ICBC contributes $550 million to loan syndicate for Coral South Floating Liquefied Natural Gas Project (Linked to Project ID#57394 and #57399)

On November 23, 2017, a syndicate of banks signed a $4.6575 billion loan agreement with Coral South FLNG DMCC13 for the Coral South Floating Liquefied Natural Gas Project. This loan has a maturity of 16 years. The borrower purchased credit insurance from Sinosure. Bank of China and China Eximbank each reportedly contributed $500 million to the lending syndicate, while ICBC reportedly contributed $550 million to the lending syndicate. Bank of China's contribution is captured in Project ID#57394, China Eximbank’s contribution is captured in Project ID#57399, and ICBC’s contribution is captured in Project ID#57395. The other lenders in this syndicate are: Credit Agricole, Sumitomo Mitsui Banking Corporation, Export-Import Bank of Korea, ABN Amro, BNP Paribas, HSBC, Korea Development Bank, Natixis, Societe Generale, Standard Bank, UBI Banca, Unicredit. Coral South FLNG DMCC13 is a project company and special purpose vehicle that is registered in Dubai and jointly owned jointly owned by Eni Mozambique LNG Holdings B.V. (25%), ExxonMobil Africa and Middle East Holdings B.V. (25%), CNODC Mozambique B.V. (20%), ENH Floating LNG 1 S.A. (10%), GALP Mozambique (10%), and KOGAS Mozambique (10%). The total cost of the Coral South Floating Liquefied Natural Gas Project is $8.8875 billion and it is reportedly being financed with $4.6575 billion of debt and $4.212 billion pf equity. It involves the construction of a Floating Liquefied Natural Gas (FLNG) facility off the shores of Mozambique with integrated gas treatment, liquefaction, storage and offloading systems. The Coral South Floating Liquefied Natural Gas Project was officially launched on June 2, 2017. Then, on July 20, 2019, Eni started installation works on the hull of the Coral Sul floating liquefied natural gas (FLNG) treatment and liquefaction unit that will be moored offshore in Mozambique. The hull is expected to be launched in 2020, in line with the planned production startup of the Coral South Project in 2022. Upon completion, the FLNG facility will have 6 subsea wells that connect to a floating facility capable of producing 3.4 million tons per annum (mtpa). This project seeks to monetize the gas discoveries contained in the southern part of the Area 4 Block. The Area 4 Block is located in the deep waters of the Rovuma Basin, which is located off the north-east coast of Mozambique. FLNG is a relatively new approach to exploiting offshore gas, and involves adapting existing LNG technology to an offshore, floating vessel. It makes the production, liquefaction and storage of natural gas possible at sea, unlocking gas resources from underwater gas fields previously considered uneconomic or too challenging to reach. An FLNG facility can also be re-deployed to other gas fields. The project is more than 80% complete.

Additional details

1. The Chinese project title is 科拉尔气田浮式液化天然气项目 or 莫桑比克4号区块项目. 2. For the time being, AidData relies on the lending syndicate contributions from Bank of China ($500 million, ICBC ($550 million), and China Eximbank ($500 million) that are reported by IJGlobal. AidData was not able to identify an estimate of the size of China Development Bank’s contribution to the lending syndicate. However, Reuters reports that “Chinese banks” contributed $1.75 billion to the lending syndicate, so it is possible that China Development Bank provided the remaining $200 million. SAIS-CARI records the total contribution from Bank of China, ICBC, and China Eximbank as $150 million; however, this estimate appears to be an outlier. 3. Given that CNODC has an equity stake in the SPV (Coral South FLNG DMCC13) responsible for project implementation, AidData assumes that the Chinese Government has some degree of commercial motive and codes the intent variable as ‘mixed’. 4. AidData has coded this transaction as a collateralized loan because Standard Bank was selected as the security agent (i.e. collateral agent) for the loan. When lenders take collateral as security for their loans, a collateral/security agent is often appointed to enforce rights against the collateral in the event of the borrower’s default under the loan.

Number of official sources

15

Number of total sources

31