Sponsor completion guarantees in LNG construction financing: Part II

As the world of North American LNG financings continue to evolve, OGInsights explores the use of completion guarantees in construction financings. In Part II of this two part series, we look at the conditions precedent to project completion which typically need to be satisfied for release of the completion guarantee by lenders. Construction criteria requires "substantial completion" under the EPC Contract. In addition, operational tests must...

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Sponsor completion guarantees in LNG construction financing: Part I

As the world of North American LNG financings continue to evolve, OGInsights explores the use of completion guarantees in construction financings. At a high level, the project sponsor guarantees debt service under a guarantee until the construction is complete. To the extent that a project does not reach completion (normally by a certain long-stop date), then the sponsor will be obliged to repay all of the debt under the guarantee. The provision...

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Valuera nears TDs at Inanli-1

Valeura has reached 4,145m on the Inanli-1 well (TD 5,000m, c.800m deeper than Yamalik-1). It has encountered over-pressured gas with a c.40% net-to-gross, similar to that of Yamalik-1, with gas flows - all pointing to promising results. In addition, the well has encountered more naturally fractured rock than encountered in Yamalik-1 with increased gas levels recorded at the fractured intervals. Drilling is continuing to 5,000m with an extensive...

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Petronas enables Cheniere Sabine Pass Train 6

Petronas has agreed to enter into a 1.1mtpa offtake deal with Cheniere on Sabine Pass Train 6 which should enable the train take FID shortly. With a foundation buyer now in place, Cheniere can continue with raising finance to progress the 4.5mtpa project. Under the deal, Petronas has signed up to 1.1mtpa on a FOB basis for 20 years. As common with east coast LNG contracts, the pricing will be indexed to the monthly Henry Hub price, plus a...

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SNE partners progress to FEED for Phase 1 of the development

The SNE JV offshore Senegal (Cairn 40%, Woodside 35%, FAR 15%, Petrosen 10%) has entered FEED for Phase 1 of the SNE development. The engineering contract has been awarded to the Subsea Integration Alliance (OneSubsea, Schlumberger and Subsea 7). First oil is being targeted for 2022 with an initial production rate of c.100mbopd. The exploitation plan had previously identified a total development of 500mmbbl of oil over a multi-phase development...

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DEA acquires Sierra Oil & Gas

DEA has expanded its international footprint into the Americas by acquiring Sierra Oil & Gas from Riverstone Energy. The Sierra portfolio includes the prized Zama discovery (Sierra Oil & Gas 40%, Talos Energy 35%, Premier Oil 25%) and an extensive exploration acreage position offshore Mexico. The value of the deal is reported  at ~USD500 million which provides a positive read-through for Zama of over USD300 million net to Premier. The...

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Brasse's growth halts as Faroe's Rungne well disappoints

Faroe announced in November that the Rungne well came in disappointing with only sub-commercial levels of gas found. Although encountering hydrocarbons, the estimated volumes of 12-57bcf gas and 0.5-3.9mmboe condensates will mean the discovery is non-commercial on a standalone basis. Nevertheless it could form a future tie-back to Brage or Oseberg. Faroe's exploration programme continues with Brasse East which could be another chance for Faroe...

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ExxonMobil makes 10th oil discovery offshore Guyana; resource increased to 5+ bnboe

ExxonMobil announced its tenth discovery offshore Guyana and its sixth discovery on the Stabroek Block in the past year. The Pluma-1 well encountered c.121 feet of high-quality, oil-bearing sandstone reservoir and is located c.17 miles southwest of the Turbot-1 well and follows previous discoveries on the Stabroek Block at Liza, Liza Deep, Payara, Snoek, Turbot, Ranger, Pacora, Longtail and Hammerhead. The discovery adds to ExxonMobil's previous...

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