Haynes and Boone Represents Irradia in Complex Cross-Border Financing of Peruvian Natural Gas Facility

04/07/2008

DALLAS – Haynes and Boone, LLP announced today that its Projects and Latin America practice groups have successfully completed a complex cross-border financing for Irradia, S.R.L. to fund the development of a Peruvian natural gas liquefaction and distribution facility.

Haynes and Boone represented Irradia, a joint venture between two U.S. partners and one Peruvian partner, in the negotiation and financing of its proposed 300,000 gallon per day natural gas liquefaction and transportation facility located in Chilc, Peru, near Lima. Lead firm attorneys were Darrel Rice, a partner in the firm’s projects practice; Larry Pascal, head of the firm’s Latin America Practice Group; and Hunt Buckley, a partner in Haynes and Boone’s Mexico City International Group.

The project financing, valued at an estimated US$82.5 million, was provided by lead arranger WestLB.

“This transaction presented all the opportunities and challenges of a significant cross-border financing, with participants in many countries,” said Mr. Rice. “Internally, Haynes and Boone’s U.S. financing lawyers worked closely with our Latin America Practice Group. Additionally, the transaction could not have been completed without the cooperation and expertise of Peruvian counsel, whose participation was critical to the success of the transaction.”

Irradia, who spearheaded development of the liquefied natural gas (LNG) plant and its various components, teamed with a cross-border consortium of business and service providers. Equipment manufacturers were located in Spain and the U.S., including Texas-based Salof Refrigeration. The primary engineering, procurement and construction (EPC) contractor was Haug, a large construction company headquartered in Lima. Project financing was provided by WestLB, who was represented in the transaction by New York-based Milbank Tweed.

The natural gas feedstock for the project will be sourced from the Camisea field in eastern Peru and transported by a pipeline, owned by several large international oil companies, from the Camisea field to Lima. The major implications of this transaction are that the LNG produced by the Irradia plant will be sold to commercial offtakers in the Lima vicinity in northern and central Peru who do not currently have access to natural gas pipelines. Although the natural gas pipeline infrastructure in Peru is expanding, many locations will not be served for many years, if ever, due to their isolation and/or unfavorable terrain.

“By delivering LNG to customers by truck, Irradia will benefit the Peruvian economy by making LNG available now rather than years from now, thereby allowing the offtakers to replace other fuels such as diesel at a significantly lower cost and with greatly reduced emissions,” said Mr. Rice. “The cost savings from switching fuels provides an opportunity for Peruvian firms to benefit from the development of Peru's natural resources.”

Haynes and Boone has a diverse breadth of experience in projects-based finance, particularly in developing countries throughout Latin America where regional development and sustainability rely on industrial growth in areas such as mining, transportation and energy industries.

Most recently, the firm was recognized for its role in the Amapá Mineração transaction, one of Trade Finance Magazine's 2007 Deals of the Year. Haynes and Boone acted as international counsel for MMX Mineração e Metálicos S.A. (MMX), in connection with the financing of an integrated iron-ore mining and infrastructure logistics project relating to MMX's Amapá mining facility. The MMX financing consisted of a three-tranche facility aggregating US$250MM in bank facilities and R$580,000,000 of financing from the Brazilian Development Bank (BNDES).


Haynes and Boone’s Projects Practice, a principal sponsor of this year’s ProjectFinance magazine’s U.S. Power Finance Forum, is widely known for its international capabilities. The firm’s Latin American practice group, meanwhile, has been recognized as one of the leaders in Latin America by numerous business organizations and publications. They include Latin Lawyer and the Chambers USA 2007 directory, which singled out Americas Practice Group chairman Larry Pascal for a national accolade in the Latin American Investment category. As part of its Latin American practice, Haynes and Boone maintains one of the largest Mexico City practices of any U.S. law firm.

Haynes and Boone, LLP is an international corporate law firm with offices in Texas, New York, Washington, D.C., Mexico City and Moscow, providing a full spectrum of legal services. With almost 500 attorneys, Haynes and Boone is ranked among the largest law firms in the nation byThe National Law Journal. The firm has been recognized as one of the "Best Corporate Law Firms in America" (Corporate Board Member Magazine, 2001-2007), and as a Top 100 law firm for both diversity (MultiCultural Law Magazine, 2008), and women (Women 3.0, 2008).


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