ICBC (Asia) contributes $223.75 million USD to the covered $5.37 billion USD portion of the $20 billion USD syndicated loan for the Ichthys Liquefied Natural Gas (LNG) Project (Linked to Record ID#94647)

Project narrative

On December 18, 2012, a syndicate of 24 lenders and eight export credit agencies (ECA) — including the Industrial and Commercial Bank of China (Asia) Limited (ICBC (Asia)) — entered into a collective total of $20 billion USD in debt arrangements with Ichthys LNG Pty Ltd. — a special purpose vehicle (SPV) jointly owned by Tokyo Gas (1.575% equity stake), Osaka Gas (1.2% equity stake), Chubu Electric Power (0.735% equity stake), Toho Gas (0.42% equity stake), Kansai Electric Power (1.2% equity stake), CPC Corporation Taiwan (2.62% equity stake), Total S.A. (26% equity stake) and INPEX Corporation (66.25% equity stake) — for the $37.4 billion USD Ichthys Liquefied Natural Gas (LNG) Project. Financial close was then achieved on January 30, 2013. The $20 billion USD debt can be broken down into four substantial groupings: $5.83 billion USD of direct export facilities from ECAs; $5.37 billion USD of ECA-covered (insured or guaranteed) debt from commercial lenders; $4.8 billion USD of uncovered commercial loan debt from commercial lenders; and $4 billion USD in senior sponsor/shareholder loans. The $5.83 billion USD in ECA-issued debt carried a maturity period of 16 years and a final maturity date of January 30, 2029. Three ECAs contributed the respective amount of debt: Japan Bank for International Cooperation (JBIC) ($5 billion USD), the Export-Import Bank of Korea (KEXIM) ($680 million USD), and Export Finance Australia (EFA) ($150 million USD). The $4.8 billion USD of commercial loan debt carried a maturity period of 16 years and a final maturity date of January 30, 2029, and an interest rate of LIBOR plus a margin at and above 240 basis points (bps) during construction, to rise to 375 bps during operations, with a fee of in the mid-200 bps range. A syndicate of at least 24 banks — including ICBC (Asia) — contributed to the $4.8 billion USD commercial debt. The breakdown of lenders and their contributions is as follows ICBC (Asia) ($174 million USD), Crédit Agricole Group ($87 million USD), Australia and New Zealand Banking Group (ANZ) ($233.54 million USD), BOS International (Australia) Ltd. ($108.75 million USD), Citigroup ($100.82 million USD), Commonwealth Bank of Australia (CBA) ($553.15 million USD), Crédit Industriel et Commercial (CIC) ($130.50 million USD), Export Development Canada (EDC) ($261.00 million USD), KfW-IPEX ($76.11 million USD), Mitsubishi UFJ Lease & Finance Co., Ltd. ($92.00 million USD), Mizuho Corporate Bank, Ltd. ($750.00 million USD), National Australia Bank Limited (NAB) ($304.45 million USD), Shinsei Bank ($69.37 million USD), Société Générale S.A. (SocGen) ($38.06 million USD), Sumitomo Mitsui Banking Corporation (SMBC) ($750 million USD), Sumitomo Mitsui Trust Bank Limited (SMTB) ($100.00 million USD), the Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU) ($750.00 million USD), HSBC Bank Plc ($76.11 million USD), UniCredit S.p.A. ($95.14 million USD), and unknown lenders ($50 million USD). Record ID#94647 captures ICBC (Asia)'s contribution. The $5.37 billion USD of ECA-covered (insured or guaranteed) debt from commercial lenders carried a maturity period of 16 years, a final maturity date of January 30, 2029, and an interest rate of LIBOR plus a margin of 220 bps with a fee of 200 bps. A syndicate of 24 banks — including ICBC (Asia) — contributed to the $5.37 billion USD covered debt, with each of those lenders providing $223.75 million USD. The breakdown of lenders is as follows: ICBC (Asia), Crédit Agricole, ANZ, BOS International, Citigroup, CBA, CIC, EDC, KfW-IPEX, Mitsubishi UFJ Lease & Finance Co., Ltd., Mizuho, NAB, Shinsei, SocGen, SMBC, SMTB, BTMU, HSBC, UniCredit, Bayerische Landesbank Giro (BayernLB), ING Bank N.V., Korea Development Bank (KDB Bank), Korea Finance Corporation (KoFC), and Standard Chartered Bank. Record ID#94646 captures ICBC (Asia)'s contribution. Eight agencies provided insurance or guarantees for varying portions of this debt. These insurers/guarantors and their covered portions (if known) are as follows: Nippon Export & Investment Insurance (NEXI) ($2.749 billion USD), Atradius Dutch State Business N.V ($578 million USD), France's Compagnie Française d'Assurance pour le Commerce