Inpex Corp. signed $20 billion in loans for its Ichthys project in Australia, helping to complete financing for a liquid natural gas venture that will supply the fuel to power producers in Japan and Taiwan.
The Japan Bank for International Cooperation, one of eight export credit agencies providing funds, is the deal's biggest lender, at $5 billion, Masahiro Murayama, Inpex's director overseeing finance and accounting, told a news conference Tuesday in Tokyo.
Mizuho Corporate Bank Ltd., Sumitomo Mitsui Banking Corp. and Bank of Tokyo-Mitsubishi UFJ Ltd. are among the 24 commercial banks participating, Murayama said.
Inpex, Japan's biggest energy explorer, and French partner Total SA approved the $34 billion Ichthys project last January and expect to start production by the end of 2016. The venture, with reserves equivalent to LNG production of 8.4 million metric tons a year for about 20 years, is among some $210 billion in such projects proposed or under construction in Australia to meet rising Asian demand for the less-polluting fuel.
Inpex, 18.9 percent owned by the Ministry of Economy, Trade and Industry, raised $6.6 billion in 2010 via a share sale in part to help fund the project. That money is among internal reserves that will pay for about 40 percent of the project, with the rest coming from the loans announced Tuesday, Murayama said.
"We now have a very clear idea of how we fund the project," he said. "We don't need to borrow any more."
The loans form the biggest ever so-called project finance facility arranged in the international financial market, Inpex said in a statement. Project financing is a method of funding whereby debt repayments are sourced primarily from the forecast cash flows of a project and security is limited to the project's assets.
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