With costs skyrocketing around the globe, the Total-led consortium developing the Yemen LNG project is believed to be seeking investors for help with ballooning capital expenditures for the facility, which have now reached up to $4bn.
The project financing consists of a $1.44bn senior limited recourse facility that would be paid back to investors when the plant begins generating revenue and a $1.2bn loan that would be guaranteed by Total.
The $1.44bn loan will be split between three export-credit agencies, consisting of Export-Import Bank of Korea (KEXIM), Nippon Export and Investment Insurance and France’s Coface. Japan Bank for International Co-operation (JBIC) and KEXIM are together expected to provide direct loans of $360m.
The two-train liquefaction plant is currently under construction at the 20 square km site in the port city of Balhaf, on the southern coast of Yemen. If financing for the last leg of the project is secured, the project’s developers – Total 39.62%, Hunt Oil 17.22%, Yemen Gas Co. 16.73%, SK Corp. 9.55%, KOGAS 6%, Hyundai 5.88%, and General Authority for Social Security and Pensions 5% – expect the project to achieve commercial operation by the end of 2008 or early 2009.
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