Qatar Starts $850m Refinery Expansion
February 22, 1999 - 0:0
DOHA Qatar's Crown Prince Sheikh Jassim bin Hamad bin Khalifa al-Thani on Sunday officially launched construction of an $850 million expansion of the Persian Gulf Arab state's only refinery. The work is designed to raise Messai'eed refinery's capacity to 137,000 barrels per day (bpd) by 2002 from the current level of 60,000 bpd. It will be used mainly for export. Qatar, the smallest producer in the Organisation of the Petroleum Exporting Countries (OPEC), currently exports around 42,000 bpd of refined products.
Around 20,000 bpd of refined products are consumed locally and 60,000 bpd are exported to the regional market. The expansion is being funded by a $510 million syndicated loan arranged by the UK's Barclays Capital Plc. in association with a group of German and Persian Gulf banks, with repayment guaranteed by the product offtake. Japan's Mitsui & Co. has signed a 20-year agreement with Qatar's National Oil Distribution Company (NODCO), a subsidiary of the state's Qatar General Petroleum Corporation (QGPC), to buy the products.
Officials have said QGPC plans to raise another loan for around $300 million to complete the expansion once the turmoil in world financial markets eases. Oil and gas-rich Qatar has implemented several multi-billion dollar projects over the past four years through foreign investment. But the decline in oil prices and the erosion of investor confidence in emerging markets following the Asian and Russian crises has rendered foreign loans unaffordable, according to Qatari officials.
The original financing package for the expansion amounted to $850 million but was later reduced to $510 million due to crises in world financial markets, which forced investors to demand higher interest on loans. Germany's Lurgi Metallurgie GMBH, the main contractor of the project, played a key role in saving the deal from collapse by persuading its associated banks to contribute to the financing.
Qatar has said it will continue to upgrade its oil output capacity to reach 800,000 bpd by the turn of the century irrespective of oil prices. (Reutres)
Around 20,000 bpd of refined products are consumed locally and 60,000 bpd are exported to the regional market. The expansion is being funded by a $510 million syndicated loan arranged by the UK's Barclays Capital Plc. in association with a group of German and Persian Gulf banks, with repayment guaranteed by the product offtake. Japan's Mitsui & Co. has signed a 20-year agreement with Qatar's National Oil Distribution Company (NODCO), a subsidiary of the state's Qatar General Petroleum Corporation (QGPC), to buy the products.
Officials have said QGPC plans to raise another loan for around $300 million to complete the expansion once the turmoil in world financial markets eases. Oil and gas-rich Qatar has implemented several multi-billion dollar projects over the past four years through foreign investment. But the decline in oil prices and the erosion of investor confidence in emerging markets following the Asian and Russian crises has rendered foreign loans unaffordable, according to Qatari officials.
The original financing package for the expansion amounted to $850 million but was later reduced to $510 million due to crises in world financial markets, which forced investors to demand higher interest on loans. Germany's Lurgi Metallurgie GMBH, the main contractor of the project, played a key role in saving the deal from collapse by persuading its associated banks to contribute to the financing.
Qatar has said it will continue to upgrade its oil output capacity to reach 800,000 bpd by the turn of the century irrespective of oil prices. (Reutres)