Vinson & Elkins LLP advised Uz-Kor Gas Chemical LLC on the development, financing, and construction of its USD 3.9 billion integrated upstream gas and petrochemical complex in the Ustyurt region of Uzbekistan, which is scheduled to come on stream in 2016. The project reached a critical milestone on May 19, 2012, when Uz-Kor and its lenders signed key finance documents for the USD 2.54 billion project debt financing of the project. The financing features limited recourse to the project sponsors and door-to-door tenors of up to 16 years.
The project — the largest project financing in Central Asia and the largest petrochemical project financing to date in the CIS region — will be supplied with gas and condensate as raw materials from the Surgil field, which will be licensed to and operated by Uz-Kor and other gas fields operated by Uzbekneftegaz (UNG). Uz-Kor will produce and sell gas for the Uzbek market as well as high-density polyethylene, polypropylene, and other petrochemical products for the local and export markets.
V&E partner Nabil Khodadad, the global co-head of Project Finance practice, led a team which included partner Andrew Nealon and associates Alistair Wishart and Lauren Davies. “We are delighted to be representing Uz-Kor Gas Chemical on this landmark project,” said Khodadad. “This project will set a favourable benchmark not only for other major projects in Uzbekistan, but also in the region.”
Uz-Kor is 50 percent owned by UNG, the national oil and gas company of Uzbekistan, and 50 percent owned by a South Korean consortium comprising Honam Petrochemical, Korea Gas Corporation, and STX Energy.
The debt financing includes direct loans from the Export-Import Bank of Korea (Kexim), China Development Bank, Asian Development Bank, and the National Bank for Foreign Economic Activity of the Republic of Uzbekistan for a total amount of USD 1.175 billion. Nine commercial banks are committed for funding of up to around USD 1.365 billion under covered facilities from Kexim, Korea Trade Insurance Corporation (Ksure), and several European export credit agencies.
Vinson & Elkins was assisted by Leges Advokat, who acted as Uz-Kor’s local legal counsel. Norton Rose was the lenders’ international legal counsel and Linklaters served as CDB’s counsel, with Colibri acting as lenders’ local counsel.
ING is acting as sole financial adviser.
