Templars Provides Innovative Financing Framework for NLNG’s Train 7 Project

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By Olagbaju Adefemi Jackson

Lagos, NIGERIA, — Nigeria LNG Limited (NLNG) has secured $3 billion for the development of its Train 7 project.

In Oil and Gas Republic’s investigation, Templars is the legal adviser that successfully developed the investment framework for NLNG’s Train 7 expansion project.

According to the company, the $3 billion is corporate financing from a group of 31 investors, building investor’s confidence in Nigeria’s oil and gas industry. The investment will also be supported by substantial cash flows from NLNG’s existing Six Train LNG plant.

Templars disclosed that the $3 billion is a record-breaking investment strategy for being the first time ever that a multi-sourced corporate finance lending would be utilized to fund an LNG project anywhere in the world.

Templars Managing Partner Oghogho Akpata commented: “We are pleased to have played a role in creating this first-of-its-kind financing technique, which happens to be the largest financing on the continent so far in 2020. It continues a trend of Templars advising on a majority of the largest and most complex infrastructure projects in the Nigerian market, be it in the area of gas, pipelines, power, roads, ports, telecom infrastructure or petrochemicals.”

Speaking further, Partner and Finance Practice Group Head, Chike Obianwu added that; “Quite apart from its size and the uniqueness of the hybrid corporate finance technique being used on a deal of this nature, this was a standout deal for a number of other reasons…. And it is quite remarkable that the parties were able to pull this off in the middle of the COVID-19 pandemic and a particularly trying period for the Nigerian economy…. It has been a pleasure to have contributed to the success of the transaction and we wish NLNG all the best with the development of the project.”

The lenders include three export credit agencies, Export-Import Bank of Korea (KEXIM), Korea Trade Insurance Corporation (K-SURE) and Servizi Assicurativi del Commercio Estero (SACE); two regional development finance institutions: African Export-Import Bank and Africa Finance Corporation; 16 international commercial banks under an international commercial facility tranche; and 10 Nigerian commercial banks, under a Nigerian commercial facility tranche.

The Templars team on the transaction was led by Chike Obianwu and Finance partner Zelda Akindele with support from Oghogho Akpata, Senior Associate Modupe Dabiri, and Associates Benita Ogbodo, Ebuka Ogbodo and Bernard Ehigiamusor. Compliance law partner Emmanuel Gbahabo advised on environmental law and compliance issues; Senior Associate Sesan Sulaiman and Associate Promise Madubuobu advised on tax issues; whilst Disputes partners Godwin Omoaka, S.A.N. and Igonikon Adekunle together with Senior Associates Victor Igwe and Stanley Nweke-Eze provided support on complex enforcement-related issues.

A large team of lawyers from the London, Milan and Seoul offices of White & Case led by the London-based partners, Jason Kerr, David Baker, and Richard Hill acted as international counsel to the lenders.

The project is scheduled for commissioning in 2025 and will include a new liquefaction unit, an 84,200m3 storage tank, a 36,000m3 condensate tank, and three gas turbine generators. It is expected to increase NLNG’s production capacity from 22 to 30 million tonnes per annum, thereby placing the company among the top five producers and exporters of LNG in the world.

NLNG is an incorporated Joint-Venture owned by four Shareholders, namely, the Federal Government of Nigeria, represented by Nigerian National Petroleum Corporation (49%), Shell Gas B.V. (25.6%), Total Gaz Electricite Holdings France (15%), and Eni International N.A. N.V. S.àr.l (10.4%).