White & Case, Allen & Overy and Latham & Watkins have worked in tandem to help close the groundbreaking US$2.6bn financing of the greenfield Tangguh LNG project in Indonesia.
 
Among other 'firsts', the deal is the largest private sector project in Indonesia since the Asian financial crisis and also the first project involving BPMIGAS, Indonesia's new upstream oil and gas regulator. Finance documents were signed in Jakarta on 1 August.
 
A White & Case team, led by partners Hallam Chow and Sharon Hartline in Hong Kong, Hendrik Gordenker (pictured) in Tokyo, and George Crozer in Washington DC, advised the consortium of project sponsors. Led by energy company BP, these included CNOOC, INPEX, Kanematsu, LNG Japan, Mitsubishi, Mitsui and Nippon Oil.
 
Societe Generale acted as financial advisers for the project sponsors, with the overall project expecting to cost around US$5.2bn. This includes associated upstream development, construction of the two LNG trains, and marine infrastructure to bring gas from an offshore field.
 
The US$2.6bn loan financing includes loans from JBIC, the Asian Development Bank and a group of commercial banks including The Bank of Tokyo Mitsubishi UFJ, BNP Paribas, Fortis Bank, ING Bank, Mizuho Corporate Bank, Sumitomo Mitsui Banking Corporation and Standard Chartered Bank. An additional tranche being provided by Chinese banks is expected to be signed in the near future.
 
Singapore-based partner Nicholas Crossin led the Allen & Overy, Shook Lin & Bok team - which included consultant Simon Irvine and partner Jaspal Gillar - advising ADB and the international commercial banks on all aspects of the financing for the project, which involved an Indonesian trustee borrowing structure.
 
The US$350m ADB tranche represented its first private sector project in Indonesia's oil and gas sector. JBIC provided US$1.2bn, while the international commercial bank tranche was approximately US$1.07bn.
 
Meanwhile, the Tangguh LNG project is being developed and implemented under the oversight authority of the Indonesian governmental agency Badan Pelaksana Kegiatan Usaha Hulu Minyak Dan Gas Bumi. The Latham & Watkins team advising BPMIGAS was led by partners Clarinda Tjia-Dharmadi, Joseph Bevash and Jake Redway.
 
The Tangguh project is the largest LNG project financing in Indonesia since the Asian economic crisis, the first LNG financing successfully completed with ADB, JBIC and a syndicate of commercial banks simultaneously, the first new LNG plant financing in Indonesia in 30 years, and the first financing completed under the new regulatory regime of BPMIGAS.
 
"The financing of the Tangguh project required enormous depth of legal resources throughout Asia," said White & Case partner Gordenker. "The scale is large, the multitranche structure is complex, the new legal structure in Indonesia required innovative solutions, and the sponsor group is diverse."
 
His colleague Chow added: "We believe that this financing and legal framework will serve as examples for other significant LNG projects in Indonesia in the future."
 
The Tangguh LNG project is a major multinational development, with a lifespan of more than 30 years, to produce natural gas in the remote Bintuni Bay area in Indonesia's eastern most province of Irian Jaya Barat (Papua).
 
Producing 7.6 million tons of LNG a year, the Tangguh plant has so far secured four long-term buyers - the Fujian LNG project in China, K-Power and POSCO in Korea, and Sempra Energy LNG Marketing Corp in Mexico - and will become the third major LNG facility in Indonesia when construction is completed in 2008.