Tangguh Secures Us$884 Million Of Loans

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September 13, 2007

BP Indonesia has secured US$884 million of loans for Tangguh liquefied natural gas plant. The loans will come from six foreign banks from Japan, China and Europe. The loan agreements are expected to be signed in mid October this year, BPMIGAS Deputy of Finance, Economy and Marketing Eddy Purwanto said in Jakarta on Wednesday (09/12).

The six banks were selected from 16 foreign banks that responded to BP Indonesia. BP invited 24 banks, including local ones, to finance Tangguh.

“Only 16 banks responded with offers. The others didn”t submit offers,” Eddy said.

From the US$884 million targeted, BP received offers amounting to US$4.3 billion. The offers, five times more than needed, show that business prospect in Indonesia is quite good, Eddy said. “Not to mention seeing the structure offered with 0.335% above LIBOR. It”s clear that business risk and investment climate in Indonesia are judged favorable,” he said.

The loans have the lowest interest among similar projects worldwide, including the LNG projects in Qatar, United Arab Emirates, Egypt and Indonesia. Therefore, Tangguh cost will be lower and more efficient, increasing state revenue.

“The loans don”t have any government guarantee. They are solely the responsibility of BP and its partners,” Eddy said.

The success of Tangguh financing has resulted in international awards, including Asia Pacific Petrochemical Deal of The Year 2006 and Project Finance Deal of the Year 2006, Eddy said.

Previously, BP Indonesia under the supervision of BPMIGAS completed the first phase of funding by signing US$2.6 billion of loans in August 2006.

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