Major expansions this year at oil and gas facilities in Qatar will require up to $2 billion in financing to be put in place, according to estimates.
Bankers have said that the largest amount will be sought for RasGas, which is expected to raise about $1.4 billion, followed by Qatar Fertiliser Company, which is likely to borrow $400 million, a report in Oil and Gas News, a sister publication of TradeArabia, said.
These projects are in addition to the $6 to $7 billion which will be needed to produce gas from the North Field and transport it by pipeline to the UAE and, potentially, Kuwait and Bahrain.
For the pipeline projects, however, Doha will not be directly involved in the funding process, as this is being handled directly by the government-sponsored entities of Abu Dhabi and Kuwait, which are buying the Qatari gas.
Qatar has borrowed more than $9 billion in the past six years to fund a number of energy projects, both upstream and downstream, and officials say that the country will continue to do so for economic development projects. Concerns about international markets being overloaded with Qatari exposure have been expressed in some quarters, following the tapping of the market for three major projects in 1999 for a total of some $1.6 billion, while sovereign borrowing requirements were rising.
Qatar has been witness to some of the largest project finance packages in the oil and gas sector.
For the RasGas expansion, which will see capacity more than doubled to 14.9 million tonnes per year (tpy) of LNG, the project will be funded 70 per cent by external borrowing and 30 per cent by shareholders' equity. RasGas is 70 per cent owned by the state's Qatar Petroleum (QP) and 30 per cent by ExxonMobil Corp.
Qatar Fertiliser Company (Qafco) is poised for a fourth expansion to add 2,000 tonnes per day (tpd) of ammonia and 3,200 tpd of urea to its existing capacity of 3,800 tpd of ammonia and 4,500 tpd of urea.
The company, 75 per cent owned by Qatar Petroleum and 25 per cent by Norway's Norsk Hydro, has mandated Bahrain-based Arab Banking Corporation (ABC), Arab Petroleum Investments Corporation (APICORP), Gulf International Bank (GIB), HSBC Investment Bank, Qatar National Bank and Barclays Capital to arrange the syndicated loan.
Soaring government revenues and an expansion of the Qatari economy have eased concerns about the country's debt burden.
The country is currently rated Baa2 by Moody's Investors Service and BBB by Standard & Poors for long term credit.
The debt mountain is now considered manageable, with less than half of the total external debt classified as direct government debt. Most of the rest was secured to finance the construction of major export projects such as Qatargas and RasGas, which are now producing to their full capacities.
However, repayment obligations are on the rise for this year and next, before falling in 2003.
