* QP closes Barzan financing with equity, syndicated loan
* Project will supply the country's domestic gas needs
* First production line to become operational in 2014
(Adds more detail)
By Regan Doherty
DOHA, Dec 13 Qatar Petroleum (QP) has
completed a $10.4 billion financing of its Barzan gas project
even though a difficult economic climate has put a freeze on
global syndicated lending.
The project will be funded with up to 30 percent equity and
the remainder through a syndicated loan expected to total $7.2
billion, the company said in a statement on Tuesday.
The financing includes a commercial bank facility of $3.34
billion, a $850-million Islamic facility and $2.55 billion of
export credit agency financing, the statement said. ExxonMobil
, QP's partner in the project, also provided a portion of
the senior debt.
"Despite the challenging market conditions, we were able to
bring a large number of commercial banks into the deal with big
ticket sizes," QP Finance Director Abdulrahman Al-Shaibi said in
"We had a major participation from all the Islamic banks in
Qatar, which allowed us to create the largest ever Islamic
tranche in QP's financing history."
The tiny Gulf state, the world's richest nation per capita,
recently defied global gloom by raising $5 billion in a
sovereign bond issuance, capitalising on investors' appetite for
safe havens as the European debt crisis destabilises global
The Barzan project will help meet growing domestic energy
demand in the world's top liquefied natural gas exporter. It is
Qatar's most expensive since Royal Dutch Shell Plc
launched a $19 billion Pearl gas-to-liquids plant in 2006.
Qatar produces about 2.8 billion cubic feet (bcf) of gas per
day for the domestic market and plans to increase that amount to
4 bcf/day by 2015.
Initial talks on Barzan first took place between Qatar
Petroleum, which has a 93 percent stake, and oil major
ExxonMobil, which owns the remaining share, in 2007.
The project, expected to produce 1.4 bcf/day to meet the LNG
exporting giant's growing gas needs at home, was delayed to
benefit from falling construction costs, Qatar's former energy
minister said in January.
The first Barzan gas production line is expected to become
operational in 2014 with the second in 2015.
In addition to feeding power plants, it will supply natural
gas to fuel water desalination plants and other industrial users
in Qatar, while processing propane and butane for export.
Rasgas will develop and operate the project on behalf of its
Qatar Petroleum and ExxonMobil, which have a 93 percent and 7
percent stake in the project respectively.
Natural gas exports from Barzan are not currently under
consideration, Rasgas managing director Hamad Rashid Al
Mohannadi said last month.
(Reporting by Regan Doherty, Editing by Jane Merriman)