Primeline Energy Holdings Inc. (“Primeline” or the “Company”) announces that it has received confirmation that the credit committee of China Development Bank (“CDB”) has approved in principle the project finance facility to be made available by CDB to the Company for the development of the LS36-1 gas field (“Development”).
As announced by Primeline on November 8, 2012, Primeline Energy China Limited (“PECL”), a 100% subsidiary of the Company, Primeline Petroleum Corporation (“PPC”), a company wholly owned by the Company’s chairman and controlling shareholder Mr. Victor Hwang, and CDB previously entered into a loan memorandum (“Loan Memorandum”) setting out the terms of a loan facility for PECL and PPC’s share of the costs of the Development.
The Loan Memorandum was subject to the approval of CDB’s credit committee and Primeline has now been informed that the CDB credit committee has approved in principle the granting of the loan of US$300 million substantially on the terms of the Loan Memorandum, subject to concluding arrangements with Primeline for security before the Development reaches the design production level specified in the Overall Development Program (“ODP”) in addition to that provided for in the Loan Memorandum.
Primeline and CDB are now in the process of negotiating and finalising the formal loan agreement and the security arrangements and documentation. A further announcement will be made when the loan agreement is signed.
The formal loan agreement will be signed after the approval of the ODP by the National Development and Reform Commission. However, under the terms of the agreements relating to the Development entered into by Primeline, PPC and CNOOC in March 2010, Primeline has no obligation to provide funding for the Development until after such approval has been obtained. In the meantime, CNOOC continues to be responsible for all work in order to ensure that the Development remains on schedule. CNOOC has made significant progress on the Development which is currently expected to be completed in the third quarter of 2013.
[mappress] Press Release, February 12, 2013