French banks look at pipeline finance
March 3, MEED -- The Geneva-based trading company Vitol and Hong Kong-based
Federal Asia are negotiating with several French banks for a possible finance
package for the proposed $360 million Neka-Tehran oil pipeline.
The amount sought is believed to be $200 million-250 million. An agreement
is expected by May, according to Vitol. French bankers say preliminary
talks started in January.
Credit Agricole Indosuez and Credit Lyonnais are said to be among interested
banks; Credit Agricole has been arranging large project finance lines recently
(MEED 19:11:99), and Credit Lyonnais was in mid-1999 involved in an earlier
abortive effort to arrange finance for the pipeline (MEED 20:8:99).
Half a dozen French banks have been approached, a source says.
Vitol and Federal Asia are acting on behalf of a Chinese consortium,
led by China National Petroleum Company (CNPC) and Sinopec, which has a
$360 million contract to build the 324-kilometre line from the Caspian
Sea to the Tehran refinery (MEED 28:1:00; 1:10:99).
The consortium will provide $130 million of the necessary finance itself.
The Neka-Tehran line is due to start carrying an initial 170,000 barrels
a day of crude from Kazakhstan and Turkmenistan for use at the Tehran refinery
in late 2002. Equivalent amounts of Iranian crude will be made available
at Gulf terminals.