Dec 13 2011 |
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2ndUPDATE: Qatar Petroleum: Closes Financing On $10.4B Barzan Proj
Tuesday, Dec 13, 2011
-- QP says concludes financing against challenging market conditions
--Syndicated loan expected to be $7.2 billion
--Barzan project to meet Qatar's domestic energy demand
By Alex Delmar-Morgan
Of ZAWYA DOW JONES
In an emailed statement, Qatar Petroleum said the project, in which Exxon Mobil Corp. (XOM) is a partner, will be financed with up to 30% equity and the remaining 70% by a combination of banks and export credit agencies, or ECAs, in the form of a syndicated loan expected to total $7.2 billion. Exxon Mobil also provided a pro-rata portion of the senior debt.
One Doha-based banker said a positive outlook for Qatar's hydrocarbons-driven economy--projected by the International Monetary Fund in September to see real gross domestic product growth of 18.7% in 2011--was one key incentive for investors.
"Where people are facing challenges around the world, some emerging markets like Qatar are havens for investment and investors are taking advantage of that," said HSBC Qatar Chief Executive Officer Abdul Hakeem Mostafawi.
In January, QP and Exxon Mobil signed a joint-venture agreement to implement the Barzan scheme, which is scheduled to come on stream in 2014 and will produce 1.4 billion cubic feet a day of natural gas from onshore and offshore processing facilities.
The gas will be supplied to power stations from Qatar's giant North Field and help meet the Gulf Arab state's soaring domestic power requirements as its population expands and it embarks on a huge infrastructure building program that's partly driven by the need to prepare for the hosting of the 2022 FIFA World Cup. Qatar sits on the world's third-largest gas reserves after Russia and Iran.
"This project is of significant importance to the future development of Qatar, and this financing marks an important step in this direction and clearly reflects the strong position of the Qatari economy," Qatar oil minister Mohammed bin Saleh Al Sada said in the statement.
Despite choppy global markets, the project secured sizeable commitments from banks, QP said.
State-controlled liquefied natural gas producer RasGas Co. will manage and operate the Barzan project, which is owned 93% by QP and 7% by Exxon Mobil. Royal Bank of Scotland was the financial advisor.
The financing included a $3.34 billion commercial bank facility and a $850 million Islamic facility, along with $2.55 billion in ECA financing. Some $1.2 billion of the export credit financing was arranged from Japan, the statement said, with $600 million each provided by the Japan Bank For International Cooperation and Nippon Export and Investment Insurance. South Korea and Italy also provided financing.
-By Alex Delmar-Morgan, Dow Jones Newswires; +974 6659 9818; alex.delmar-morgan@dowjones.com
Copyright (c) 2011 Dow Jones & Co.
(END) Dow Jones Newswires
13-12-11 1310GMT
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