Cryoperl insulates cryogenic storage chambers for liquefied natural gas (LNG) for multibillion-dollar construction projects around the world.
After having completed phase one of a major gas project in the US, the same customer recontracted it to complete the second phase. However, because its commercial bank did not have a relationship with the surety provider in the US, Cryoperl needed our support to step in and facilitate the two bonds.
We issued bonds to support Cryoperl’s $1.42m contract to construct LNG trains as part of a major project in the US. This strengthened its capabilities to win and deliver on future US opportunities.
With headquarters in Sydney and operating around the world, Cryoperl insulates cryogenic storage chambers for liquefied natural gas (LNG) for multi-billion dollar construction projects. This allows LNG to be kept at temperatures of minus 100°C and below, converting it to a compact liquid state ideal for storage and transport.
Under Cryoperl’s contract with its customer, the business is required to provide a performance bond as security. This is a standard requirement in many industries and provides the customer with the confidence that Cryoperl can carry out the contract.
Cryoperl’s Australian bank typically provides these bonds. However, when Cryoperl sought to organise bonds for its first United States venture - the business was met with an obstacle.
Fortunately, Export Finance Australia was able to help.
If we didn't have a solution from Export Finance Australia, then we wouldn't have been able to undertake this project in the US.
Opening international doors
Cryoperl Director Brent Kilkelly said that the US-specific bond requirements, combined with bond amounts above US$1 million, meant Australian banks – and other international banks – were unable to provide the security bond.
“The only companies that can issue these bonds in the US are a specific group of insurance companies,” he said. “But we don’t have the US collateral in place to underwrite a bond from a US insurance company...and a US insurance company won’t accept collateral from our Australian bank.”
The business contacted Export Finance Australia, and we proposed a solution to help the project proceed.
We acted as an intermediary between Cryoperl’s Australian bank and the US insurance organisation. The bank provided collateral to us, which was then used as collateral for the US insurer’s bond.
“The US insurance company accepted collateral from Export Finance Australia under a pre-agreed special arrangement because they understand Export Finance Australia is supported by the Australian government,” said Brent.
Our backing meant that Cryoperl was able to provide the bonds required for the project to go ahead. As the first of several US contracts awarded to the business – this was an opportunity that opened international doors for Cryoperl.
“Our expansion into the North American market was greatly assisted by the fact that we were able to meet US project requirements,” said Brent.