Laugfs Gas gets private sector financing from China’s Sinosure

Aug 21, 2017 (LBO) - Sri Lanka's LAUGFS Gas and Standard Chartered have announced the first private sector financing facility supported by China Export and Credit Insurance Corporation (SINOSURE) for the 30,000MT import and export terminal at Hambantota. The liquid petroleum gas (LPG) storage terminals by LAUGFS Terminals Ltd., a subsidiary of LAUGFS Gas PLC, is being built with an investment of US 80 million dollars and will be one of the largest LPG import and export terminals in South Asia. As a principal party to this transaction, Standard Chartered acted as the coordinating bank, sole facility arranger and lender for the financing facility. “This marks a significant milestone for our LPG Terminal project, which is well on track to be commissioned in the 2nd half of 2018,” W K H Wegapitiya, chairman of LAUGFS Holdings said. “Once completed, the LAUGFS terminals in Hambantota will garner tremendous economic benefits to our country by helping to position Sri Lanka as a central energy hub in the region." The Hambantota Port is located on a strategic sea route in close proximity to some of the largest emerging LPG markets in the region, such as Bangladesh and Myanmar and the new terminal will operate as a central hub for LPG importing, re-exporting as well as the provisioning to retailers. SINOSURE is a state-funded policy-oriented insurance company, which provides medium and long term export credit insurance, overseas investment (leasing) insurance, bonds and guarantees concerning foreign trade and a range of other related products. “The strategic location of the terminal in the midst of the world’s largest shipping routes will undoubtedly be an enormous advantage that the company can leverage on," Guo Yilin, deputy general manager of SINOSURE said. "We are pleased to be part of this visionary endeavour with the first ever such private sector finance facility in Sri Lanka.” Constructed by China Huanqiu Contracting and & Engineering Corporation (HQC), the first phase of the LAUGFS LPG Terminal will be of 30,000MT storage capacity, with plans to extend to 45,000MT in phase two. Once completed, the facility will consist of above-ground spherical LPG storage tanks, each with a 6,000m3 volume. With the proposed cargo heating system at the existing jetty, the Terminal will be well-equipped to accept VLGCs with refrigerated or pressurized cargo. LAUGFS has been strengthening its energy presence within the region over the recent few years with the expansion of its LPG downstream businesses to Bangladesh, rapid expansion of its LPG vessel fleet under LAUGFS Maritime, and the setting up of its energy trading arm in Dubai. Jim McCabe, chief executive officer of Standard Chartered Sri Lanka says that they were pleased to arrange and structure a financing facility supported by SINOSURE for the LAUGFS Terminal project.