Extérieur (Coface) ($234 million USD), Euler Hermes Deutschland AG ($545 million USD), KEXIM ($2.92 billion USD), Korea Trade Insurance Corporation (K-Sure) ($972 million USD), EFA, and JBIC. The $4 billion USD of senior sponsor-provided debt carried a maturity period of 16 years and a final maturity date of January 30, 2029. Total provided $1.440 billion USD via a shareholder loan. Tokyo Gas loaned $63.00 million USD. Toho Gas loaned $16.80 million USD. Osaka Gas loaned $48.00 million USD. INPEX loaned $2.48028 billion USD. Chubu Electric Power loaned $29.40 million USD. Each of the owners of Ichthys LNG severally guaranteed the repayment of the loans to the lenders during the construction, with Japanese state-owned Japan Oil, Gas and Metals National Corporation (JOGMEC) taking part of INPEX's liability with respect to its portion of such guarantee, namely up to $2 billion USD. Mitsubishi UFJ Trust and Banking Corporation and Mizuho Trust and Banking Co., Ltd. also were lenders, presumably to one or both of the commercial debt. ANZ, BayernLB, BOS International, BTMU, CBA, CIC, Citi, Crédit Agricole, EDC, HSBC, ICBC (Asia), ING, KfW-IPEX, KDB, KoFC, Mizuho, MUFJ Trust, NAB, SocGen, Shinsei Bank, SMBC, Standard Chartered, SMTB, and UniCredit served as mandated lead arrangers. ANZ (upstream accounts), BTMU, CBA (intercreditor), Mizuho (downstream accounts), and SMBC (documentation and ECAs) were bookrunners for the debt. Then, on May 16, 2016, financial close was reached on a deal in which a syndicate of 10 banks — including the Bank of China (BOC) — entered into a $600.00 million USD syndicated term loan agreement with Ichthys LNG Pty Ltd. for the Ichthys LNG Project. This loan carried a maturity period of 12 years and seven months (12.583 years) and a final maturity date of December 17, 2028. The proceeds were to be used for additional financing for the Ichthys LNG Project. BOC contributed $60.00 million USD to the loan syndicate. Record ID#101787 captures BOC's contribution. Then, on June 15, 2017, financial close was reached on a deal in which a syndicate of 23 banks — including BOC, the Industrial and Commercial Bank of China (ICBC), the Agricultural Bank of China (ABC), and China Construction Bank Corporation (CCB) — entered into a $3 billion USD syndicated term loan agreement with Ichthys LNG Pty Ltd. for the Ichthys LNG 2017 Refinancing Project. This syndicated loan carried a maturity period of ten years and nine months (10.75 years) and a final maturity date of March 31, 2028; it was divided into term and revolving facilities, split between two $960 million USD tranches, two $240 million USD tranches, and one $600 million USD tranche with the same maturity. This loan was supported by Total S.A. through a put option and guarantee structure. The proceeds of this syndicated loan were to be used by the borrower for refinancing $1.2 billion USD of senior and $1.8 billon USD of subordinated loans to Ichthys. BOC contributed $150 million USD, ICBC contributed $60 million USD, ABC contributed $150 million USD, and CCB contributed $150 million USD to the loan syndicate. Record ID#94668 captures BOC's contribution. Record ID#94669 captures ICBC's contribution. Record ID#94670 captures ABC's contribution. Record ID#94671 captures CCB's contribution. Then, on June 16, 2020, a syndicate of 28 lenders and seven ECAs — including CCB, ICBC, and Bank of Communications (BoComm) — entered into a $8.2923 billion USD syndicated term loan agreement with Ichthys LNG Pty Ltd. for the Ichthys LNG 2020 Refinancing Project. This syndicated loan was divided into two tranches, each with a maturity period of eight years and six months (8.5 years) and a final maturity date of December 15, 2028: a $4.217 billion USD term loan tranche with an interest rate of LIBOR plus a margin of 180 basis points (bps) and a $4.0753 billion USD ECA-covered loan tranche with an interest rate of LIBOR plus a margin of 100 bps. Atradius, Euler Hermes, Export Finance Australia (EFA), KEXIM, K-Sure, and NEXI provided insurance/guarantees for the debt. CCB, ICBC, and BoComm only contributed towards the ECA-covered tranche. CCB contributed $300.00 million USD, ICBC contributed $100.00 million USD, and BoComm contributed $70.00 million USD. Record ID#94689 captures CCB's contribution. Record ID#94690 captures ICBC's contribution. Record ID#94691 captures BoComm's contribution. Then, on May 11, 2022, financial