Arrow shares dive
SHARES in Arrow Energy plunged more than 10% yesterday after managing director Nick Davies flagged a possible fund raising to meet the capital requirements for the restructuring of the Fisherman’s Landing project.
Davies had yesterday told Dow Jones newswires that with the restructuring of the Fisherman’s Landing liquefied natural gas project, under which Arrow would own and develop the first 1.5 million tonne per annum LNG train, the company had extra funding needs.
He added Arrow had not made a decision on how much money to raise, or when, as there were several issues to be decided, including finalising an agreement to sell LNG from the project to Toyota Tsusho Corporation.
Davies also said Arrow would receive a payment from Shell when a final investment decision is made on the LNG project at Gladstone.
Meanwhile, the company said today its financing plans for the project had progressed well, with funding options identified and advanced with its advisors UBS.
These include a combination of corporate and project debt finance; export credit agency- supported debt finance; partnering with infrastructure developers to develop and fund key infrastructure assets; project joint venture interest sell downs; and equity and equity-lined issues.
Arrow added its funding requirements for the upstream field development and the Surat to Gladstone pipeline were estimated to be about $A1.32 billion, while full details for the capital costs of the LNG plant would be provided once the project restructure was complete and final engineering estimates and turnkey construction contract pricings were available.
Arrow and Liquefied Natural Gas Ltd had, in early January, revised their heads of agreement to achieve their targeted final investment decision for the two-train 3 million tonne per annum LNG project at Gladstone in the March quarter.
Under the revised heads of agreement, the project will be split into an optimised structure of InfraCo and TrainCo.
InfraCo will be established as an unincorporated joint venture between LNG Ltd’s subsidiary Gladstone LNG (51%) and Arrow (49%) to own, design and construct the project’s infrastructure, including the storage tank, jetty/ship loading and all related facilities and services.
TrainCo will be 100% owned by Arrow and will develop the first 1.5MMtpa LNG train on land under a sublease from InfraCo.
The LNG train will include gas pre-treatment and liquefaction facilities, and will use LNG Ltd’s OSMR liquefaction technology under a technology licence and fee agreement.
Shares in Arrow closed at $3.55 last night, down from $3.96 at the start of trading.
Tuesday, 2 February 2010
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