Financing Energy Projects: Oil, Gas and Power
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A practical guide shows you how to structure upstream and downstream oil and gas projects including field development, rigs, platforms, pipelines, and other transportation infrastructure
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Course Instructor
The Course Director provides executive level training and advisory services to a wide variety of organizations worldwide. Specializing in international project finance, capital markets and risk management, she works with project developers, investors, equipment suppliers, private and development bank clients, law firms and others to structure viable financing for green-field projects and facility upgrades in the oil and gas, power, transport sectors.
Course dates
Course overview
Even the most carefully structured energy project finance deals can face difficulties in attracting sufficient funding from international and local investors. Project developers, equipment suppliers, bankers, other creditors and investors must be properly equipped to analyse and explain the risks and prospects for a project’s future performance.
This course will teach you how to structure upstream and downstream oil and gas projects including field development, rigs, platforms, pipelines, and other transportation infrastructure. The course will also examine LNG, fertilizer transactions, and power deals. By the conclusion of the course you will have developed a framework for recognising and analysing qualitative and quantitative project risks when financing green field projects as well as facility upgrades in the energy sector. You will also understand how excel models are used to assess project debt capacity, return on investment (ROI), and other metrics common to attractive deals.
Numerous examples of projects from the region and around the world are employed throughout the course to ensure understanding and application of concepts. The course includes recent examples of structured financing attractive to banks, bond investors, lessors and Islamic investors as well as applications of energy related derivative instruments to enhance financing. Finally, we also pay careful attention to fund providers and credit enhancers such as Export Credit Agencies and International Financial Institutions (IFIs) like IFC, Islamic Development Bank, European Investment Bank, and other Bi-laterals.
The fifth day is a stand-alone cash flow modelling workshop. Using excel software, you will create a model for an LNG Plant to test for project debt capacity as well as return on investment.
Summary of course content
- Project finance in today’s challenging markets
- Structuring large oil and gas field development projects
- Financing pipelines, oil rigs, platforms, and other infrastructure
- LNG and fertilizer plants
- Power project finance
- ‘Green’ energy deals and carbon credits
- Developing pro-forma estimates and cash flow models
- Working with banks and other debt providers
- Understanding key legal risks in projects
- Official providers of funds and credit support (export credit agencies, development banks and others)
- Managing price volatility in energy deals
Methodology
Lecture sessions, innovative deals and numerous examples of projects in the oil and gas, power and water desalination sectors are drawn from around the world and discussed throughout the course. You will develop a framework for recognising, and analysing qualitative and quantitative project risks.
Who should attend this training course?
- Financiers involved in project finance, investment analysis and syndicated lending
- Government and parastatal executives involved in sponsoring/assessing project finance deals
- Institutional bankers
- Corporate bankers
- Commercial and investment bankers
- Project sponsors
- Development banks
- Contractors
- Accountants and lawyers
- Project consultancies
- Export credit agencies
Supporting publications
DAY ONE
Themes: Energy markets; varying approaches to financing different types of energy projects; qualitative and quantitative analysis; cash flow modelling.
Oil, gas and power project finance today
- The changing market for financing energy transactions:
- Special features of limited recourse projects
- Corporate balance sheet usage
- Electricity and BOO, BOT, BOOT, BLT, etc.
- Private sector providing public services
- Players and their roles
- Steps in a project financing
- Types of projects and their comparative complexity
Identifying and allocating risks Risk identification and allocation in oil gas and power project financing: different approaches/differing risks
- Financing structures: limited recourse vs. balance sheet deals
- Pipelines
- Field development and platforms
- Production facilities
- Refineries and petrochemical plants
- Power plant
Sources of finance: a financing checklist
- Domestic borrowing
- Loans from international banks
- International capital markets: eurobonds, private placements
- Export credit support for loans and bonds
- Specialised agencies: IFC and others
- Leasing
- Equity from project sponsors and others
- Derivatives usage
Building a risk matrix
- Risk allocation between sponsors, creditors and others
- Technology and construction/ completion
- Reservoir/reserves risks
- Feedstock risk
- Sales and off-take, operation and maintenance
- Abandonment/decommissioning
- Environmental/regulatory issues
- Country/political risk
Quantitative analysis: designing pro-forma energy project models
- Approaches to modelling for oil and gas transactions
- Debt providers: DSCR, loan life, and other key ratios
- Balancing equity and debt suitably in different types of projects
- Developing an appropriate base case/running sensitivities
- Perspective of the sponsor and measures of investor return
Case study: financing an ammonia plant
Participants break into small groups to evaluate this security package this gas processing plant.
