Qatar Petroleum and the US’ ExxonMobil has reached financial close on one of the largest parts of the financing package for the $10.4bn Barzan gas project on 13 December.

The parts of the deal that have reached financial close is the $3.9bn bank debt, including both a $3.3bn conventional bank tranche, an $850m Islamic debt tranche, export credit agency guaranteed loans and some financing provided by ExxonMobil. Additional direct loans by several export credit agencies totalling about $2.5bn are expected to reach financial close early in 2012.

Barzan has been the largest project to try to raise financing in the Middle East during 2011. Although some aspects of the deal have yet to reach completion, it has attracted a huge amount of interest from a variety of investors. The bank group includes more than 30 banks.

However, plans to raise additional funding from the bond markets were delayed earlier this year as a result of the turmoil in financial markets stemming from the Eurozone debt crisis. The bond would have been used to scale back the bank debt if it had been completed. It is unclear if the project sponsors will look at going ahead with the bond issue next year.

Barzan will produce 1.4 billion cubic feet a day(cf/d) of natural gas for to meet the country’s rising demand for gas in industrial and power projects.