- Region: Oceania
- Energy and Natural Resources
- Overseas Investment Loans
December 25, 2013
The Japan Bank for International Cooperation (JBIC; Governor: Hiroshi Okuda) signed today a loan agreement totaling up to USD159 million (JBIC portion) with Tokyo Gas Co., Ltd. (Tokyo Gas). The loan is cofinanced with private financial institutions, with the overall cofinancing amount reaching USD265 million.
This is one of the world's largest-scale liquefied natural gas (LNG) projects where Tokyo Gas, through its wholly-owned subsidiary Tokyo Gas Gorgon Pty Ltd (TGG) in the Commonwealth of Australia, and five other companies comprising Chevron Corporation (Chevron), Exxon Mobil Corporation, Royal Dutch Shell Plc, Osaka Gas Co., Ltd. and Chubu Electric Power Co., Inc. jointly develop large-scale gas fields including Gorgon and Jansz fields, off the northwest coast of the state of Western Australia and transport gas through undersea pipelines to a liquefaction plant on Barrow Island located in the same state. The plant is expected to produce and sell up to 15 million tons of LNG annually from the year 2015. This loan will finance TGG for developing this Project in which TGG has a 1.0 percent interest. The aggregate amount of LNG which Tokyo Gas will offtake from this Project is 1,250 thousand tons per year (1,100 thousand tons purchased from Chevron, and 150 thousand tons corresponding to TGG's participating interest.).
The global demand of LNG is projected to increase due to growing demand in emerging countries and heightened environmental awareness. In Japan, there have been increasing hopes for a stable supply of LNG in recent years. However, LNG supply from Indonesia, Japan's major LNG supply source, is expected to decrease significantly, and the renewal time is approaching for a number of long-term purchase contracts with other countries. This prospect has made Australia, with its abundant gas reserves and political and economic stability, increasingly important as a supply source of LNG. In this context, supporting Japanese companies for developing energy resources in this Project has a significant importance for securing a stable LNG supply to Japan.
This loan will support a Japanese gas utility's participation in an energy resource development project in an important energy resource supply country and securing a stable supply of LNG. As Japan's policy-based financial institution, JBIC will continue to support Japanese companies for acquiring interests in natural gas and crude oil and for developing these resources.