A computer simulation quantifies risk assessments.
DAY TWO
Themes: Legal issues to consider in accessing finance; bank markets; credit enhancement with ECAs;
upstream oil and gas field development
Case discussion: Fertilizer
Legal issues in energy finance
- Legal environment for energy deals
- Commercial points and legal points in various project structures
- Incorporated and unincorporated joint ventures
- Partnerships and Limited Partnerships
- Separate and common financing in natural resources projects
- Key contractual agreements and structuring considerations
Domestic and international bank finance
- Club loans and bank syndicates: primary and secondary distribution
- Pricing, flexibility, timing in the sector and today
- What security do banks want?
- Offshore accounts and trustees
- Mortgages on fixed assets / contract assignments
- Swap requirements and other derivatives usage: interest rate and currency
- Recent structures; case examples from Africa and the Middle East
Sources of risk support: Export Credit Agencies (ECAs)
- Official guarantees, insurance and funding programmes for energy transactions
- Incentives in ECA programmes
- Which are most popular today?
- Costs and availability
Upstream oil and gas: oil and gas exploration, development and production
- Structure of the oil and gas industry: upstream, midstream and downstream
- Hydrocarbon basics: geology, reserves
- Supply and consumption, OPEC, etc.
- Oil production: process depletion and enhanced recovery
- Major systems and types of drilling equipment
- Offshore oil platforms in shallow and deep water
- Reserve-based Finance
Case study: financing a condensate field development
Participants break into small groups to evaluate the security package and forecasted cash flows for an upstream condensate field development project.
DAY THREE
Themes: Alternative sources of finance and capital markets; energy price volatility management techniques; leasing and equipment finance
Case discussion: oil field development
Sources of risk support: development banks (IFIs)
- Key IFIs and programmes
- World Bank Group: World Bank, IFC, MIGA, ICSID
- Other multilaterals: Africa development bank, Islamic development, Inter-American development bank etc.
- Bilaterals: U.S. OPIC, FMO, Proparco and others
Accessing capital markets for projects pre- and postcompletion
- Capital markets and examples of projects
- Rule 144A and Eurobond financing
- Mezzanine Finance
- Infrastructure investment funds
- Rating agency criteria
- Construction finance vs. operating projects
- Greenfield vs. Brown field projects
- Crude oil export receivables securitisation
- Examples: Ras Laffan Qatar, Nigerian LNG, Trinidad
Oil and gas transportation/ shipping
- Logistics: pipelines, shipping, storage
- Types of tankers
- Average Freight Weight
Assessment classes (AFRA)
- ULCC to tanker lightering
- Understanding charters; time and voyage
Refineries: simple and complex
- Refined production
- Simple or topping refineries; vacuum distillation
- Complex refineries
- World profile and current transactions in Asia
Leasing equipment
- Objectives and structures
- Costs and calculations
- Applications in energy project finance
Case study: rig finance
In small groups participants will assess a proposed bond issuance to refinance a semi-submersible rig conversion. Evaluating operating cash flows.
DAY FOUR
Themes: Islamic finance; derivatives usage for energy price management; power markets power project financing
Case discussion: rig finance
Islamic financing alternatives for energy projects
- Structures: Istisna, Ijara, Sukuk
- Examples: Petro-Rabigh Saudi Arabia, others
Managing oil price volatility with derivatives
- Oil and gas price markets and players
- Oil and natural gas swaps and options
- Costs, structures, indices, applications
- Recent examples of usage
Introduction to power project financing
- Constructing a power risk matrix
- Understanding different types of thermal plants
- Peakers vs. base-load facilities and power dispatch curves
- Combining water desalination and electricity production
- Rating agencies’ analytical model
Case study: financing a thermal power plant
Participants will break into small groups to evaluate the security package for this cogeneration plant. A computer simulation is used.
