Financing documentation for an $8.5 billion financing for Australia Pacific LNG was signed. I started working on this transaction just after I got back from maternity leave in January 2010, so I joke that it’s like my child because it’s grown with him! Because of its size, the financing came from multiple sources: the Export-Import Bank of the United States, the Export-Import Bank of China and commercial banks. We represented the borrower, a joint venture by Origin, an Australian oil and gas company, ConocoPhillips and SINOPEC, a Chinese state-owned oil and gas company. Each side had different objectives that needed to be reconciled—it was challenging, but ultimately that challenge is part of why it was so satisfying to finally get it signed.
The Australia Pacific LNG (liquefied natural gas) project is the first financed unconventional natural gas project in the world, and is one of the many transactions involving the flow of natural resources to support growth in Asia. This transaction was particularly novel because the natural gas involved is “unconventional,” which means, in our case, that the gas is embedded in coal seams and released through drilling up to 10,000 wells over vast areas of inland gas fields over the course of the project. The gas from the inland gas fields was then transported to a plant on the coast of Queensland, Australia, turned into LNG, and shipped to China and Japan. This APLNG transaction was categorized as a “standout” in the FT U.S. Innovative Lawyers 2012 Survey.
We went to Australia and flew over the natural gas field in Queensland. Of course, the plane ran out of gas right over the gas field. We had to land in Roma, a remote town in the outback, to fill up the tank. It was a very interesting sight—a group of lawyers, financial advisers, lenders’ representatives and consultants waiting around a really small air strip in the outback.
We also visited the site for the LNG plant—and there was absolutely nothing there. Our client subsequently sent us pictures as development progressed and it was a great feeling to have contributed to the tangible development that was going up.