Liquefied natural gas is making wave around the world, fueled by economic and geopolitical factors. Most developed countries of the world is at increase of their investments in the gas industry, and leading energy companies such as Shell, Total, Petronas and ConocoPhillips are funding new plant projects. Project Finance of Liquefied natural gas plants is in recent times, wining a new forms, supported by financial models and investments. Havelet Finance Limited have an experienced teams of professionals/Angel investors ready to support your needs in long-term project finance for LNG projects.

Havelet Finance Limited offers the best financing options for Liquefied Natural gas plant projects as detailed below:

• Long-term investment loans.
• Project finance (PF) scheme.
• Credit guarantees.
• Investment engineering.
• Investment consulting.
• Financial modeling.
• Project management. etc.

Havelet Finance is actively growing all over the world. Kindly contact us to learn more about our offers for oil and projects.

Project Finance Hypothesis for the Construction of liquefied Natural Gas plants

Project Finance for large projects as liquefied natural gas such as the construction of LNG plants and regasification terminals, requires the joint efforts of many banks, companies, as well as the state, which seeks to form a favorable basis for the development of this strategic sector. Significant funds from various sources are needed to achieve long-term growth.

Long term investment of LNG plants can be carried out under a project finance scheme, which involves the establishment of a special purpose vehicle (SPV) and the allocation of borrowed funds against the future cash flows of the project. Project finance can be a good alternative to traditional corporate finance tools, given the high capital requirements and other features of facilities associated with the production and distribution of liquefied natural gas.

Project finance vs Corporate Finance

Project finance deals with utmost financing of a specific project, which must be appropriately isolated from the rest of the business activities. In the case of traditional financing, all of the company’s assets can be used to repay the debt, while in the case of PF schemes, only specific project assets serve as collateral.

On the contrary, corporate finance is characterized by the fact that lenders allocate funds to the company, and not to its specific project. If the borrower is an oil and gas company, it can get a large loan to use it for various purposes, including the purchase of LNG tankers, expansion of regasification terminals, etc. On the contrary, This is the so-called off-balance sheet financing. As for traditional financing, its cost depends on the reputation of the company, its risks, past activities, credit history and guarantees provided.

Pros and Cons of project finance for LNG plants

Without doubt, one main pros in using project finance is considered to be high financial leverage, which allows project participants to attract significantly more resources than they could receive through traditional mechanisms. Off-balance sheet financing allows companies to develop several large LNG projects, the cost of which is many times higher than the value of the initiator’s assets. The contractual structure of the PF is aimed at diversifying risks between contractors, initiators and other parties. Risk minimization is also achieved through insurance.

For local companies, this is also a unique opportunity to work together with the leaders of the global oil and gas industry. As for the disadvantages, we can mention the complexity of structuring and organizing project finance schemes, which is associated with a huge number of contracts and stakeholders. Prior to the start of the project, it is important to negotiate and agree on the terms of cooperation, including numerous legal and financial aspects. A complex structure is also considered difficult to change.

Risk management in financing LNG plants

During construction and implementation of liquefied natural gas plants, risk managements revolves around a diligent professional approach, given the technical complexity, environmental hazards and high cost of facilities of this type.

Risk management in project finance should include:

• Identification, qualitative and quantitative assessment of risks.
• Development and approval of preventive measures and alternative action plans.
• Allocation of financial resources to offset the consequences of negative events.
• Monitoring, control and implementation of the above measures.

If you are looking for funding for the construction of LNG, investment advisory, project management and financial modeling services, Kindly contact Havelet Finance Limited. We offer long-term financing for LNG projects for up to 20 years.

We are also currently structuring a convertible debt and loan financing and other project financing and international loans at of 2% interest repayable annually with no early prepayment penalties.

Website: https://www.havelet-finance.com
Email: credit@havelet-finance.com