The credit line will cover performance risks for Luksar's planned five-year gas exploration programme in contract area A in the Rub al-Khali (Empty Quarter), which covers 29,900 square kilometres (see Oil & Gas).

'In close co-operation with ABN Amro, we have extended a standby letter of credit on behalf of the natural gas joint venture between Lukoil and Saudi Aramco for the purpose of performance risks for the exploration contract,' Tom Lind, head of SHB's structured finance division, told MEED on 7 March.

According to Lind, the standby letter of credit will be syndicated by the arrangers on the local and international market within weeks. 'We hope to complete syndication in March,' Lind said.

For SHB, the Luksar transaction will mark the beginning of increased structured and project financing activity in the domestic oil and gas, petrochemicals, power and telecommunication sectors. 'The SHB management has seen the need for structured and project financing in the domestic financial market,' Lind said. 'We are now working on a couple of other transactions.'