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

  • Focus Area -
  • Type KAPSARC journal article
  • Date 1 October 2013
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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. © 2013 Elsevier Ltd.

http://www.sciencedirect.com/science/article/pii/S0301421513006198

Energy Policy

Authors

Axel Pierru

Axel Pierru

Acting Vice President/ Program Director In February 2023, Axel Pierru was assigned as Acting Vice President of Knowledge and Analysis for the Center. He received…

In February 2023, Axel Pierru was assigned as Acting Vice President of Knowledge and Analysis for the Center. He received his Ph.D. in economics from University Paris 1 Pantheon-Sorbonne (France). He also holds an HDR degree, which is a French accreditation to supervise research. In 2007, Dr. Pierru was appointed Chevalier dans l’Ordre des Palmes Académiques (knighthood award in the academic field) by the French Ministry for National Education. He is the recipient of the 2023 OPEC Award for the Best Energy Research Paper (issued by OPEC for the first time).

In 2011 Dr. Pierru joined KAPSARC in Saudi Arabia, after spending 15 years at IFP Energies Nouvelles (France) where he led research, consulting and training projects and taught energy economics and finance to postgraduate students.

Dr. Pierru has served in various leadership positions at KAPSARC, including as interim Vice President for Research. Since 2014 he has been a program director, and currently he leads the Energy Macro & Micro-economics Program.

He undertakes applied research that combines methodological innovation with practical relevance for policymaking. His expertise covers energy economics, policy, finance, modeling, the oil market, and commodity-exporting economies.

Dr. Pierru has a proven track record of methodological innovations with 50 journal papers to his name. He has been a key contributor to the development of novel lines of research, such as the role of OPEC in stabilizing the oil market, the economic modeling of price controls, or the evaluation of investment projects by international oil companies facing various tax systems.

He also coauthored with Denis Babusiaux the book Corporate Investment Decisions and Economic Analysis: Exercises and Case Studies (2005), which is the fruit of years of teaching, consulting and research, and contains numerous examples from the energysector.

Expertise

  • Energy modelling
  • Energy economics
  • Energy policy
  • Oil pricing and finance

Publications See all Axel Pierru’s publications

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