Qatar Gas Transportation (Nakilat) is considering tapping the Islamic finance market as part of plans to raise $2.5 billon early next year to pay for tankers, the company’s managing director said.
The world’s largest shipper of liquefied natural gas has ordered 54 tankers to cope with growing global demand for its gas.
LNG is gas chilled to its liquid state for easier shipping.
Qatar, holder of the world’s third largest natural gas reserves, plans to more than double its LNG capacity to 77 million tonnes in 2010 from around 30 million tonnes this year.
Nakilat considered borrowing in accordance Islamic law when it raised $4.3 billion in December but decided instead to use a mix of conventional bonds, loans and export credits.
“We approached banks last time for Islamic financing, but we couldn’t get a good deal probably because of the long-term tenor. The banks now say they have some mechanisms for us,” Managing Director Muhammad Ghannam told Reuters in an interview.
The company sold $1.15 billion of bonds maturing in 2033 to help pay for 16 tankers built by South Korea’s Daewoo Shipbuilding & Marine Engineering, Samsung Heavy Industries Co. and Hyundai Heavy Industries Co., the world’s biggest shipbuilder.
Nakilat needs $2.5 billion to pay for another nine tankers and if it exercises an option to buy two more, it would look to raise $3 billion by the end of the first quarter, Ghannam said.
“We will go to capital markets, banks and Korean export credits,” he said.
“We will also try to add an Islamic tranche, but I don’t know how much it is going to be.”
Sales of Islamic bonds, or sukuk, are surging on growing demand among the world’s 1.2 billion Muslims for investments that comply with their beliefs, making it easier for companies to borrow larger amounts at longer maturities.
Deutsche Bank expects sukuk sales to reach $50 billion this year, almost five times the estimated total for 2006. Sukuk comply with Islam’s ban on lending on interest and the trading of debt, and are backed by physical assets.
Nakilat is borrowing 90% of the cost of the 25 tankers it will wholly own.
The remaining 29 ships, ranging in capacity from 145,000 cubic metres to 216,000 cubic metres, will be owned with partners, Ghannam said.
All the ships will be delivered by February 2010.
Follow us on
