'There are not so many banks that will be capable of doing this,' says an interested banker. 'The original transaction was extraordinarily highly structured and very complicated.'

Bankers say Qafac is interested in refinancing about $300 million of the original facility, and that it is looking for a purely commercial package to replace the combination of Canadian export credits and commercial debt arranged in 1997.

'There are two sides to this refinancing,' says another banker close to the deal. 'Qafac has just had two years of huge cash flow - much better than was ever expected - and they are currently financially very strong. On the other hand they are faced with what might be a disappearing market for MTBE [methyl tertiary butyl ether]. By the end of 2002, its use could be banned in some parts of the US, and this is Qafac's main market. The question: will they be able to displace producers elsewhere?'

The original facility had two tranches: a $140 million, 12-year commercial facility, and a $210 million export-credit-backed, 10-year package. The lead arrangers were Bankers Trust International (now part of Deutsche Bank), Banque Paribas (now part of BNP Paribas), Canada's Export Development Corporation, Sumitomo Bank, Bank of Taiwan, Chinatrust Commercial Bank, First Commercial Bankand GIB (MEED 19:12:97). It was the first non-recourse project finance deal arranged in the Gulf.