Standard Bank Plays Leading Role In Mozambique LNG Financing

Standard Bank is one of the leading financial services providers involved in the financing of up to US $15 billion for the Mozambique LNG project, led by the French multinational Total, in the Rovuma basin, whose financing documents, confirming access to the senior debt, were signed on Tuesday, July 15.

The USD 20bn cost for the total project, on which a final investment decision was taken in June 2019, includes both onshore and offshore components, costs associated with the construction of facilities to be shared with the adjoining Area 4 project, as well as financing costs.

The Total-led Mozambique LNG project will be Mozambique’s first onshore LNG development, initially consisting of two LNG trains with total nameplate capacity of 12.9 million tons per annum (MTPA) to support the development of the Golfinho/Atum fields located entirely within Offshore Area 1. The project has successfully secured in aggregate 11.1 MTPA of long-term LNG sales with key LNG buyers in Asia and in Europe.

Standard Bank has contributed a total of US $ 485 million to this operation, in addition to playing the roles of (i) Mandated Lead Arranger and Bookrunner, (ii) ECIC Covered Loan Facility Agent (and largest ECIC Lender), (iii) Onshore Account Bank, (iv) Onshore Common Security Agreement (CSA) Security Agent, (v) Offshore CSA Security Agent, (vi) CSA Security Custodian, (vii) Onshore Area 1 Shared Security Agent, (viii) Offshore Area 1 Shared Security Agent and (ix) Area 1 Shared Security Custodian.

In addition to consolidating Mozambique’s position as a major regional and global producer and supplier of LNG, this project will be the largest private investment made on the African continent.

Mozambique LNG Financing

For Standard Bank, this operation reflects its position as the leading oil and gas sector banking team on the continent in general, and in Mozambique in particular, consolidated over the years by a team of result-oriented professionals.

Standard Bank’s participation also symbolizes its commitment to leverage on the country’s potential as a future giant producer and exporter of LNG, thereby boosting Mozambique’s growth.

This is the second LNG project to be financed by Standard Bank in Mozambique, after in 2017 it provided commercial funding for the construction of the Coral Liquefied Natural Gas Floating Platform (FLNG), being the sole African Lender at Financial Close.

Total E&P Mozambique Area 1, Limitada, a wholly owned subsidiary of Total SA, operates Offshore Area 1 with a 26.5 percent working interest. Co-venturers include ENH Rovuma Área Um, S.A. (15 percent), Mitsui E&P Mozambique Area 1 Limited (20 percent), ONGC Videsh Rovuma Limited (10 percent), Beas Rovuma Energy Mozambique Limited (10 percent), BPRL Ventures Mozambique B.V. (10 percent), and PTTEP Mozambique Area 1 Limited (8.5 percent).