A&O and Allens land roles on mammoth Australian LNG project financing

The Ichthys LNG project will produce and process gas from a field 230km off the shores of western Australia and then transport it to Darwin for extraction. It has contracts to supply fuels to power producers in Japan and Taiwain from 2016.

The $34bn Ichthys LNG project is led by oil and gas explorer Inpex Corporation as operator and majority shareholder, as well as byjoint venture partner Total. According to the companies, the project financing is the largest ever arranged in the international finance market. The deal involved eight export credit agencies (ECA) and 24 commercial banks. Loans from the ECAs include $5bn from the Japan Bank for International Cooperation.

The project’s sponsors are Inpex Corporation, Total, Tokyo gas, Osaka Gas, Chubu Electric Power and Toho Gas.

A&O advised Inpex Corporation and Total as joint venture partners, helping structure and complete the financing. The firm’s Tokyo managing partner Aled Davies led on the deal, aided by Sydney project finance partner Chris Rushton. A&O’s Amsterdam, Bangkok, Frankfurt, Hong Kong, Paris and Singapore offices also got involved in the deal.

Meanwhile Allens Linklaters advised the sponsors, led by Perth-based co-corporate finance head Tim Lester and Melbourne-based capital markets partner Stephen Spargo. Other partners on the deal included Igor Bogdanich, Grant Cathro, Adrian Chek, Ben Farnsworth, Larry Magid and Jodi Reinmuth. Allens also advised Inpex and Total on the reorganisation of the project and previous sell-downs by Inpex.

According to Lester, the project is the largest since ExxonMobil’s $14 billion financing of its LNG project in Papua New Guinea in March 2010, when Allens also advised the sponsors.

In a statement, A&O’s Davies said: “This deal will see Australia become the world’s leading LNG producer and secure long term supplies of energy for Japan at an important time post-Fukushima. The structuring and risk allocation of the deal were extremely complicated, involving a team across Asia Pacific and Europe. It is a reflection of the depth of our global expertise and international relationships with sponsors and ECAs.”