close was reached on a deal in which a syndicate of 21 lenders — including BOC, BoComm, CCB International Finance Limited, and ICBC — entered into a $3.500 billion USD syndicated loan agreement with Ichthys LNG Pty Ltd. for the Ichthys LNG 2022 Refinancing Project. This loan carried a maturity period of six years and six months (6.5 years). In addition to the $3.5 billion USD loan, the refinancing included a $1.300 billion USD commercial bond arranged by Citigroup, Crédit Agricole Group, Mizuho Bank, MUFG Bank, and Société Générale S.A. (SocGen). BOC contributed $59.00 million USD, BoComm contributed $70.00 million USD, CCB International Finance contributed $151.00 million USD, and ICBC contributed $46.00 million USD to the $3.5 billion USD syndicated loan. Record ID#101453 captures BOC's contribution. Record ID#101454 captures BoComm's contribution. Record ID#101455 captures CCB International Finance's contribution. Record ID#101456 captures ICBC's contribution. The purpose of the $37.4 billion USD Ichthys LNG Project was to construct offshore facilities capable of producing natural gas and gas condensate on Block WA-285-P, located in the 800-square kilometer Ichthys offshore gas field in the Browse Basin in the Timor Sea off the coast of Western Australia, to be transported, through a 889-kilometer long subsea pipeline with a diameter of 42 inches, to onshore facilities 885 kilometers from the field at Bladin Point (also known as Blaydin Point), near Darwin, Northern Territory for gas processing. The project featured 50 subsea production wells, a permanently moored 122,000 ton semi-submersible central processing facility (CPF) (the world's biggest semi-submersible platform), known as the 'Ichthys Explorer', and a floating, production, storage and offloading facility (FPSO), known as the 'Ichthys Venturer' for the offshore processing of condensates with a storage capacity of 1.12 barrels of condensate. The CPF would initially process the well flows to extract condensate and remove impurities from gas, to be sent to FPSO, from which the gas would transported via the pipeline to the onshore LNG terminal at Darwin. The onshore LNG processing facility, located on a 361-hectare site at Bladin Point, consisted of two LNG processing trains, product storage tanks, condensate and LPG plants, a 500 MW Ichthys Combined Cycle Power Plant (CCPP), and a product-load out jetty. The project was expected to produce 8.9 million tons (Mt) of LNG and 1.6 Mt of liquefied petroleum gas (LPG) annually and up to 100,000 barrels of condensate daily over its 40-year operational life. The Ichthys Field was discovered in 2000. It lies in 250-meter deep waters and contains an estimate 12.8 trillion cubic feet of gas and 500 million barrels of condensate at depth up to 4,500 meters beneath the seabed. The Ichthys LNG Project was reportedly Japan's biggest overseas investment project and first LNG megaproject. In December 2011 and January 2012, a pair of 15-year LNG sales and purchase agreements (SPA) were finalized for the sale of the LNG produced by Ichthys. In March 2012, the Australian Government issued a production license for the Ichthys LNG Project. A final investment decision (FID) for the project was made approved in May 2012. The minority shareholders of the Ichthys LNG Project were among its offtakers under 15-year agreements starting in 2017. The full list comprises Tokyo Electric Power (1.05 Mtpa), Tokyo Gas (1.05 Mtpa), Kansai Electric (800 Mtpa), Osaka Gas (800 Mtpa), Kyushu Electric (300 Mtpa), Chubu Electric (490 Mtpa), Toho Gas (280 Mtpa), Taiwan’s CPC (1.75 Mtpa), Total (900 Mtpa) and INPEX (900 Mtpa). Japanese utilities companies accounted for ~70% of the total LNG output of Ichthys. INPEX had previously owned 70% of Ichthys, but sold shares to Osaka Gas, Tokyo Gas, Chubu Electric, and Toho Gas; Total originally owned 30% before it met the conditions in an agreement between itself and INPEX that allowed it to acquire another 6% of the project. Samsung Heavy Industries (SHI) was responsible for the construction of the Ichthys CPF vessel via a February 2012 $2.71 billion USD engineering, procurement, and construction (EPC); SHI appointed ABB Ltd. to serve as the main electrical contractor (MEC) for the CPF in March 2013. Daewoo Shipbuilding and Marine Engineering (DSME) was responsible for the construction of the FPSO vessel via March 2012 $2 billion USD turnkey contract; it