Bonny Gas Transport (BGT) Secures $160M Loan Facility for new built Ships

Bonny Gas Transport Limited, a wholly owned subsidiary of Nigeria LNG Limited (NLNG), has secured a $160 million 10-year loan facility from a syndicate of banks led by Credit Suisse First Boston (CSFB). CSFB also acted as adviser to Bonny Gas Transport Limited and developed the structure and the implementation for the loan facility.

BGT's Vice-President, and Managing Director of NLNG, Mr Andrew Jamieson said the loan will cover a considerable proportion of the costs of two new 138,000 cubic metre Liquefied Natural Gas (LNG) ships, required for the additional LNG volumes to be produced by the NLNG Train 3 Expansion Project, which is expected to come on stream in the fourth quarter of 2002. These ships are being built by Hyundai Heavy Industries of Korea and are scheduled to be delivered in August and September 2002.

The Expansion Project consists of the installation of a third LNG train, of identical design to the two trains in the Base Project and LPG processing facilities to enable the plant to process 100% associated gas and produce 1mpta of LPG. This will contribute significantly to reducing flaring in the Niger Delta area of Nigeria. The contract for the expansion project was awarded in March 1999 to a consortium of Technip/Snamprogetti/Kellogg/JGC (TSKJ), the same consortium that implemented the Base Project. The Train 3 Expansion Project will increase the total amount of LNG sold under long-term contracts from 7.15 billion cubic metres per annum to 10.85 billion cubic metres per annum. The existing buyers of Nigeria's LNG are ENEL of Italy, Botas of Turkey, Enagas of Spain, Gaz de France and Transgas of Portugal. The additional volumes from the third train will be sold to Enagas and Transgas.

Bonny Gas Transport Limited, a Bermuda based company, will own the two new vessels and charter them to NLNG to deliver LNG to its buyers. At present Bonny Gas Transport Limited owns four LNG vessels; LNG Bonny, LNG Finima, LNG Lagos and LNG Port Harcourt. All four vessels are chartered to NLNG to deliver gas to its buyers.

NLNG also has three vessels; LNG Edo, LNG Abuja and LNG Delta, on long term charter from Lachmar and Shell Bermuda Overseas Limited.

Leader of the BGT team and Deputy Expansion Coordinator of Nigeria LNG Dr. Funmi Coker pointed out that the loan which is non-recourse to NLNG and its Shareholders further confirms the confidence reposed in viability of the LNG Project.

The Group Managing Director of Nigerian National Petroleum Corporation (NNPC) Mr Jackson Gaius-Obaseki lauded this development as this is the first commercial loan without government or parent company guarantees in a long time. He said this represents a strong vote of confidence in the country and its oil and gas industry, and a firm foundation for third party financing.

Nigeria LNG Limited which commenced operations in October 1999 is owned by the Nigerian National Petroleum Corporation (49%), Shell (25.6%), Cleag (Elf) (15%) and Agip (10.4%).

Management
December 29, 1999