QP Completes US$ 10.4 Billion Barzan Gas Project Financing

Doha, December 22 (QNA) - Qatar Petroleum (QP) has announced the completion of one of the largest oil and gas project financings ever concluded with the finalization of the US$ 10.4 Billion Barzan Gas Project. Barzan will be financed up to 30% by equity and 70% by banks and export credit agencies through a syndicated loan of US$ 7.2 Billion. The financing comprises a commercial bank facility of US$3.34 Billion, a US$850-Million Islamic facility and US$2.55 Billion of Export Credit Agency ("ECA") financing. QP's project partner ExxonMobil provided a pro rata portion of the senior debt. The Barzan is the world's largest project financing to close in 2011 and one of the largest oil and gas project financings ever concluded. HE Minister of Energy and Industry and Chairman and Managing Director of QP, Dr. Mohammed bin Saleh Al Sada, described the landmark financing as "overwhelming" as the project was able to raise more than US$8 Billion when the third-party financing target was set at only US$6.6 Billion. "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 in the global financial markets under the wise leadership of His Highness the Emir Sheikh Hamad bin Khalifa Al-Thani," said HE Dr. Al Sada. Commenting on the participation of key commercial banks, QP Director of Finance Abdulrahman Al Shaibi said "We are extremely pleased with the market response to the Barzan financing. Despite the challenging market conditions, we were able to bring a large number of commercial banks into the deal with big ticket sizes. The major participation of all the Islamic banks in Qatar allowed us to create the largest ever Islamic tranche in QP's financing history." The ECA financing arrangement includes Japan (US$1.2 Billion facility with US$600 Million provided by the Japan Bank for International Co-operation and US$600 Million funded by banks and insured by Nippon Export and Investment Insurance), Korea (US$1 Billion, of which US$700 Million provided by K-Exim and US$300 million bank-funded against a K-Exim guarantee), and Italy (US$355 million funded by banks and guaranteed by SACE). The US$1 Billion K-Exim facility is the largest project financing that K-Exim has ever concluded. QP Head of Project Finance and member of the Project Executive Committee who led the financing Meshaal Al Mahmoud, said, "It has taken a lot of efforts by the finance team for over a year to bring this challenging and unique financing structure to closing with such a huge success. We thank the senior management of QP and all the teams who worked closely with us as well as the Executive Committee for their support." RasGas, the project manager and operator, will develop and operate the Barzan Gas Project on behalf of its shareholders, Qatar Petroleum and ExxonMobil, which have a 93% and 7% stake in the project, respectively. When completed, the project will consist of onshore and offshore gas-processing facilities with the initial gas production line, Train 1, expected to be completed in 2014 and Train 2 scheduled for completion in 2015. Barzan will eventually produce 1.4 billion cubic feet of sales gas a day. The project is designed to accommodate a maximum of six trains. The Royal Bank of Scotland acted as the project's financial advisor, and White and Case acted as legal advisor to the sponsors. Allen & Overy acted as counsel to the ECAs, while Skadden, Arps, Slate, Meagher & Flom served as counsel for the commercial banks. (QNA)