Latham, Herbert Smith Lead on $20 Billion Project Finance Deal in Australia

The project comprises a Western Australia offshore gas field and a near 550-mile subsea pipe through which gas will be transported to a processing facility in Darwin, in the Northern Territory. Shipments from the facility, which is expected to produce 8.4 million tonnes of LNG a year, are slated for a late 2016 start. 

 

Japan’s INPEX Corp. and France’s Total S.A. are leading the six-member joint venture Ichthys LNG Pty. Ltd., which also includes Tokyo Gas, Osaka Gas, Chubu Electric Power, and Toho Gas, in developing and operating the project. Allen & Overy and Allens have acted for the joint venture on the transaction.

 

Eight export credit agencies and 24 commercial banks—including Japan Bank for International Cooperation, Export-Import Bank of Korea, Commonwealth Bank of Australia, and Societe Generale, among others—have agreed to lend $16 billion for the project. The remaining $4 billion will be provided by the joint venture members.

 

The transaction is the largest ever project financing, according to the law firms involved, with Allens Perth partner Tim Lester saying in a statement that the deal is second only to ExxonMobil’s $14 billion financing of its LNG project in Papua New Guinea in March 2010.

 

Latham & Watkins Tokyo partner Joseph Bevash, Singapore partner Stephen McWilliams, and London partners Bill Voge and Matthew Brown served as international counsel for the lenders. Allens' Lester, along with Perth partner Ben Farnsworth and Melbourne partner Stephen Spargo, acted for the lenders on matters of Australian law.

 

The Allen & Overy team that advised Ichthys LNG Pty. Ltd. was led by Tokyo partners Aled Davies and Osamu Ito and Sydney partner Chris Rushton. Herbert Smith Freehills Melbourne partner Brendan Quinn and Sydney partner Joel Rennie served as local counsel to the joint venture.