IMPLEMENTATION LEVEL

NFI

AFFECTED FLOW

Outflow (subsidised)

ANNOUNCED AS TEMPORARY

No

NON-TRADE-RELATED RATIONALE

No

ELIGIBLE FIRMS

firm-specific

JUMBO

No

TARIFF PEAK

No
← back to the state act
Inception date: 29 Oct 2014 | Removal date: open ended
Still in force

Financial assistance in foreign market

On 29 October 2014 the Japan Bank for International Cooperation (JBIC) signed an overseas investment loan agreement with American FLNG Liquefaction, LLC in project financing amounting to approximately USD 2.6 billion. The loan finances the construction and production of LNG amounting to an estimated 4.4 million tons per annum, per train.
 
The company is owned by Freeport LNG Development L.P., of which Japanese Osaka Gas is a limited partner. Japanese Osaka Gas and Chubu Electric have pursuant to the project obtained usage rights of the plant's production capacity over an initial 20-year term.
 
Freeport LNG's Chief Executive Officer, Michael S. Smith, in this context stated 'As two of the largest natural gas and electric utility service providers in Japan, having liquefaction tolling agreements with Osaka Gas and Chubu Electric provides the strong end-user credit support necessary to fully finance the initial train of the liquefaction project.'
 
Project finance
Project financing loans include preferential terms such as repayments being solely made from the project's cash flow generation and secured on the basis of the project's assets alone. As such the loan agreement is tied to the project's finances and not the company in question.
 
Overseas investment loans
JBIC provides direct loans named overseas investment loans to Japanese companies, overseas affiliates or joint ventures where Japanese companies hold equity interests and governments or financial institutions partying with such overseas affiliates. Loans support projects in specific sectors or with a specific purpose of interest to Japan. Further information can be found on the Bank's website under overseas investment loans.
 
The GTA includes state guarantees and other financial incentives that are likely to affect the restructuring and performance of firms facing international competition, whether from imports, in export markets, and from foreign subsidiaries.

AFFECTED COUNTRIES

MAP
TABLE
EXPORT

AFFECTED SECTORS AND PRODUCTS

120 Crude petroleum & natural gas
2711 Petroleum gases and other gaseous hydrocarbons.
271111 Natural gas
334 Petroleum gases & other gaseous hydrocarbons, except natural gas
2711 Petroleum gases and other gaseous hydrocarbons.
271112 Propane
271113 Butanes
271114 Ethylene, propylene, butylene and butadiene
271119 Other

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