L&L Partners acts as counsel in international liquified natural gas project financing deal worth USD 16 billion

New Delhi, January 6: L&L Partners acted as counsel to Total S.A. (Total), Oil India Limited (OIL), Bharat Petroleum Corporation Limited (BPCL), Oil & Natural Gas Corporation Limited (ONGC), and their affiliate entities, on a landmark USD 16 billion financing of Mozambique’s first onshore liquefied natural gas project which is being developed in Area 1 offshore of Rovuma block in Mozambique (Project) at an estimated initial Project cost of USD 24.1 billion. 

This is the largest project financing transaction and biggest foreign direct investment in entire Africa, and the completion of this Project holds global strategic significance towards fulfilling energy sufficiency of many countries, including that of India, L&L Partners said in a statement. 

The initial set of finance documents have been signed by Total, BPCL, OIL, other offshore consortium members and the finance parties to tie up the funding from the senior lenders, and the Firm continues to advise Total and the Indian entities towards achieving full financial close and on other aspects of this transaction, including advising on the necessary regulatory approvals required to be obtained by the Indian entities, it said.

The Project is a world-scale integrated LNG project with approx. 75 trillion cubic feet of recoverable natural gas, and has a reputable sponsor and concessionaire consortium. 

Total, which is the operator’s parent entity and one of the sponsors with 26.5% stake in the Project, is a French multinational integrated oil and gas company, and one of the seven ‘Supermajor’ oil companies in the world. BPCL, ONGC and OIL, which are the three Indian sponsors holding in aggregate 30% stake in the Project through their affiliate concessionaires, are ‘ratna’ CPSEs of the Government of India, and flagship oil companies of India. 

The others sponsors include Mitsui & Co. Ltd. — one of the largest trading companies in Japan, Japan Oil, Gas and Metals National Corporation (JOGMEC) — Japanese government’s independent administrative institution, PTT Exploration and Production Public Company Limited (PTTEP) — Thailand’s national upstream E&P company), and Empresa Nacional de Hidrocarbonetos E.P. (ENH) — the national oil company of Mozambique. The concessionaire consortium had declared a final investment decision in June 2019 to undertake the initial development of the USD 24.1 billion Project. 

On the strength of the creditworthiness of the consortium, the Project has been able to finalize funding of up to USD 16 billion from senior lenders comprising of multi-lateral financial institutions, state owned public financial institutions across the globe and leading international commercial banks. 

L&L Partners advised Total, the Indian sponsors and their affiliates and was involved in all stages of the transaction, including in respect of the investments by the Indian entities into the Project, finalization of the transaction structure, seeking necessary regulatory approvals and in negotiations, finalization and execution of the various transaction documents. 

This would be one of the most complex and challenging project financing transactions globally, particularly in view of the nature of transaction structure, the multiplicity of parties and jurisdictions involved, and the security/ guarantee matrix adopted in order to comply with the regulations applicable in each jurisdiction, L&L Partners said. 

Further, the security structure had to be tailor-made in light of the restrictions imposed in relation to the existing financing arrangements of India with the World Bank, it said. The Firm continues to remain involved in all aspects in the closing of the transaction, as well as providing assistance on other strategic aspects of the transaction. Latham & Watkins LLP is the international counsel for the operator and concessionaires/sponsors on the financing of the Project.

The transaction comprised of Partners – Late Mr. Sameen Vyas, Sundeep Dudeja and Aniket Sengupta; Senior Associates -Sahil Arora and Naman Singh Bagga; Associates – Vishrut Kansal, Aditya Gupta, Samarth Sharma, Pavishka Mittal and Sakshi Singh.