Group No-4
28NMP Dhananjay Rastogi
28NMP Harsimran Kaur
28NMP62 Jahid Ahmed
28NMP69 OM PRAKASH
28NMP Vikas
natural gas.
Ras Gas was constructed a 5.2 million metric ton per annum LNG facility in he Industrial arear of Ras
facilities.
Expected cost of project was $3.4 billion and was expected to be funded with upto 75% debt and 25%
hydrocarbon similar to crude oil ,which will be sold on a spot basis principally to refiners
export credit agencies for any project in Qatar is 8.5 years post completion with equal
semiannual payments.
Repayment of $3.5 Billion over an 8.5 Years repayment term was not even possible in an robust
years.
At that time Qatar did not have a credit rating and no offering of capital amrkets debt had been
Sovereign Ratings
It was critical for the Ras Gas financing strategy to have both sovereign credit of Qatar and
Gulf.
Goldman Sachs worked closely with Ministry of finance and other government agencies
in Qatar to provide economic, financial and other information to the rating agancies for
their evaluation.
Agencies evaluated sovereign rating for Qatar BBB by Standard and Ba2 by Moodys
committed financing.
Contractors will be useful in explaining and marketing the project to the banks and marketing the
Group
Advised to hire financial advisors to help them to select Upto 7 commercial banks and no restrictions
project.
SFCs only contemplated a two-train project, while the construction contracts were bid as
was given to JGC/MV/Kellog and signed commitment letter with a bank group
led by Industrial Bank of Japan and Credit Suisse.
Formula based lending structure was introduced whereby Ras Gas could draw
additionally flexibility to sell less that its full capacity and still achieve significant
leverage.
Funds to be Raised
$3.4 Billion
$0.9 B
Qatar
General
Petroleu
m
$2.5B
Expected Funds
Mobil
QM
$ 1.3
Bn
$1.2B
Bonds
Commercial Banks/ECA
USEXIM/UK &
ITALY/JAPAN
$400M
$800M
Matures in 2006
Matures in 2014
Non-recourse
Non-recourse
loans.
Longer maturities would improve early year distributions to the shareholders.
It could prove cheaper than the bank and ECA loans.
Delay in finalizing the additional sales.
Construction was supposed to proceed on schedule and was funded solely by shareholders
equity.
Improvement in the Credit rating of Ras Gas which was above the Sovereign rating of
Qatar .
Marketing Activity
Ras Gas represented an important component of Qatars national
strategy to develop the north field as its economic foundation for the
next century.
Ras Gas represented a key part of Mobils development of its LNG
CONCLUSION
Capital Markets offerings could be attractive because:
1. Longer maturities would improve early year
distributions to the shareholders.
2. It could be cheaper than the bank and ECA loans.
Requirement is
. Winning the market/stakeholders sentiments
. Early inclusion of stakeholders in the project before
bidding/freezing SFCs