ABSTRACT
This chapter discusses natural gas as a source for downstream industrial development. The significance of natural gas as an energy resource is highlighted. Next, the various activities that natural gas can cover are presented and a schematic diagram of products from natural gas is presented to provide a visual orientation of the multiplicity of benefits that can potentially accrue to a nation with gas as a natural resource. Also explored are gas-based petrochemical projects both in-country and for exports. Within this context, gas contract terms and their associated arrangements are clarified. Moreover, the concept of gas project finance is investigated where the need for a major petrochemical project to pass several tests in order to secure project financing is emphasized. In this regard, the importance of a sound, credible, feasibility report that indicates the viability of the project is underscored. In the same vein, various funding sources are presented against the backdrop of today’s credit squeeze in the financial markets. Also discussed is project insurance, an interesting adjunct that can assist in facilitating project financing, and usually provided through multilateral insurance schemes. Finally, for all financed projects light is shed on provisions to guarantee specific performance criteria, covering areas such as managerial, operational and financial performance.
