Editor’s Choice: Nakilat Brings Back Project Finance

In 1997, when the Government of Qatar established Qatar Gas Transport Corp. to coordinate all of the transportation requirements for Qatar Petroleum, it was clear that there was going to be a mother lode of financing and transactional activity associated with the project – about $68 billion’s worth between QP and its partners at ExxonMobil and ConocoPhillips as they sought to produce $15 billion per year in revenue by 2010 by developing a 77 MTA LNG supply chain. When QGTC then formed a 100% subsidiary called Nakilat to undertake the construction, ownership and operation of up to 27 state of the art newbuilding LNG vessels the deals were close at hand.

As the first step in this process, QG ordered a series of QMAX and QFLEX sized vessels to be built at Daewoo, Hyundai and Samsung and delivered between 2008 and 2010. Nakilat then entered into fixed priced, date certain shipbuilding contracts with these shipyards backed by refund guarantees provided by Korean Government supported banks KEXIM and KDB. Simultaneous with signing the construction contract, Nakilat entered into back-to-back 25- year timecharter contracts with the Qatargas LNG trains.

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