Delayed coker - refinery, Chile

Award-winning investment financing

We specialise in customised financing. The state-owned crude oil company ENAP, the largest provider of crude oil products in Chile, commissioned us as a member of an international consortium with the construction of a delayed coker in Concon: a turnkey refinery facility to convert heavy crude oil as well as "bottom-of-the-barrel" residuals into valuable products like lower-emission fuels. As partner of the consortium we were not only responsible for the construction of the plant, but we were also a co investor. Together with ENAP we developed a complex project and financing concept with an investment volume of US$430 million. This was based on the partners' willingness to commit themselves over the long term: our share in the SPV's equity capital has been invested for twenty years.

Intelligent financing solution

The delayed coker project has something in common with many of our projects: it does not correspond to any of the known financing types, neither project financing nor the classical corporate financing. On the one hand private capital was to be integrated in investments, on the other ENAP was to retain full operative and entrepreneurial control. The solution to this challenge lay in a customised project concept that we had already developed in earlier projects together with ENAP. For this purpose we took over a share in an SPV so that we could operate as the owner, operator, and borrower, and provided the end user ENAP with the production capacity as part of a financial lease concept. This new type of business model was not only successful in the New York world of banking, but was also greatly acclaimed by experts: in December 2005 the internationally acclaimed magazine "Project Finance International" conferred the title "Latin America Deal of the Year 2005" on our financing model, describing it as the most significant project-based financing transaction concluded in Latin America in 2005. This award at the same time identified us as a competent and reliable partner that responds flexibly and individually to customer wishes and project requirements and looks beyond its own horizons.

Long-term business contacts

We had already developed and realised this project structure with the same client before the delayed coker project. In 2000 ENAP was scouting for a partner to build a diisopropyl ether plant (DIPE) who at the same time was willing to invest in the project as well. This was the beginning of an extraordinary financing concept. The DIPE project, with an investment volume of about US$30 million, was financed, and the plant completed in 2003. There then followed further orders on the same pattern: two desulphurisation plants in 2002 and a mild hydrocracker in 2004.

The largest refinery capacity in Chile

Our client the state company ENAP is one of the major companies in Chile achieving an annual turnover in 2006 of about US$7.9 billion. As a key strategic company it is fully owned by the state. It operates facilities at three principal locations: Punta Arenas, Talcahuano (Concepción), and Concón, and owns a share of about 90% in Chile's crude oil products market (petrol, diesel, aviation fuel, asphalt). Processing over 100,000 barrels of crude a day the refinery in Concón is the principal supplier for the Santiago region. ENAP has access to the largest refinery capacity on the Pacific coast.