The European Investment Bank (EIB), the financing institution of the European Union, has signed a long-term loan of EUR 85 million with Fluxys LNG for funding current investment in the Zeebrugge reception terminal for liquefied natural gas (LNG).
The financing fits in with the EIB’s key objectives to support the development of large infrastructure projects labelled as Trans-European Network (TEN) projects by the European Council and to contribute to the EU Energy and Climate change Policy. The loan provided by the EIB enables Fluxys LNG’s parent company Fluxys to optimize its resources for other infrastructure projects in its gas transport and storage activities.
Fluxys LNG (Fluxys stake 93.20%) is owner and operator of the Zeebrugge LNG terminal. Following new capacity subscription agreements signed in 2004, the company decided to double the terminal’s capacity to 9 billion cubic meters per year. The capacity enhancement requires an overall investment of EUR 165 million and includes the construction of a fourth LNG storage tank as well as additional regasification facilities. Under the new agreements, the enhanced capacity of the terminal has been fully booked on a long-term basis, with LNG deliveries having started in April 2007. The construction works for the capacity increase are nearing completion.
The Zeebrugge LNG terminal capacity enhancement is a Priority Energy-TEN project which is fully in line with the EU objective of promoting sustainable, competitive and secure energy sources such as defined by the Brussels European Council of March 2007. The investment will contribute to increase, secure and diversify gas supplies to the EU as imported gas from Zeebrugge can easily be moved to the UK, the Netherlands, Germany, Luxemburg and France. Environmental benefits will be felt from the completion of this project as well, since it will allow the use of larger volumes of natural gas to replace less environmentally sound fuels.
The loan provided by the EIB does not change significantly Fluxys LNG’s debt position and the company’s balance sheet remains very solid in view of possible new loans to finance future investments. In addition, the funding made available to Fluxys LNG enables the Fluxys Group to optimize its resources for other infrastructure projects in its gas transport and storage activities.