Transborders Energy (TBE) Director Daein Cha presented at the 2018 CWC Japan LNG & Gas Summit (Tokyo, Japan) on the topic of “Financing: Exploring New Trends & Business Models in Project Finance.”
“When considering bankability of LNG projects, TBE considers that the key factors are (1) low lifecycle project cost, (2) underpinning by foundation LNG buyers, and (3) minimising bankability requirements of LNG projects.”
“Regarding low lifecycle project cost, TBE’s FLNG projects are predicated to achieve a breakeven LNG price (Freight On Board; FOB) of USD 6.5 / MMBtu from offshore Australia with intent to serve the traditional Asian LNG markets. To achieve the breakeven LNG price target of USD 6.5 / MMBtu (FOB), TBE deploys a pre-determined low-cost 1 million ton per annum LNG producing FLNG development concept on discovered but stranded gas resources that fit its concept.
“Regarding underpinning by foundation LNG buyers, this continues to be inevitable for enabling LNG projects. Our role as developers of LNG projects is to deliver low-cost projects for enhancing the ability to supply LNG on competitive and/or flexible terms. We are also keenly aware of the LNG buyers’ desires to execute LNG sale and purchase contracts that have shorter duration and smaller volumes than those entered into for underpinning large scale LNG projects.”
“TBE’s project development objective is to minimise the requirements for our FLNG projects to be bankable. We focus on (1) delivering low lifecycle project cost, (2) securing foundational LNG Buyers with high creditworthiness, and (3) utilising commercial and financial arrangements such as facility leasing to share and allocate project risk sharing among a wider range of stakeholders.”
The 2018 CWC Japan LNG & Gas Summit gathered over 200 attendees, 9 sponsors and featured presentations from the Japanese Government, major Japanese LNG companies and several LNG suppliers.