Coral FLNG Completes Financing
Eni, together with its Mozambique Area 4 partners, said December 6 that their Coral South floating LNG's "multi-sourced project financing achieved financial close for a total of $4,675.5mn".
It follows the final investment decision (FID) announced six months previously by the Italian operator, its partners and the Mozambican government on the 3.4mn mt/yr export project, June 1 2017.
The financing was provided in the form of covered loans from five export credit agencies (Italy's Sace, China's Sinosure, Japan's Ksure, South Korea's Kexim, and Portugal's BPI) and two direct loans (one provided by Kexim, the other by an unnamed syndicated 'commercial bank loan'). Eni did not divulge the size of the individual loans.
However it later told NGW that the financing agreement has been subscribed by 15 major international banks and guaranteed by 5 export credit agencies, and said it was worth noting that "this is the first project finance ever arranged in the world for a floating liquefaction venture". Project finance covers about 60% of the entire cost, added Eni; that would put the project's overall cost at about $7.8bn.
Eni though signalled that its sale to ExxonMobil of a 25% stake in Area 4 (including Coral FLNG) for $2.8bn announced this March – which represents half Eni's 50% interest – has yet to be completed.
The Italian firm stated December 6: "Eni is the operator of Area 4, holding a 50% indirect interest through its participation in Eni East Africa (EEA). In March 2017, Eni and ExxonMobil signed a sale and purchase agreement to enable ExxonMobil to acquire a 25% interest in Area 4, through EEA." It added that remaining interests in Area 4 are held by Chinese state CNPC subsidiary CNODC (20%), with 10% interests held by three companies: Mozambican state upstream firm Enap, South Korean state-run utility Kogas, and Portugal's Galp Energia.
In October 2016, BP contracted to lift all the LNG produced by Coral FLNG for a 20-year period once it enters commercial production, expected in 2022.
Worth noting is that Coral South FLNG is the only liquefaction project worldwide to have taken FID this year. Another FLNG venture looking to do the same, Ophir-led Fortuna FLNG offshore Equatorial Guinea, admitted recently that its FID target date had instead slipped into 1Q2018.
Meanwhile Eni has yet to announce start up of phase 1 of its giant Egyptian offshore gasfield Zohr, which it said would occur by end-2017, with a second larger phase due to start before the end of 2019.