Australia Pacific LNG has signed a US$8.5bn project finance facility with a syndicate of domestic and international commercial banks and export credit agencies.

The deal is Australia’s largest LNG export project and the country’s largest project finance facility to date.

The funds will finance the second phase of the Australia Pacific LNG project, which is expected to be finalised later this year.

The facility comprises a 16-year commercial bank tranche, a 17-year Export-Import Bank of the United States (US Exim) tranche and an Export-Import Bank of China tranche.

The drawdowns under the facility, which are subject to customary conditions and government approvals, will be made over the construction phase of the project, Australia Pacific LNG says.

The project will develop liquefaction facilities, including a coal seam gas (CSG) into liquefied natural gas (LNG) project on Curtis Island near Gladstone in Queensland, in an aim to meet Asia’s increasing demand for cleaner fuel sources.

China Petroleum and Chemical (Sinopec) and Kansai Electric Power Co of Japan will purchase most of the LNG produced, US Exim says in a statement.

US Exim chairman and president Fred Hochberg comments: “Our authorisation paves the way for US companies to export equipment and services to this major LNG project and in so doing, will maintain thousands of American jobs across the country. This financing also demonstrates how the US and China can work together for our mutual benefit to foster trade and develop critically needed energy resources.”

Australia Pacific LNG chief executive officer, Page Maxson adds: “Australia Pacific LNG is developing a world class CSG to LNG project, and [the] announcement follows a comprehensive review of all social, environment and safety aspects of the project against robust international financing standards.”

The project’s main shareholders include APLNG, a joint venture between Origin, ConocoPhillips and Sinopec.

Commercial lenders on the deal include:

Australia and New Zealand Banking

BBVA

Bank of China

Bank of Scotland International

Commonwealth Bank of Australia

DBS Bank

DNB Bank

Export Development Canada

HSBC Bank USA, Mizuho Corporate Bank

National Australia Bank

Société Générale

Sumitomo Mitsui Banking Corporation

The Bank of Tokyo-Mitsubishi UFJ

Westpac Banking Corporation