LNG to Power

LNG to Power projects as a way to increase electricity generation are growing in consideration.

LNG is seen by many as an ideal way to meet the ever-increasing demands for greater energy supply and reducing energy poverty, particularly in parts of the developing world, while still addressing the concerns of climate change.

WFW combines significant experience in natural resources, maritime/asset finance infrastructure, power, construction and project finance to deliver a thorough and comprehensive service.

LNG to Power Webinar Series

In our series of webinars and articles, we look at all aspects of LNG to Power projects.

The Risk Matrix Mitigated

Whilst LNG-to-Power projects focus on the last third of the LNG value chain, i.e. the supply of LNG to market, the overall LNG value chain comprises an ever-growing number of multiple projects with a variety of sponsors, lenders, governments, contractors and other participants.

With growing numbers of participants, complexity is likely to increase further and a good understanding of the ‘full picture’ of project-on-project risks that are created along the LNG value chain and that will affect LNG-to-Power projects at the end of that chain is paramount.

The Vietnamese Market

Vietnam remains one of the world’s most attractive emerging markets in the near term as rapid growth in manufacturing exports and domestic consumer expenditure continue to drive the economy.

Vietnam’s economic growth potential implies significant investments in the power and fuel sectors, and it is anticipated that LNG will form a significant component of this.

Vietnam has established a legislative and contractual framework pursuant to which it has successfully procured fuel and power generation, evolving from state owned entities to Independent Power Projects, and there is currently a mix of publicly and privately operated generation. The existing structures can form the basis for the development of successful LNG projects in Vietnam.

Power Plant – Construction and Finance

As our previous webinars on LNG to power have shown, the LNG sector has evolved from the traditional point-to-point LNG delivery system to a dynamic market with integrated components, new participants and a deeper market, evolving into the “LNG to power project”.

Well-structured LNG to Power projects are attractive to a wide range of credit providers, including commercial banks, institutional debt providers, development finance banks and export credit agencies. The risks on which credit providers focus will be similar to those on which sponsors focus but the required mitigation is not necessarily the same and all parties need to work together to achieve a bankable structure that is still attractive to sponsors.

FSRU – Finance and Bankability

In this episode of the series, we review the key aspects relating to the financing of the FSRU, both in relation to an integrated and non-integrated structure. We will also discuss how the FSRU sponsor, its financiers and the financiers of the power plant can manage their competing risks, whilst looking at certain bankability issues that are specific to an FSRU operating within an LNG to Power project.

Multi-User Facilities

In the fifth episode of our ‘The Anatomy of LNG to Power’ webinar series we reviewed the key aspects concerning third party access to gas infrastructure as may be laid out in national regulatory regimes. We also discussed the added complexities and risks of third party access to LNG, particularly floating, facilities creates for users, facility operators and financiers within an LNG to Power project.

Gas Market Deregulation – Thailand’s Silver Lining?

In the sixth episode of our webinar series, we were joined by gas market experts GaffneyCline, with whom we examined Thailand’s journey of deregulating its domestic gas market in the midst of global gas demand swings, supply pressures and uncertain price developments. We explored the recent developments in Europe and the US and set out some timely lessons in market design, consistent with the policies and regulations emerging in Thailand.