BP, CNOOC seek $1.3b loan for Tangguh

BP, CNOOC seek $1.3b loan for Tangguh

Denise Kee, Bloomberg/Singapore

BP Corp. North America Inc., a subsidiary of Europe's biggest oil company BP Plc, and CNOOC Ltd, China's largest offshore oil company, are seeking a US$1.3 billion loan to develop the Tangguh liquefied natural gas greenfield project in eastern Indonesia, a banker close to the deal said.

BP and CNOOC will be guarantors for the loan and have appointed Societe Generale SA as their financial adviser. SG has sent out a Request for Proposal to banks asking for bids by Tuesday, said a banker who received the request.

The loan is part of $3.5 billion in financing for the project, which will cost about $6.5 billion. The loan will feature a six to 6.5-year tenor and will be taken up by commercial lenders, the banker said. The rest of the $3.5- billion will come from the Asian Development Bank, the Japan Bank for International Cooperation and a group of Chinese lenders.

The project will build two LNG trains with capacity to produce 7.6 million tons per year (mtpa) of LNG. The development will include gas production facilities and other infrastructural facilities such as a seaport and airfield.

BP owns 37.16 percent of the project, making it the biggest investor. CNOOC is the second-largest, with 16.96 percent.

Other investors include Mitsubishi Ltd., Japan's largest trading company, and Inpex Corp., Japan's biggest oil explorer. They hold a combined 16.3 percent in Tangguh. A Nippon Oil Corp.- led company has a 12.23 percent stake and LNG Japan, owned by Sumitomo Corp. and Sojitz Holdings Corp., holds 7.2 percent. Japan National Oil, Kanematsu Corp. and Mitsui & Co.'s Overseas Petroleum Corp. unit hold a combined 10 percent stake.