• Home
• Financial Services
• News Article

Dolphin confirms bond plan but no decision on value

Dolphin Energy yesterday confirmed that it intends to issue bonds to finance its operations next year but denied reports about their value.

" Dolphin Energy confirms that it will arrange a third tranche of project finance during the first half of 2009," it said in a statement sent to Emirates Business.

"This will replace the $3.45 billion (Dh12.6bn) facility arranged in 2005 to finance physical completion of the Dolphin Gas Project. The new tranche will be used to repay capital costs of the project during the coming 10-15-year period."

The company was reacting to an Emirates Business question on a report by the London-based Middle East Economic Digest about plans to issue $1bn bond as part of a $5bn financing deal expected in 2009.

"In early 2008, Dolphin Energy appointed Royal Bank of Scotland (RBS) as its project finance advisor for the new funding," Dolphin said yesterday.

"The recent press speculation on the amount of the new finance package is inappropriate... no decisions have yet been taken on either the value or the nature of the lending facilities involved."

Dolphin , the first trans-Gulf gasline, began pumping natural gas to Abu Dhabi in mid-2007 but the project was officially inaugurated early in mid-2008 in the port of Ras Laffan, the hub of Qatar's gas industry.

Dolphin officials have estimated the total cost of the project at nearly $5bn, including the $1.6bn gas processing facilities in Ras Laffan, which serves the giant offshore North Field, the world's largest single reservoir of non-associated gas, with deposits of more than 900 trillion cubic feet.

According to Dolphin 's CEO Ahmed Al Sayegh, Dolphin shareholders have financed around 30 per cent of the project while the rest was raised from loans, including $1bn from Islamic banks. Another conventional loan of $2.45bn was extended by a consortium of regional and international banks.

Dolphin project, which was launched nearly eight years ago, involved the construction of a 364 kilometre sub-sea pipeline that traversed the Gulf sea across the shores of Qatar, Saudi Arabia and the UAE.

Gas began flowing into Taweela just outside Abu Dhabi city last year at a rate of 1.6 billion cubic feet before supplies surged to nearly two bcfd this year.

Supplies through the pipeline include around 788 million cubic feet per day for the Abu Dhabi Water and Electricity Authority , 730 mmsf/d for Dubai Supply Authority, 141 mmsf/d for the Union Water and Electricity Company and 200 mmsf/d for Oman Oil Company , which began receiving gas last month.

In recent press comments, Sayegh said Dolphin was negotiating with Qatar for a possible expansion of gas supplies to meet an expected increase in demand.

"The Dolphin export pipeline has been constructed for maximum physical throughput of some 90.6 million cubic metres, nearly 60 per cent more than we will be transmitting under our current development and production-sharing agreement," Sayegh said.

"We have customers seeking further supply from us if and when we can provide them with extra gas... we are also in discussion with the Qatari authorities on the possibilities and dimensions of further gas supply in future years."

Dolphin Energy is owned 51 per cent by Mubadala Development Company , on behalf of the Government of Abu Dhabi and 24.5 per cent each by Total of France and Occidental Petroleum of the United States.

By Nadim Kawach

© Emirates Business 24/7 2008