Bank of China (Mexico) contributes to $403.8 million syndicated loan for Cakua Offshore Gas Compression Station Project

Bank of China branch contributions to $403.8 million syndicated loan for Cakua Offshore Gas Compression Station Project On April 3, 2020, Servicios Compresión de Gas Ca-Ku-A1 S.A.P.I. de C.V. — a special purpose vehicle and joint venture of a subsidiary of ACS Group (Dragados Offshore de México, Dragados Offshore, Cobra Instalaciones y Servicios, Dragados Industrial and Avanzia Instalaciones) [95% equity stake] and CKA1 Holdings [5% equity stake] — signed a $403,855,944 10-year senior secured loan agreement with a syndicate of 11 banks for the Cakua Offshore Gas Compression Station Project.

The borrower was expected to use the loan proceeds to partially refund Cakua’s development costs, refinance existing bridge loans, and fund the remaining costs of the Cakua Offshore Gas Compression Station Project. Bank of China contributed $34.3 million to the syndicate.

Other participants in the syndicate include Spain's Instituto de Credito Oficial (ICO), Bancomext, Banobras, Intesa Sanpaolo, ING, Mizuho, MUFG Bank, Nacional Financiera, Norinchukin Bank, and Societe Generale. Mizuho served as the Coordinating Lead Arranger, Bookrunner, Administrative Agent, and Depositary and Collateral Agent.

The purpose of the project is to construct a greenfield 450 MMcf/d offshore natural gas compression station located on the Ku-Maloob-Zaap (“KMZ”) oilfield in the Bay of Campeche, Mexico.

The project involves the construction of 4 turbo compressor units and 3 turbo generators with a daily processing capacity of 450MMCF.

The mechanical and process design for the gas compression station was designed to compress sour gas to be reinjected to assist oil and gas extraction.

The Ku-Maloob-Zaap field currently produces around 750,000 barrels of oil per day and represents around 50% of the country’s crude oil production.

The Mexican government under President López Obrador has pledged to increase oil production by 1.0MMbpd by 2024, after Pemex’s production halved between 2004 and 2019.

The KMZ oilfield itself is owned by PEP, which fully contracted the project under an 11-year take-or-pay Compression Services Agreement.

Dragados Offshore México is responsible for engineering, procurement, construction, installation, operations, and maintenance. In May of the following year, Bank of China also contributed to a USD 500 million bridge loan for the project. This commitment is captured in Record ID #109602.