005, and the possibility of a project financing loan to fund the development of oil and gas production there has been talked about since April of that year, when bankers attended presentations for the project. There was further speculation that a deal would come last July after project finance bankers hinted that they were preparing bids for such a transaction.
Yemen LNG will use proceeds of the loan to monetise gas extracted from fields in Marib in the east of the country. The borrower is also developing a natural gas liquefaction plant, pipelines, storage and port facilities. Yemen LNG has three 20 year sales and purchase agreements with Korea Gas Corp, Total Gas and Power and Suez LNG Trading, part of French energy group Suez.
The Japan Bank for International Cooperation and Kexim will also be contributing $360m to the project.
