Yinson Production puts $1.3 billion financing in place for Angola-bound FPSO

A consortium of 13 lenders, including international banks and institutional investors, has enabled Yinson Production, a subsidiary of Kuala Lumpur-based energy infrastructure and technology company Yinson Holdings, to secure a limited recourse term loan facility of up to $1.3 billion for the pre-and post-delivery financing of a floating, production, storage, and offloading (FPSO) vessel, which is destined to operate off the coast of Angola.

The financing, which will be utilized for the construction of the FPSO Agogo, comprises three pari-passu secured tranches with staggered maturities of up to ten years post-delivery of the FPSO and will become non-recourse at this point, subject to certain conditions. The Standard Chartered Bank (Singapore) Ltd. acted as Global Coordinating Bank for the financing.

Markus Wenker, Yinson Production’s Chief Financial Officer, commented: “This transaction is a significant milestone for Yinson Production. It not only is our single largest financing to date, but the commercial multi-tranche structure – the first of its kind in the industry – significantly increases the efficiency of the financing compared to traditional structures, whilst diversifying the funding base by combining different lender groups in a single transaction. We thank all our lenders for their trust in us and support in passionately delivering this powerful financing solution for the Agogo FPSO.”

Yinson Production got a contract for the FPSO Agogo with a total contract value of around $5.7 billion in February 2023 from Azule Energy, a 50/50 joint venture between BP and Eni. With a firm operation period of 15 years, the contract contains additional optional periods of up to five years. Designed with a full suite of carbon emission reduction technologies, this is said to be the first-ever FPSO featuring carbon capture technology.

The FPSO Agogo, which will have a production capacity of 120,000 barrels of oil per day, will be deployed to the Agogo Integrated West Hub development project located in the West Hub of Block 15/06 offshore Angola, once construction is completed.

With an estimated reduction of carbon emissions of 27% compared to a conventional design, Yinson Production underlines that this FPSO incorporates other technologies to reduce emissions including a closed flare system, hydrocarbon blanketing, combined cycle technology, automated process controls, and all-electric drives systems. The company deems these features as integral to its transition towards achieving carbon neutrality by 2030 and net zero by 2050.

Strides have been made in the construction of this FPSO with the lifting and installation operation of the first modules and the connection of the electrical system of the residential area for the FPSO at the shipyard where Yinson is carrying out these construction activities.

Multiple players have been hired for the work on this project offshore Angola. In line with this, Aker Solutions is in charge of providing the umbilical, Subsea 7 has been tapped for the transport and installation of flexible pipes, umbilicals, and associated subsea structures, Baker Hughes is tasked with delivering subsea equipment and services, and TechnipFMC will supply risers and flowlines.

While MAN Energy Solutions has been hired for the FPSO Agogo‘s gas lift, injection, and export application, TMC Compressors will deliver a large-capacity marine compressed air system on board the FPSO.

Recently, Yinson Production held a naming ceremony for an FPSO, which will be deployed off the coast of Brazil, at Cosco Shipping Heavy Industry (Shanghai) shipyard in China.