Investingin the fuel of the future

Financing LNG in Australia 
Being part of the APLNG project from its initial phase, SFS acted as a long-term strategic partner throughout the project’s lifecycle – from construction to operation, and now beyond supporting the company’s long-term financing plan.
Anton Conradie, head of debt, SFS Energy Finance team in AA

Did you know that Australia is expected to become the world’s largest exporter of LNG, surpassing Qatar in 2019*? Often called the “fuel of the future”, global  trade in liquefied natural gas (LNG) reached 38.2 billion cubic feet per day (Bcf/d) in 2017, a 10% (3.5 Bcf/d) increase from 2016 and the largest annual volume increase since 2010 [Source]. This trend is expected to continue as countries, such as Australia, seek to unlock cleaner burning and abundant natural gas supplies.

 

On the heels of this rapid growth, Siemens Financial Services (SFS) recently completed a further investment in Australia Pacific LNG (APLNG), a liquefaction project in the Asia-Australia (AA) region. APLNG is an LNG export business on the east coast of Australia that supplies fuel to China and Japan. This latest investment involves SFS’s participation in a bond offering to re-finance the downstream component of APLNG. 

 

Previously APLNG and its upstream gas facilities have been significant Siemens’ customers in the region since 2011 and this large project–comprised the largest scale end-to-end power distribution solutions Siemens Australia has ever sold.

“Being part of the APLNG project from its initial phase, SFS acted as a long-term strategic partner throughout the project’s lifecycle – from construction to operation, and now beyond supporting the company’s long-term financing plan,” Anton Conradie, head of debt for SFS’s Energy Finance team in AA, commented. “SFS became a lender to this large-scale project during construction in 2013. Subsequent to its final completion last year, we made a further commitment to support the downstream component of this successful operation, participating in a bond offering in 2018.”

 

Having confidence in APLNG’s vision and operating team for this project enabled SFS to provide long-term financing despite challenging market conditions. 

 

In addition, the location of the SFS team in nearby Singapore, an Asian hub for banking and investment, helped solidify the appropriate capital support structure for the Australian project. Since the LNG volumes are contracted for delivery within Asia, SFS’s experts were well-positioned to accurately assess the LNG market dynamics in the region.    

 

“This is a great example of how our global team of experts can support Siemens’ projects all over the world,” Conradie commented. “The fact that we can support customers with different financing instruments is a win-win for our company and our customers.”