Qatar Gas Transport to raise project finance loans

PROJECT FINANCE: Qatar Gas Transport looking to raise loans to meet repayment commitments. (Getty Images)

Qatar Gas Transport Co (Nakilat) is hoping to raise a total of $1 billion in project finance loans over the next 12 months, business magazine Middle East Economic Digest (MEED) has reported.

The firm "is approaching banks about raising debt for its third phase of financing to meet repayment commitments due between June and early 2010 for the acquisition of 25 gas shipment vessels under construction in South Korea," MEED quoted Nakilat's Managing Director Muhammad Ghannam as saying.

"We are going to go to the market very shortly to explore what is available and how much we could raise," he said.

Nakilat wants to structure the bank loans as project finance-style deals, with the ships being used as income-generating assets to repay the financing, MEED said.

The company may split the $1 billion debt between an Islamic tranche of between $300 million and $500 million and a conventional tranche of between $500 million and $700 million, MEED added without citing a source.

"We are still exploring pricing," Ghannam said, adding that his firm's investment grade rating by three agencies should enable it to raise the money at market cost.

The firm, which is 50 percent owned by the state of Qatar – the balance in public hands – was established in 2004 to own, operate and manage LNG vessels and to provide shipping and marine-related services to a range of participants within the Qatari hydrocarbon sector.

By 2010 it will own 54 LNG (liquefied natural gas) vessels to transport LNG from Qatar’s North Field, the world’s largest non-associated gas field with approximately 15% of the world’s total proven reserves, to global markets.

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