Qatar Petroleum (QP) and the US’ ExxonMobil will approach banks in May for commercial bank loans to fund the development of the Barzan gas project.

The project will require about $5bn of debt, split between commercial bank loans, export credit agency loans and a bond issue.

Export credit agencies involved in financing the project include Japan Bank for International Corporation and the Export-Import Bank of Korea (Kexim). The two are still finalising their commitments to the project, and once that is agreed banks will be approached.

Sources close to the project say it is still undecided if Islamic banks will be approached, but local banks will be required to fund the project in dollars as there will not be a Qatari riyal tranche.

Banks which provide the largest commitments to the commercial loan tranche of the financing, will be invited to pitch for the mandate to lead the bond issue for the project. The sponsors hope to be able to bring all three tranches of the financing to financial close before the end of the year.

The UK’s Royal Bank of Scotland is acting as financial adviser on the project.