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Capital structure in LNG infrastructures and gas pipelines projects: Empirical evidences and methodological issues

Axel Pierru (), Simon Roussanaly and Jérôme Sabathier

Energy Policy, 2013, vol. 61, issue C, 285-291

Abstract: This paper provides new empirical insights on the capital structure of project-financed LNG infrastructures and gas pipeline projects, by using data relating to projects whose financial close occurred between June 2004 and March 2011. Most results are consistent with the basic view of risk-averse funds suppliers. Especially, the projects located in risky countries and larger projects tend to exhibit lower debt ratios and less-concentrated equity ownerships. In addition, regasification projects appear to have a more diluted equity ownership. Methodological issues raised by the financing of these projects are also examined from a capital-budgeting perspective. In particular, the equity residual method, usually used by industrial practitioners to value these projects, should be adjusted.

Keywords: Project finance; Gas; Debt ratio (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:61:y:2013:i:c:p:285-291

DOI: 10.1016/j.enpol.2013.06.112

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