ETAP Postpones Hasdrubal Gas Project Financing
Tunisia’s state-owned Enterprise Tunisienne d’Activités Pétrolières (ETAP) has postponed the project financing of its Hasdrubal offshore gas project as a result of the absence of firm consensus pricing that would satisfy banks’ profitability targets, MEES learns. The company had been close to completing the $400mn financing for its share of the $1.3bn project (MEES, 17 November), but decided to suspend it until the financial markets stabilize. ETAP has already funded most of the project, which is more than 80% completed, from its own resources and via a bridge loan, and can continue along this path, although other options remain on the table, such as using the African Development Bank (ADB) and Tunisian banks. Under the postponed project financing structure, the African Development Bank had agreed to provide up to $150mn, reducing the international bank tranche to $250mn.
In August 10 international banks had been expected to sign up for the transaction, and financial close was scheduled to be finalized in October (MEES, 11 August). However, as the credit crunch started to worsen in September, bringing global interbank lending to a virtual standstill and thus cutting off access to funds, the list of potential lenders was whittled down to five or six international banks. Margins and fees have shown an across-the-board rise as a result of the current crisis (MEES, 3 November) and delays in closing financings are also becoming more commonplace. However, some bankers suggested that they managed to get credit committee clearance for the Hasdrubal transaction, but that ETAP balked at the price. “I think the sponsor wanted margins of around 100-150 bps, but banks are saying that they won’t look at anything under 200 bps,” said one banker, noting that many lenders must pay more than 100 bps to fund themselves. “Gone are the days when we could make corporate loans as low as 10-12 bps,” he added.
Hasdrubal field construction is advanced, with start-up due in March 2009. ETAP, which is being advised by APICORP, had started to seek funding for its portion of the project last year after securing a $150mn corporate facility from Citibank (MEES, 8 October 2007). Hasdrubal will be operated by BG, which is funding its share of the project from its cash resources. It is one of a number of important developments that are due to be completed this year and next as Tunisia pushes ahead with plans to raise gas output (MEES, 23 June). Netherlands-based Heerema construction announced in May that it had completed the construction of Hasdrubal’s oil and gas platform (MEES, 2 June). The project also includes new gas treatment and LPG production facilities. The field’s development will commercialize estimated reserves of 78mn barrels of oil equivalent, with expected output pegged at 1 bcm/year of gas and 150,000 tons/year of condensate. The Hasdrubal platform is installed in 60ms of water, some 110km off the southeast coast of Tunisia near the Libyan border.
Copyright MEES 2008.
