ExxonMobil and Qatar Petroleum Issuing Debt to Expand LNG Facility

A joint venture between Qatar Petroleum and ExxonMobil plans to sell up to $2.3 billion in bonds to finance the expansion of liquefied natural gas facilities in Qatar.

Ratings agencies Moody's, S&P and Fitch today gave ratings to the notes, which will help fund Qatar's RasGas's LNG trains 6 and 7 and outstanding loans. S&P assigned an A rating, Moody's AA2 and Fitch A+.

Qatar, the world's top LNG exporter, plans to double its capacity this year to 62 million tonnes per year as it brings online the world's largest trains, including RasGas train 6.

RasGas, one of two LNG producers in Qatar, has a $665 million bond maturing in September, according to Reuters data.

Qatari state-affiliated companies are eyeing between $3 billion and $4 billion in bond sales this year to refinance debt and finance new projects as spreads narrow, Abdul-Rahman al-Shaibi, a member of Qatar's State Finance Policy Committee said in June.

RasGas's new debt will be structured as a 144a issue, meaning the bond can only be sold to certain institutional investors in the US.

HSBC, Credit Suisse and Citigroup will manage the sale, an HSBC spokesman said.

The bonds are expected to be structured as a $500 million issue with three-year maturity, a five-year $1.115 billion bond and 10-year notes worth $615 million which would be repaid from project cash flows, S&P said.

The sale forms part of a $10 billion programme launched in 2005. London-based MEED reported on 17 June 17 RasGas aimed to complete the deal by the end of July.

RasGas expects the start-up of its train 7 to be in late 2009. ExxonMobil, the biggest foreign investor in Qatar, holds a 30% stake in each of train 6 and train 7 and the remainder is owned by state-run Qatar Petroleum.

The other LNG producer in Qatar is Qatargas.

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