13 December, 2018
Shearman & Sterling advised a consortium led by Pertamina Power Indonesia, Marubeni Corporation and Sojitz Corporation in connection with the development and financing of the US$1.7 billion integrated LNG-to-power project located in West Java Province, Indonesia. The project achieved financial close on December 5, 2018.
This transaction represents the first-ever LNG-to-power project in the Asia Pacific region and includes the integrated financing of a newbuild 170,150 m3 floating storage regasification unit (FSRU) and a two-unit 1,760MW greenfield gas-fired independent power plant (IPP). Shearman & Sterling played a key role in the development of an innovative contractual and financing structure, which is a first in the region. The electricity produced will be sold to PT PLN (Persero), a state-owned power utility in Indonesia, for a period of 25 years.
Partner Bill McCormack said: “We feel quite privileged to have been involved in such a ground-breaking and innovative project. There has been a lot of talk about LNG-to-power so it is great to close a high-profile deal in Asia. Thanks to a very strong group of sponsors and lenders and also our team who worked extremely hard to get this across the line.”
The financiers included Japan Bank for International Cooperation (JBIC) and Asian Development Bank (ADB), as well as a group of commercial mandated lead arrangers, including Credit Agricole, Mizuho Bank, MUFG Bank, OCBC Bank and Société Générale, benefitting from insurance provided by Nippon Export & Investment Insurance (NEXI). The sponsors are advised by ING.
The Shearman & Sterling team was led by partners Bill McCormack and Ben Shorten (both Singapore-Project Development & Finance) and Anna Chung (Seoul-Project Development & Finance) and included associates Jean-Louis Neves Mandelli, Lachlan Clancy and Bilyana Belcheva (all Singapore-Project Development & Finance) as well as trainee Chris Collins (Singapore-Project Development & Finance). Specialist advice was provided by partners Patrick Clancy (London-Finance), Daryl Chew (Singapore-International Arbitration) and Simon Letherman (London-Tax), counsel Leona McManus (London-Finance) and associate Brandon Bang (Singapore-International Arbitration).
