Cameron Highway Oil Pipeline Named Oil & Gas Deal of the Year
(Houston, Texas) – Project Finance International magazine, the industry leader in project finance intelligence for more than a decade, has selected the Cameron Highway Oil Pipeline project as its Oil and Gas Deal of the Year for 2003. The London-based magazine selects winners annually after an extensive review of deals financed across the power, oil/gas, telecommunications and infrastructure sectors worldwide.
Formed in July 2003 by a joint venture of GulfTerra Energy Partners, L.P. (NYSE: GTM) (formerly El Paso Energy Partners) and Valero Energy Corporation (NYSE: VLO), the Cameron Highway Oil Pipeline project will construct a $458 million, 390-mile oil pipeline in the Gulf of Mexico - the largest oil pipeline in U.S. waters. When completed, the pipeline will have the capacity to deliver up to 500,000 barrels of oil per day from the southern Green Canyon and western Gulf of Mexico areas to the major refining areas of Port Arthur and Texas City, Texas, making it one of the largest crude oil delivery systems in the Gulf of Mexico. GulfTerra will build and operate the pipeline, which is scheduled for completion during the third quarter of 2004.
In choosing the project as its Oil & Gas Deal of the Year, Project Finance International cited the uniqueness of the deal, noting that “it combined the structure of a non-recourse construction financing with aspects of reserve-based lending, with project economics dependent upon the level of throughput from dedicated deepwater reserves under development.” The loan arrangements consisted of a syndicated bank loan and a private issuance of notes to institutional investors; the use of a dual-tranche structure, utilizing both a shorter-term bank tranche and long-term institutional funding, enabled the project to attract sufficient financing in a difficult market.
The deal marks the first true project financing of infrastructure for the deepwater Gulf of Mexico. The pipeline will be the primary outlet to market for over $5 billion in upstream investment by major producers.
Akin Gump represented GulfTerra on the project.
About Akin Gump
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About Project Finance International
Published by Thomson Financial (NYSE: TOC), PFI is a bi-monthly publication providing timely, independent and authoritative intelligence on global project finance deals from inception to completion. Each issue of the magazine contains news, feature articles and deal data (including league tables).
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