Basrah Gas Company

Basrah Gas Company - Project Finance Loan

Borrower (s)
Basrah Gas Company
Industry
Oil & gas/LNG
Area of finance
Project & Infrastructure Finance
Region
Middle East
Countries
Iraq

Deal Overview

Facility proceeds will be used to partially finance the design and installation of a new gas processing plant, the Basrah Natural Gas Liquids (“BNGL”) facility, part of a broader expansion plan to increase BGC’s raw gas processing capacity from 1 billion standard cubic feet per day...

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Facility proceeds will be used to partially finance the design and installation of a new gas processing plant, the Basrah Natural Gas Liquids (“BNGL”) facility, part of a broader expansion plan to increase BGC’s raw gas processing capacity from 1 billion standard cubic feet per day (“bscfd”) currently to 1.4 bscfd by 2024.

As part of a broader expansion plan to increase BGC’s raw gas processing capacity, Deutsche Bank was a participant in a landmark transaction to support one of the largest gas flaring reduction projects in the world. This facility – the first ever pre-export finance transaction in Iraq – will help improve energy access, prevent associated greenhouse gas (GHG) emissions and support a more resilient, sustainable energy sector in Iraq.

The loan is structured as a robust pre-export finance transaction whereby export proceeds (condensate sales) paid on an offshore collection account will be used to repay the facility. 

Lenders will also have recourse to BGC’s LPG exports stream as well as to its balance sheet. The loan is without recourse to or guarantees from any of the shareholders. 

Since its commencement of operations in 2013 to end of 2020, BGC has prevented more than 107 million tons of CO2 emissions from entering the atmosphere. BGC has used the previously flared gas to replace existing energy sources, greatly reducing Iraq's overall greenhouse gas emissions. This is equivalent to reducing CO2 emitted from 3.5 average coal-fired power stations operating continuously through the same period or by removing 2.9 million cars from the road. 

The facility will be used to finance the capex needed to increase BGC's processing capacity. This will help avoid additional unnecessary flaring and reduce the associated greenhouse gas emissions by around 10 million tons per annum. It will also support Iraq's transition to a lower carbon path and improve access to a domestic energy source, helping the country meet its growing power needs.

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Deal Volume
$ 360m
Financial Close
24 June 2021
Sources
Submitted by participant(s), Press release

All Dealmakers

Mike Marnell

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Haiwen Tan

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Tranches


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Projects

Basrah Natural Gas Liquids (“BNGL”) Facility Project

Brownfield
LNG
Middle East
Iraq
$ 360m