21 March 2005 – LAWFUEL – The Law News Network – The $900 million Guangdong LNG Terminal and Trunkline Project, China’s first liquefied natural gas (LNG) import project and one if its largest gas development projects, has grabbed two more deal of the year awards. Project Finance and IFLR join the list of leading industry and regional publications that have recognized Guangdong LNG’s role as a precedent for other LNG and infrastructure projects in Asia. The first non-recourse deal in China financed purely by Chinese banks while using international financing techniques and standards, the project has been named:
“Asia-Pacific Oil & Gas Deal of the Year,” Project Finance
“Project Finance Deal of the Year,” IFLR
“Asia-Pacific Oil & Gas Deal of the Year,” Project Finance International
“Best Project Finance Deal for 2004,” FinanceAsia
“Energy & Resources Deal of the Year – China,” Asian Legal Business
Jones Day represented the project company and its sponsors, led by China National Offshore Oil Corporation and BP, from the earliest stages. Partners Peter Roberts, Emad Khalil and Bruce Schulberg headed the team of lawyers on the development and financing of the project, beginning with the selection of BP as the foreign partner in 2001.
The Guangdong LNG Terminal and Trunkline Project is located near Dapeng village, east of Shenzhen, in Guangdong Province. It will have an initial capacity of 3.7 million tones a year and 370 kilometers of trunklines stretching from Shenzhen through to Dongguan, Guangzhou, Foshan and Zhujiang to supply natural gas to city gas and power plants in Guangdong and Hong Kong. When completed, the project will supply imported gas from the North West Shelf project, Australia to Chinese customers in the Pearl River Delta area, Guangdong Province and Hong Kong.
For power-starved Guangdong Province and neighboring Hong Kong, the first LNG deliveries promise a much-needed supplement to existing fuels and, as shipments increase, a replacement for the environmentally damaging high-emissions coal which is now the staple energy source. For the PRC, the project is an administrative template for future LNG development and other large-scale infrastructure improvements. The entire Asia-Pacific region should benefit from the project’s role in awakening China’s banking sector to the possibilities of non-recourse financing.