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Dolphin Energy Plans to Refinance $3.45 billion of Debt in 2009

In an emailed statement, the Abu Dhabi-based company confirmed that it would arrange a third tranche of project finance during the first half of 2009. “The new tranche will be used to repay capital costs of the Dolphin Gas Project during the next 10-15 year period.

“Recent Press speculation on the amount of the new finance package is inappropriate as no decisions have yet been taken on either the value or the nature of the lending facilities involved,” the company said, denying a report on Sunday by the London-based weekly Middle East Economic Digest (MEED) that Dolphin Energy would issue a $1 billion bond early next year as part of a $5 billion financing deal expected in 2009.

Dolphin Energy’s major strategic initiative, the $4.8 billion Dolphin Gas Project — the first cross-border gas project in the Gulf Arab region — was launched in May 2008. It involves the production and processing of natural gas from Qatar’s North Field, and transportation of the dry gas by sub-sea export pipeline from Qatar to the UAE, which began in July 2007. The gas is produced offshore Qatar and is processed onshore at its Ras Laffan gas processing plant.

The plant, the largest single-build gas plant in the world, is central to Dolphin’s operations.

Dolphin, owned 51 per cent by Abu Dhabi through Mubadala Development Co., earlier this year appointed Royal Bank of Scotland Group Plc as its project finance adviser for the plans, according to the statement.

Dolphin has the contract to pump two billion cubic feet a day of gas, equivalent to about 330,000 barrels a day of crude oil, through its 364-kilometre pipeline from Qatar. Of this gas, Oman receives 200 million cubic feet per day, under an agreement signed by Dolphin Energy and Oman Oil Company.

Dolphin is extracting the gas from Qatar’s North Field under a development and production sharing agreement signed with Qatar Petroleum in 2003. Occidental Petroleum Corp. and Total SA each own 24.5 per cent in Dolphin. The entire Dolphin Gas Project includes 24 wells, two production platforms, twin sealines, processing plant, export pipelines and receiving facilities.

The Meed report, quoting unnamed sources close to the project, said on Sunday that besides the $1 billion bond, Dolphin would raise $500 million from Islamic financing resources. The financing deal should be launched in late January and is expected to close in April.

issacjohn@khaleejtimes.com