awarded a subcontract in January 2013 to Norwegian Piping for the supply of pipe, fittings, and flanges for the vessel. Clough, a subsidiary of Murray & Roberts, won a subcontract for CPF hook-up services in January 2016. Technip S.A. was awarded a engineering and procurement assistance contract for the FPSO topside in June 2012 and a $243 million USD contract for the preparation and execution of the offshore commissioning of the FPSO and CPF in September 2012. Aqualis Offshore won a contract for the provision of the position-keeping services for the FPSO. POSH Terasea Offshore was responsible for towing the CPF and FPSO 5,600 kilometers from South Korea to Ichthys field. In May 2017, Monadelphous won a long-term offshore maintenance service contract for the project. Wood Group Mustang was responsible, via an April 2012 contract from SHI, for the topsides detailed engineering and procurement support CPF. JKC Australia LNG Pty Ltd, a joint venture between US-based company Kellogg Brown & Root (KBR) and Japan-based JGC Corporation and Chiyoda Corporation was responsible for the implementation of the onshore facilities via a February 2012 $15 billion USD EPC contract; JKC had previously won and implemented a pre-construction front-end engineering and design (FEED) contract in January 2009. GE Oil & Gas was responsible for the provision of the onshore facility's turbines and compressors. The CH2M HILL-UGL JV was responsible for the construction and the design and supply of the balance of plant for the 500 MW Ichthys combined-cycle power plant. ABB, via a 2012 $80 million USD contract, was responsible for the supply of supply power technologies and medium-voltage drive systems for the onshore LNG processing plant. Macmahon Holdings and John Holland were responsible for civil construction works of the onshore facilities via a March 2012 $340 million USD contract. The UGL-Kentz Joint Venture was responsible for the structural, mechanical and piping construction works for the onshore LNG plant. JKC awarded a $680 million USD contract in February 2014 to Monadelphous for piping, mechanical, and structural steel works for offsite and utility areas of the onshore facility. Saipem S.p.A. was responsible for implementation of the gas export pipeline via a January 2012 $1.8 billion USD engineering, procurement, construction and installation (EPCI) contract. Mitsui-Europipe, Sumitomo Metal Industries, Ltd. (Sumitomo Metals) and Sumitomo Corporation, and Nippon Steel-Metal One were responsible for the manufacture of the pipeline. Bredero Shaw was responsible for the provision of pipeline coatings, flowlines, and tie-in spools for the pipeline and project. McDermott Australia was responsible for EPCI and pre-commissioning of subsea umbilical, riser and flowlines (SURF) on the Ichthys field and the installation of the moorings for the FPSO and CPF via a January 2012 $2 billion USD subsea contract; McDermott awarded a subcontract to Heerema Marine Contractors (HMC) for transportation and installation of installing infield flowlines, moorings, and subsea structures for the project. Technip was responsible for the provision of flexible pipes including 3 kilometers of 10 inch-diameter flexible gas export risers and 3 kilometers of 12 inch-diameter production risers via a contract awarded in April 2012. GE Oil & Gas was responsible for the provision of subsea production systems including 22 subsea production trees, five off-subsea manifolds, an integrated subsea control system, and subsea connectors for the pipeline via a January 2012 $1 billion USD contract that also included the turbine and compressor supply for the onshore facilities. Subsea 7 was awarded emergency pipeline repair contracts in July 2015. John Wood Group Plc, which provided subsea engineering and project management services during the project's FEED phase, was responsible for subsea engineering services for the integrity of the project for five years via a September 2017. Sarens Australia and Sarens Group Projects Division were responsible for sea lifting works. Programmed Maintenance Services Limited won a $100 million AUD contract to provide support to HMC with vessel management, catering, and logistical services. AG&P was responsible for the fabrication and assembly of 26 local electrical rooms (LER) and local instrumentation rooms (LIR) modules for the project via a JKC-awarded October 2012 $152 million USD