NLNG obtains financing for eight new LNG carriers

By an OGJ correspondent

NICOSIA, Jan. 29 -- Nigeria Liquefied Natural Gas Ltd. (NLNG) has secured a loan of $460 million to fund eight new LNG carriers for its shipping subsidiary, Bonny Gas Transport Ltd. (BGT).

"We have secured the commitment to funding from an international syndicate of banks," NLNG Managing Director Andrew Jamieson told OGJ. "We anticipate that the mandated lead arrangers will complete syndication in February, leading to loan execution in March."

BGT currently owns eight vessels for transporting LNG from NLNG's three available trains, with a ninth ship due for delivery next month from Hyundai Heavy Industries (HHI) of South Korea.

NLNG also has a 10th ship under long-term charter from Shell Bermuda Overseas Ltd., with an option to purchase after Jan.1, 2006.

Purchase of the new carriers is aimed at increasing the company's fleet to 18 vessels to handle anticipated output increases.

"We need the additional eight ships for planned (LNG) output increases following our decision last year to build Trains 4 and 5, which will add 8 million tonnes to our current 9 million tonnes of output," Jamieson told OGJ.

Jamieson said NLNG last month signed loan agreements for $1.06 billion with four export credit agencies, the African Development Bank, 19 international banks and six Nigerian banks to finance Trains 4 and 5. These trains are expected to be ready for start up in second half 2005 at a cost of $2.1 billion, excluding the cost of the new LNG carriers.

BGT will own four of the new carriers, which will have 141,000 cu m capacity each and are scheduled for delivery by HHI during November 2004-March 2006 at an estimated cost of $650 million. The other four new vessels will be chartered from Bergesen of Norway.

Bergesen said it would contract Daewoo Shipbuilding & Marine Engineering Co. Ltd., of South Korea, to build its 145,500 cu m vessels at a cost of $710 million, with delivery to take place in first, third, and fourth quarters 2005 and first quarter 2006.

The Norwegian firm said the annual charter income from the four ships will amount to about $100 million, but that NLNG has an option to purchase each of the four vessels at agreed stages during the contract period, the first 5 years after delivery.

HHI built two other 137,000 cu m ships for the train 3 expansion project, delivering LNG Rivers and LNG Sokoto in June and August 2002, while the third, LNG Bayelsa, will be handed over in February 2003.

Production from NLNG's third train began last November, and the first shipment departed in December for Gas Natural SDG SA of Spain under a 22.5-year contract for 2.7 billion cu m/y. Transgas of Portugal will purchase the remaining 1 billion cu m/y from Train 3, also under a 22.5-year contract.

NLNG is a Nigerian joint venture of Nigerian National Petroleum Corp. 49%, Royal Dutch/Shell 25.6%, TotalFinaElf SA 15%, and Agip SPA10.4%.

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