Narrative
Full Description
Project narrative
On June 15, 2009, Qatar Gas Transport Company Limited ('Nakilat') announced that it had raised $949 million in debt facilities from 17 international and regional banks to fund its acquisition of 25 LNG tankers. Bank of China (BOC) (#98782) and the Export-Import Bank of China (China Eximbank) (#98784) each contributed $200 million to these facilities, taking on ~49% of the overall debt. This loan marks the first time major Chinese banks entered the Qatari project finance market with deals of this size. The debt was split between a $803 million senior bank facility with a maturity date of 10 years and a $146 million subordinated bank facility with a maturity date of 17 years, both with an interest rate of 300bps plus contemporary LIBOR. The debt facilities were reportedly almost 2 times oversubscribed. The facilities were likely structured as project finance deals, where income from the purchased LNG vessels would contribute to repayment. Other lenders in the syndicate, excluding two currently unknown lenders, included Arab Bank PLC, BNP Paribas, Bank of Nova Scotia, Bank of Tokyo-Mitsubishi UFJ Ltd (MUFG), Calyon, Citibank NA, Commercial Bank of Qatar QSC, Credit Suisse, Development Bank of Japan (DBJ), Deutsche Bank, HSBC, Standard Chartered Bank, and Sumitomo Mitsui Banking Corp (SMBC), who also acted as financial advisor. Sources mentioned both Mitsubishi UFJ and BPS Paribas as arrangers of the deal. Nakilat originally sought to structure the debt as half conventional facilities and half Islamic facilities, which avoid interest-bearing loans in lieu of profit-bearing asset ownership for lenders. However, Nakilat's strong market position in a relatively turbulent time for the LNG shipping industry allowed the company to enter financing agreements in a better than expected position. These facilities were the third and final tranche ('Tranche III Debt Financing'/'Nakilat Phase III LNG Project') in Nakilat's efforts to finance its acquisition of 25 LNG tankers, which raised $6.8 billion in debt financing between 2006 and 2009. Construction of the 25 LNG tankers was contracted to three South Korean firms: Samsung Heavy Industries, Hyundai Heavy Industries, and Daewoo Ship Building & Marine Engineering. By 16 February, 2011, all 25 wholly-owned LNG tankers were being operated by Nakilat. The 25 tankers were specially designed to transport LNG from Qatar's North Field. Today, the company fully or jointly owns and operates 74 vessels, making its LNG fleet the largest in the world, representing 12% of world carrying capacity.
Staff comments
1. As both the Bank of China and the Export-Import Bank of China each contributed $200 million to the overall syndicated loan, AidData is assuming that neither bank contributed to the $145 million debt facility, which held a maturity date of 17 years. 2. No Chinese sponsors, vendors, or offtakers were involved with the deal. However, Chinese parties often purchase LNG from Qatar. In March 2009, Fu Chengyu, general manager of China National Offshore Oil Company (CNOOC) at the time, stated that he expected China to increase its imports of LNG to 60 million tons per year by 2020, necessitating increased imports from Qatar. 3. In 1997, the Government of Qatar established Qatar Gas Transport Corp. to coordinate all of the transportation requirements for Qatar Petroleum.