Market forces and effect on electrical supply
- Fragmentation of electricity generation
- Merchant power plants with uncontracted sales
- Tolling arrangements
- Renewable energy: financing wind, solar and bio-fuel plants
- Comparative costs and “grid parity”
- Government support schemes for renewable projects
- Understanding carbon markets
Conclusion and self-test
DAY FIVE
Themes: LNG project modelling workshop
Participants build a pro-forma cash flow model for a Liquified Natural Gas (LNG) facility. They assess a wide range of scenarios in order to test a limited recourse financing package, the project’s debt capacity, and its suitability for investment. Discussion of common approaches to modelling was well as Excel, ‘dos’ and ‘dont’s’. Further practical uses for models in negotiations are described.
Modelling workshop overview: objectives and approaches
- Constructing a model/common myths
- Variations by project type
Structuring the model and organising the data to create a cash flow statement
- Developing the assumptions page
- Construction costs and timing
- Operating cost, plant capacity usage, fixed and variable costs reinvestment, plant expansion,
productivity shifts Financing section
- Equity first or pro rata manually designed equity subscription
- Draw-down of debt linked to specific contracts or expenditures or in a hierarchy
- Funding the debt service reserve account
Developing profit and loss and balance sheet statements
- Factoring in reserves
- Considering currencies
- Tax calculations
Ratios and sensitivity analysis: objectives and limitations
- Measuring debt capacity and investor return
- Using modelling output for initial project vetting
- Supporting on-going negotiations
Summary and conclusion of modelling workshop
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The Course Director provides executive level training and advisory services to a wide variety of organizations worldwide. Specializing in international project finance, capital markets and risk management, she works with project developers, investors, equipment suppliers, private and development bank clients, law firms and others to structure viable financing for green-field projects and facility upgrades in the oil and gas, power, transport sectors.
Prior to establishing her own firm she was at JP Morgan Chase Manhattan Bank where she structured export and international project transactions and advised clients on foreign exchange and other risk management issues. Earlier in her career, she was responsible for a team of credit analysts evaluating the quality of the bank’s distressed loan portfolio as well as that of its newly acquired affiliates. In that role she had extensive experience with workout.
The Course Director has published articles in the business press and co-authored several selfstudy guides covering international project finance, trade and export finance, foreign exchange, and financial futures. The World Bank has published her views on approaches to financial analysis in emerging markets. She is a primary speaker in a series of video presentations created to cover the topic of Sound Banking Principles and Project Finance during executive sessions throughout the world.
Until 2007 she was Chair of the Technical Advisory Panel of the Public Private Infrastructure Advancement Fund (PPIAF). The Fund provides technical assistance to encourage private involvement in infrastructure development. She received an M.B.A. from INSEAD, the European Institute of Business Administration, in France. Her B.A. degree is from Princeton University.
4-5 Star Hotel in Hong Kong, Hong Kong,
All of our courses are held in 4 – 5 star hotels, chosen for their location, facilities and level of service. You can be assured of a comfortable, convenient learning environment throughout the duration of the course.
Due to the variation in delegate numbers, we will send confirmation of the venue to you approximately 2 weeks before the start of the course. Course fees include training facilities, documentation, lunches and refreshments for the duration of the programme. Delegates are responsible for arranging their own accommodation, however, a list of convenient hotels (many at specially negotiated rates) is available upon registration.
4-5 Star Hotel in Singapore, Singapore,
All of our courses are held in 4 – 5 star hotels, chosen for their location, facilities and level of service. You can be assured of a comfortable, convenient learning environment throughout the duration of the course.
Due to the variation in delegate numbers, we will send confirmation of the venue to you approximately 2 weeks before the start of the course. Course fees include training facilities, documentation, lunches and refreshments for the duration of the programme. Delegates are responsible for arranging their own accommodation, however, a list of convenient hotels (many at specially negotiated rates) is available upon registration.
Interested in holding this course in-house? Please fill out your details and a member of our team will be in touch with more information.
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Book all modules of APAC Project Finance Academy, 21 October – 1 November 2013, at USD$9,950 only (save USD$3,850)!
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Book all modules of APAC Project Finance Academy, 21 October – 1 November 2013, at USD$9,950 only (save USD$3,850)!
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Book all modules of APAC Project Finance Academy, 21 October – 1 November 2013, at USD$9,950 only (save USD$3,850)!
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Book all modules of APAC Project Finance Academy, 21 October – 1 November 2013, at USD$9,950 only (save USD$3,850)!
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Book all modules of APAC Project Finance Academy, 21 October – 1 November 2013, at USD$9,950 only (save USD$3,850)!
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