Narrative
Full Description
Project narrative
On September 11, 2005, a syndicate of 14 banks — including China Construction Bank corporation (CCB) — entered into a $1 billion USD syndicated Islamic finance facility agreement with Dolphin Energy Limited LLC — a gas company special purpose vehicle (SPV) incorporated in Abu Dhabi, United Arab Emirates jointly owned by Mubadala Investment Company PJSC, an investment vehicle of the Government of Abu Dhabi in the United Arab Emirates (51% stake), French oil and gas company Total S.A. (24.5% stake), and American oil and gas firm Occidental Petroleum Corporation (24.5% stake) — for the Dolphin Gas 2005 Refinancing Project. This facility carried a maturity period of four years and an interest rate of LIBOR plus an initial margin of 35 basis points (bps) for the first two years and then 45 bps for the final two. This facility was Shariah compliant and structured as an Istisna'a transaction, in which the borrower enters into an agreement to construct the portion of the project relating to the transportation system on behalf of the Islamic investors, and enters into a Forward Lease Agreement for the use of those assets. This loan was secured (i.e. collateralized). The project sponsors provided guarantees for the loan facility. The $1 billion USD Islamic debt was part of a $3.45 billion USD bridge loan, including a $2.45 billion USD four-year conventional bank facility signed in July 2005 that did not feature Chinese banks. Record ID#99030 captures CCB's contribution. The proceeds of $1 billion USD Islamic debt and the $2.45 billion USD conventional bank facility were to be used to refinance the original $1.36 billion USD five-year loan from 2004 supporting the construction of the Dolphin Gas Project — the first cross-border gas project in the Gulf Arab region — which involved the development of natural gas reserves from Qatar's offshore North Field with 24 wells, two production platforms, twin sealines, then a processing plant onshore at Qatar's Ras Laffan Industry City, and then the transportation by a sub-sea export pipeline of up to 3.2 billion cubic feet a day (bcf/d) capacity of refined natural gas to Al Taweelah in the United Arab Emirates and a further connection to Oman. The project was launched in May 2008, with the transportation of the dry gas by sub-sea export pipeline from Qatar to Al Taweelah beginning in July 2007. Dolphin had a contract to pump two billion cubic feet of gas daily, equivalent to approximately about 330,000 barrels of crude oil daily through its 364 kilometer pipeline from Qatar. Oman receives 200 million cubic feet of gas daily. Abu Dhabi Water & Electricity Authority (ADWEA), Union Water & Electricity Authority (UWEC), and Dubai Supply Authority (DUSUP) all signed 25-year supply agreements with the project. Oman Oil Company (OOC) joined in 2008. QatarEnergy signed a long-term offtake contract for ethane from the project's gas processing facility. Then, on July 24, 2009, a syndicate of 26 banks — including the Industrial and Commercial Bank of China (Middle East) Limited (ICBC Middle East) — signed a $1.42 billion USD syndicated senior (loan) facility agreement with Dolphin Energy Limited LLC for the Dolphin Gas 2009 Refinancing Project. The loan carried a ten-year maturity and 6-month grace period. The loan was repayable in semi-annual installments commencing on December 15, 2009, while the final maturity date of the loan was June 15, 2019. The loan had a variable interest rate over its ten-year term: from years 1 to 3, interest was LIBOR plus 275 basis points; from years 4 to 6, interest was LIBOR plus 300 basis points; and from years 7 to 10, interest was LIBOR plus 350 basis points. Interest on overdue amounts was payable at a rate of 1% above the set interest rate. This loan was the $1.42 billion USD commercial loan tranche of the $4.113 billion USD debt package that included a $1.25 billion 10-year bond, a $218 million USD 10-year SACE-insured tranche, and $1.225 billion USD in loans provided by Total and Occidental Petroleum Corporation. Some of the funds were to be used to partially fund the construction of the Taweelah Fujairah pipeline, an onshore pipeline system in the United Arab Emirates. The main proceeds were used to refinance the 2005 Dolphin Gas project debt, the $2.45 billion USD of four-year commercial debt and the $1 billion USD Islamic finance facility. Record ID#89704 captures ICBC's contribution. In addition to ICBC, the following lenders contributed to the loan syndicate: WestLB, National Bank of Abu Dhabi, Export Development Canada (EDC), Société Générale S.A. (SocGen), Abu Dhabi Commercial Bank PJSC (ADCB), First Gulf Bank (FGB), The Royal Bank of Scotland (RBS), The Bank of Tokyo-Mitsubishi (BTMU), BNP Paribas, Bayerische Landesbank (BayernLB), Samba Financial Group, Sumitomo Mitsui Banking, Standard Chartered, Natixis, KBC Bank, Lloyds TSB, National Australia Bank, Union National Bank (UNB), Crédit Industriel et Commercial (CIC), Arab Banking Corporation, The Commercial Bank of Qatar, Arab Bank, Europe Arab Bank, Calyon, and HSBC Bank. RBS served as the financial advisor for the deal. Dolphin Energy Limited had a cumulative drawn down on the syndicated facility of $1.258 billion USD as of September 30, 2011. This bank financing was refinanced in the bond market in 2012.
Staff comments
1. This project is also known as the Dolphin Energy Refinancing Project. 2. Mubadala Development Company is an Abu Dhabi state-owned entity. 3. ICBC sources (see "Memorabilia"). refer to the borrower as Abu Dhabi’s International Petroleum Investment Company (IPIC). However, almost all other sources refer to Dolphin Energy Limited, which is majority owned by Mubadala Development Company, as the borrower. 4. Despite ICBC ("Memorabilia") stating it participated in this refinancing, neither IJGlobal nor Global Trade Review ("Best Deals of 2009: Dolphin Energy") include it in the participating banks. It is likely it joined in later syndication. 5. Established in 1984, International Petroleum Investment Company (IPIC) was created to advance Abu Dhabi’s natural petroleum wealth for the development of the emirate. Mubadala Development Company followed in 2002 to further diversify the economy. Mubadala Investment Company was created in 2017 through the merger of IPIC and Mubadala Development Company. 6. The individual contributions of the 26 lenders to this $1.42 billion USD syndicated loan are unknown. Therefore, to estimate ICBC's contribution, AidData has assumed that each lender contributed equally to the loan syndicate ($54,615,384.6154 USD).