contract. Johnny Cool acted as a lower tier subcontractor, providing electrical and heating, ventilation, and air conditioning (HVAC) services for numerous Tier 1 contractors, including East Arm Civil, Downer EDI Engineering, Leightons, MAS Australasia Pty Ltd, AMJV (a joint venture between AusGroup subsidiary AGC Industries Pty Ltd and Meisei Industrial Co. Ltd), UGL, Enermech, Ventia, and Monadelphous. Leighton Contractors was responsible for implementation of operations and control infrastructure, including construction and maintenance, via a $126 million AUD contract by JKC; Leighton was also contracted by JKC for the provision of temporary site facilities. Kawasaki Heavy Industries (KHI) and Laing O’Rourke Australia Construction Pty Ltd. were responsible, in a consortium and via a May 2012 EPC subcontract from JKC, for the construct four cryogenic tanks. Royal HaskoningDHV provided design verification for the tanks on behalf of the consortium KHI and Laing O’Rourke. The project was planned to begin production by the end of 2016. Project implementation commenced in May 2012. During implementation, INPEX and JKC began embroiled in a contractual dispute regarding changes in the project; JKC sought claims of $3.2 billion USD from INPEX because of delays in the project, leading to increased subcontractor costs for JKC. In October 2018, an arbitration ruling held INPEX liable for subcontractor costs, leading to KBR (30% owner of JKC) receiving $330 million USD of its claims. JKC also sought $1.9 billion USD from the companies that abandoned construction on the power station. Ichthys LNG Pty Ltd. then entered into a deed with JKC whereby it would provide interim of $757.7 million AUD ($591.4 million USD) to JKC to allow it to settle claims with its subcontractors, so long as JKC repaid the entire funding on December 31, 2020. Since that date, dispute over the payment of additional charges and further arbitration occurred in Singapore, the arbitration finding the obligation to repay the funding as valid; on April 16, 2021, INPEX filed a lawsuit against JGC of the JKC JV in Japanese courts, seeking repayment of the funding, pursuant to JGC's guarantee of the JKC repayment. In October 2021, JKV entered into a settlement agreement with Ichthys LNG, in which all court proceedings were terminated. In April 2022, JKV settled with the subcontractors over outstanding claims and disputes; with a $270 million USD payment to JKC in April 2022 and another $90 million AUD to be disbursed in March 2023. In January 2017, the project suffered a blow when CIMIC Group Limited, which had recently acquired UGL Ltd., a joint venture partner on some of the project works, announced that UGL had terminated its contract with JKC for the design, construction, and commissioning of the combined-cycle power plant that would supply the LNG export facility; at the time of this announcement, 89% of the work on the station had been completed. While INPEX publicly downplayed this impact, it was expected to delay the projection's ramp-up. GE and CH2M also departed the project. JKC, which had awarded the subcontracts to the companies, claimed parent company guarantees, seeking to have the parent companies finish the work or pay for the completion of the power plant based on their guarantees. However, JKC lost in court with a 2019 against its claim; its appeal to that ruling was dismissed in July 2020. Furthermore, the members of the KHI and Laing O'Rourke consortium began involved in a dispute with each other over pay for services; specifically, Laing O'Rourke alleged that KHI had failed to pay Laing O'Rourke 'for several months' for its work during the project and that Laing O'Rourke's attempts to resolve the issue had failed. As a result, on March 15, 2017, Laing O'Rourke demobilized and sent home its 800 workers. Laing O'Rourke's abandonment of the contract came after it suffered $187 million AUD in losses connected to Ichthys. Then, on November 29, 2017, there was a fatality among the workers at the Bladin Point construction site, causing work to temporarily pause. The project also suffered cost overruns, from its initial projected $34 billion USD cost to the $37 billion USD, as well as missed deadlines. The commissioning of all key offshore and onshore facilities for the start of production was achieved in May 2018. Commercial production and condensate and LNG shipments commenced in October 2018.