Mozambique poised to host first FLNG project financing as Coral seeks funds.

12 Oct 2016: The 3.4-MMt/y Coral project in Mozambique is primed to be the first floating liquefaction unit that is project financed after the Eni-led consortium sent out an information memorandum and official request for commercial bank funding in September. Whether FLNG projects can attract funding using project finance structures has been debated for some time and Italian major Eni and its partners will be seeking to provide an affirmative answer, although the results will probably not be known until the first or second quarter of next year. There is no operating track record for FLNG and, while some floaters are being built, they have yet to start up. Commercial banks can be averse to exposure to risk from untried technologies. But technologies utilized are proven both onshore and in floating service (FPSOs and FRSUs) such as turret mooring, storage, arms and feed gas treating and condensate stabilization. However, the gas liquefaction process lacks offshore operational experience. But bankers believe that raising funding using limited recourse financing for FLNG is possible if the correct protections are in place (see LNG Finance, May ’16). While details on the financing have yet to emerge, it would be expected to have some form of lender protection during initial operations. This is usually provided for land-based LNG projects in the form of a sponsor completion guarantee. Please fill out the form to access article.