Firm Advises Sonangol in $7 Billion Natural Gas Transaction

Firm Advises Sonangol in $7 Billion Natural Gas Transaction

The global law firm of Thompson & Knight has assisted Sonangol, the state-owned oil company of Angola, in a transaction for one of the world’s largest integrated natural gas projects. Under terms of the deal, Sonangol’s Sonagas unit and Chevron Corp., together with their European partners Total SA, BP PLC, and Eni SpA, have agreed to invest more than $7 billion in a new liquefied natural gas export facility located near the city of Soyo on Angola’s northwest coast.

The project was led and coordinated by the in-house general counsel of Sonangol, Fernando Gomes dos Santos. Much of the strategic planning and virtually all of the documentation was handled by attorneys with Thompson & Knight LLP, including lawyers from the Firm’s Rio de Janeiro, Dallas, Houston, and New York offices who served as international legal counsel to Sonangol for the transaction, along with the Angolan Law Firm of Carlos Feijó and Raul Araújo. “This was a complex exercise in corporate and project development negotiations and diplomacy for all parties involved,” says Alexandre Chequer, a partner with Thompson & Knight. “This deal is a milestone in the development of the Angolan economy and great promise for nations around the world seeking alternatives to traditional suppliers of petroleum-based fuels.”

The agreement marks what is estimated to be Angola’s largest foreign investment project and is scheduled for completion in 2012. Nearly all of the gas from the project is expected to be shipped to the United States.

According to Chequer, the construction and operational phases of the project will create new jobs and business opportunities for sustainable development in Angola, particularly in Soyo and the Zaire provinces. “This is a comprehensive project that involves the expanded exploration of gas fields, pipeline infrastructure, facility construction, and product marketing,” says Chequer. “In terms of the amount of investment and the scope and integration of these components, this is rivaled perhaps only by similar developments in Qatar.”

The processing facility is expected to receive approximately 1 billion cubic feet of associated gas per day from offshore producing blocks, resulting in an annual production of 5.2 million tons of liquefied natural gas and related products. It is also expected to process and treat up to 125 million cubic feet per day of gas for use in industrial projects.

The Angola LNG Project will utilize associated natural gas initially from the Cabinda Association and from Blocks 14, 15, 17, and 18, as well as from dedicated non-associated gas fields.

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