The U.S. Export-import Bank has approved a financing package to help Algeria's state owned Sonatrach refurbish and hike capacity of a natural gas liquefaction plant at Skikda, Algeria.
Eximbank approved a repayment guarantee to cover the sale to Sonatrach of U.S. equipment and engineering services by Sofregaz U.S. Inc., Houston, Sofregaz is an engineering and construction subsidiary of Gaz de France.
The bank said the Algerian hydrocarbon sector generates more than 96% of Algeria's export earnings and 55% of total government revenue. Sonatrach will refurbish and expand three of its four liquefaction plants to meet recently signed long term LNG sales contracts. Sonatrach estimates the total project will cost $2.2 billion.
THE BANK'S ROLE
Eximbank since 1967 has approved $1.2 billion in authorizations for Sonatrach, and current exposure is $307 million.
The bank will guarantee repayment of $42.5 million of the $50 million Sofregaz contract price. To meet export credit competition from other countries, the bank also will guarantee financing for local costs equal to 15% of the contract price, or $7.9 million.
The bank also is guaranteeing repayment of a loan for the purchase of $67.4 million of gas separation equipment and services from Air Products & Chemicals Inc., Allentown, Pa.
Air Products will provide equipment and engineering services for construction of a helium separation plant adjoining the LNG plants at Bethioua on the west coast of Algeria. It will build the plant, train operators, and oversee operation.
Eximbank will guarantee repayment of a $59.2 million loan from the Private Export Funding Corp. to Helios Spa of Arzew, Algeria, a joint venture owned 51% by Sonatrach and 49% by Helap, which is jointly owned by subsidiaries of Air Products and Air Liquide of France.
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