Finance for energy transactions
We coordinate the payment side of oil and gas trades between buyers, sellers and their banks, so the documents, the payment instrument and the delivery schedule agree with one another.
Our role
We are not a bank and we do not lend. We structure and coordinate; regulated banks and financiers provide the funds.
Transaction finance
International commodity trades carry large commitments, cross-border rules, currency movements and commercial risk. We work with both parties and their banks to agree a payment structure before the contract is signed.
Payment structures we coordinate
- Documentary letter of credit
- Issued by the buyer’s bank and payable against shipping documents. We align the wording of the credit with the contract so compliant documents can be presented the first time.
- Standby letter of credit
- A bank’s undertaking to pay if the buyer does not, used alongside open-account or cash-against-documents terms.
- Cash against documents
- Payment by bank transfer when the agreed documents are released, usually with inspection at loading.
- Escrow
- Funds held by a regulated third-party escrow agent and released when the contract conditions are met.
The same approach applies to a single spot cargo and to a long-term supply agreement.
How a documentary letter of credit works
Swipe sideways to see the whole diagram.
- Buyer and seller agree in the contract that payment is by documentary letter of credit.
- The buyer asks its bank to issue the credit.
- The credit reaches the seller’s bank, payable against shipping documents.
- The seller loads the cargo and presents the shipping documents.
- When the documents comply with the credit, the seller is paid.
Project finance
For storage, terminal and other energy infrastructure projects, we help sponsors prepare for lenders and introduce them to financiers active in the sector.
- Review of the project’s supply and offtake contracts, which lenders test first
- Preparation of the information memorandum and data room
- Introductions to banks, funds and export credit providers
- Coordination between sponsor, lender and advisers through due diligence
Documentation and settlement
Most payment delays are document discrepancies. We check the set before it reaches the bank.
- Commercial invoice, bill of lading and certificates of quality, quantity and origin checked against the payment instrument
- Payment schedule tracked against loading and delivery dates
- Financial due diligence on the counterparty: registration, ownership and banking references
- Transaction monitoring from contract signature to final settlement
