Financial Services Monitor: FLNG Closer to Project Financing

“Project financing for floating LNG (FLNG) projects is getting closer to being realized, tanker consultancy Poten and Partners is predicting. China’s Export-Import Bank and the World Bank’s International Finance Corp. are planning to offer funding to the Caribbean FLNG project in Columbia. Other ways of financing projects can be seen in the example of Ophir Energy, which is looking to monetise its Block R reserves in Equatorial Guinea through FLNG. Risk for commercial banks ‘Ideally, commercial banks would like to see an FLNG operating track record before they consider providing funding via a project finance structure,’ Poten said. This is due to the nascence of FLNG, which brings with it new technology risks. ‘Even if they embraced it, banks would charge a hefty premium.”