Project Finance 2019

I. LNG Project Development: A Brief History

For multiple decades now, LNG export projects developed and constructed around the world have consistently appealed to lenders involved in project financings. In many respects, LNG export projects are perfectly suited to what we think of as a “classic” project financing: their development and construction phases are capital-intensive; and they recoup their high development and construction costs by attracting creditworthy offtakers, including large oil and gas conglomerates, to purchase LNG pursuant to long­term sale and purchase agreements. Though LNG projects and related project financings follow different structures – from fully integrated to tolling and trustee borrowing structures, some of which will be discussed in more detail below – these features of LNG development and construction are present in virtually every major LNG export project.¹