Narrative
Full Description
Project narrative
On April 28, 2013, a syndicate of six banks — including the Bank of China (BOC), the Export-Import Bank of China, and the Industrial and Commercial Bank of China (Asia) Limited (ICBC (Asia)) — entered into a $1,208,000,000 USD ($9,374,080,000 HKD) syndicated facility (loan) agreement with China Energy Aspiration LNG Shipping Co Ltd, China Energy Hope LNG Shipping Co Ltd, China Energy Aurora LNG Shipping Co Ltd, China Energy Pioneer LNG Shipping Co Ltd, China Energy Peace LNG Shipping Co Ltd, and China Energy Glory LNG Shipping Co Ltd. — each borrowing institutions being a Hong Kong-incorporated special purpose vehicle (SPV) that is jointly owned by China Energy Shipping Investment Co., Ltd. (CESI) (80% equity stake) and Japan's Mitsui O.S.K Lines, Ltd. (MOL) (20% equity stake) — for the Australia Pacific LNG Transport Financing (APLNG) Project. This loan carried an interest rate of 3-Month LIBOR plus a margin to be determined by the lender and a maturity period of 15 years from the date of delivery of each vessel. This loan was secured by (i.e. collateralized against) vessel sponsors' undertakings from sponsors China Shipping Development Company Limited, Sinopec Kantons, and MOL, in which each agreed to provide pro rata shareholder funding support in connection with 20% of the total project cost and to cover cost overrun up to 10% of contract price equal to each sponsors' equity commitment in respect of the agreements in excess of the total expected project cost in favor of the Security Trustee, Sumitomo Mitsui Banking Corporation (SMBC). BOC contributed $171 million USD, China Eximbank contributed $588 million USD, ICBC (Asia) contributed $171 million USD, Sumitomo Mitsui Banking Corporation (SMBC) contributed ($118 million USD), the Bank of Tokyo-Mitsubishi UFJ Ltd (BTMU) contributed $118 million USD, and Mizuho Corporate Bank, Ltd. (MHCB) contributed $39 million USD. SMBC served as Security Trustee and Facility Agent. Record ID#49907 captures BOC's contribution. Record ID#49862 captures China Eximbank's contribution. Record ID#50098 captures ICBC (Asia)'s contribution. The proceeds of this facility were to be used by the borrowers to finance commercial contracts with a total consideration of about $1,510,000,000 USD ($11,717,600,000 HKD) entered into on April 28, 2013 with Hudong-Zhonghua Shipbuilding (Group) Co., Ltd. and China Shipbuilding Trading Company Limited for the construction of six 174,000 cubic meter liquefied natural gas (LNG) vessels. MOL provided technical expertise to Hudong and a supervision team during construction. Upon completion the vessels were to be chartered by China Petroleum & Chemical Corporation (Sinopec) to transport LNG from the Australia Pacific LNG Project, a coal seam gas (GSG) to LNG project on Curtis Island, Queensland, to China under the long-term off-take sale-and-purchase agreements (SPAs) between Sinopec and APLNG. The expected delivery dates for each of the LNG carriers were on or before April 2016, July 2016, November 2016, March 2017, July 2017 and November 2017, respectively. The first vessel, 'CESI Gladstone', was delivered on October 31, 2016. The sixth and final vessel, the 290-meter long 'CESI Lianyungang', was delivered in or around early June 2018.
Staff comments
1. This project is also known as the Sinopec LNG Transport Project. 2. China Energy Shipping Investment Co., Ltd. (CESI) is a joint venture company owned as to 49% by Kantons International and 51% by China Shipping LNG, a wholly-owned subsidiary of China Shipping Development Company Limited (CSDC). CESI, which is held as to 51% by China Shipping LNG and 49% by Kantons International, is engaged in investment and management of LNG vessels. CSDC is now known as COSCO Shipping Energy Transportation Co., Ltd. 3. Kantons International is principally engaged in the trading of crude oil and oil products, the operation of crude oil terminals and their ancillary facilities, provision of logistic services including the storage, logistic, terminal services and the distribution of oil and oil products and the international logistic agency services. Kantons International is a British Virgin Islands-incorporated company and wholly-owned subsidiary of Sinopec Kantons Holdings Limited, a Bermuda-incorporated company that does business in the trading of crude oil and oil products, the operation of crude oil terminals and their ancillary facilities, provision of logistic services including the storage, logistic, terminal services and the distribution of oil and oil products and the international logistic agency services. Sinopec Kantons' ultimate controlling shareholder is state-owned China Petroleum & Chemical Corporation (Sinopec). Kantons International is a wholly-owned subsidiary of Sinopec Kantons and holds 49% equity interests in CESI which in turn holds 80% of each of the Purchasers (SPVs). 4. Mitsui O.S.K Lines, Ltd. (MOL), a company incorporated under the laws of Japan, owns 20% equity interest in each of the SPVs. 5. In 2012, China Eximbank provided a $2.759 billion USD loan (Record ID#49908) and BOC contributed $50 million USD to a $2.875 billion USD syndicated loan (Record ID#49909) for the initial APLNG Project. In 2019, BOC contributed $170 million USD (Record ID#49966), China Construction Bank (CCB) contributed $170 million USD (Record ID#95283), and the Industrial and Commercial Bank of China contributed $75 million USD (Record ID#95284) to a $2.55 billion USD syndicated loan refinancing the China Eximbank and BOC loans. Sinopec is one of the joint venture partners in the APLNG Project, owning a 25% equity stake. 6. The loan was to be repayable 15 years from the date of delivery of the relevant vessel. As the final vessel was delivered in early June 2018 and the loan was agreed to in late April 2013, AidData has coded the maturity as 20 years, 15 years added onto the 5 year difference between signing and delivery.