Qatargas 3 PIM out

16 September 2005
Banks have been invited to respond by 28 September to the preliminary information memorandum (PIM) on the commercial debt package to fund the integrated Qatargas 3liquefied natural gas (LNG) project. Societe Generale is acting as financial adviser (MEED 19:8:05).

Banks are being asked to bid for take-and-hold positions of $100 million. The tenor is 16 years and commitment letters are due to be signed on 6 October, with documentation completed by the end of November and financial close reached in mid-December.

The sponsors are looking for bank commitments of $2,550 million, but with a view to an eventual commercial tranche of $1,550 million. The final amount will be dependent on the Japan Bank for International Co-operation (JBIC) providing about $1,000 million, for which advanced negotiations are ongoing.

The PIM suggests that if JBIC funding is not forthcoming, a capital markets option is being considered by Qatargas 3, a 70:30 joint venture of Qatar Petroleum (QP)and the US' Conoco Philips. A credit rating is being sought. Ras Laffan Liquefied Natural Gas Company II(RasGas II), a tie-up between QP and the US' ExxonMobil Corporation, recently raised $2,250 million through a bond issue to part-finance the RasGas III LNG project (MEED 12:8:05).

In addition, the US' Export-Import Bank is providing $300 million to Qatargas 3 and Conoco will raise $1,216 million on its own account. Qatargas 3 is the project company for train 6 at the Qatar Liquefied Gas Company (Qatargas)complex. Total project costs for the 7.8 million-tonne-a-year train are estimated at about $5,800 million.

Royal Bank of Scotlandis understood to have been appointed financial adviser on Qatargas 4, a joint venture of QP and the Royal Dutch/Shell Group, which will handle train 7. Negotiations have been held with a team of Japan's Chiyoda Corporation and Paris-based Technipfor the engineering, procurement and construction (EPC) contracts covering both trains (MEED 6:5:05).

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