REUTERS

DOHA

QATAR Petroleum (QP) has completed a $10.4 billion financing of its Barzan gas project even though a difficult economic climate has put a freeze on global syndicated lending. The project will be funded with up to 30 percent equity and the remainder through a syndicated loan expected to total $7.2 billion, the company said in a statement on Tuesday.

The financing includes a commercial bank facility of $3.34 billion, a $850-million Islamic facility and $2.55 billion of export credit agency financing, the statement said. ExxonMobil , QP’s partner in the project, also provided a portion of the senior debt.

“Despite the challenging market conditions, we were able to bring a large number of commercial banks into the deal with big ticket sizes,” QP Finance Director Abdulrahman al Shaibi said in the statement.

“We had a major participation from all the Islamic banks in Qatar, which allowed us to create the largest ever Islamic tranche in QP’s financing history.” Qatar recently defied global gloom by raising $5 billion in a sovereign bond issuance, capitalising on investors’ appetite for safe havens as the European debt crisis destabilises global markets.

The Barzan project will help meet growing domestic energy demand in Qatar. It is Qatar’s most expensive since Royal Dutch Shell launched a $19 billion Pearl gas-to-liquids plant in 2006.

Qatar produces about 2.8 billion cubic feet (bcf) of gas per day for the domestic market and plans to increase that amount to 4 bcf/day by 2015.

Initial talks on Barzan first took place between Qatar Petroleum, which has a 93 percent stake, and oil major ExxonMobil, which owns the remaining share, in 2007.

The project, expected to produce 1.4 bcf/day to meet the LNG exporting giant’s growing gas needs at home, was delayed to benefit from falling construction costs, Qatar’s former energy minister said in January.

The first Barzan gas production line is expected to become operational in 2014 with the second in 2015. In addition to feeding power plants, it will supply natural gas to fuel water desalination plants and other industrial users in Qatar, while processing propane and butane for export.