Qatar Petroleum plans to issue up to $10 billion of bonds as soon as this quarter to fund a massive natural-gas project, according to a person with knowledge of the matter. The state producer is inviting banks to arrange what would be its first dollar bonds, the person said, asking not to be identified because the information is private. The company is seeking to sell between $7 billion and $10 billion of five, 10- and 30-year notes, the person said. That would make it one of the largest corporate deals this year and one of the biggest of any kind from emerging markets.
Acording to sources, the money would go toward the North Field expansion. It aims to raise output capacity more than 50% by 2027 to 126 million tons annually, which will cost $29 billion.
Qatar’s government issued a $10 billion bond in April last year and attracted nearly $45 billion of orders. Like the sovereign, QP is rated AA- or its equivalent by Moody’s Investors Service and S&P Global Ratings.
The world’s top liquefied natural gas (LNG) supplier sent banks a request for proposals for the planned debt sale in the last few weeks, the sources said, with one of them adding it will likely raise billions of dollars.
“It will be a big deal,” the source said.
QP, which did not immediately respond to a request for comment, plans to vastly expand its capacity in coming years. The company said last month it would take full ownership of its Qatargas 1 LNG plant, the country’s first, when its 25-year contract with international investors including Exxon Mobil Corp and Total SE expires next year.
The planned debt sale comes as energy companies in the region seek different means to raise cash after they were pummelled last year by the double shock of the COVID-19 pandemic and oil prices collapsing. QP last year was looking at job and cost cuts to cope with the slump in oil and gas demand caused by the new coronavirus.
Sources told Reuters last week Saudi Arabia’s oil giant Aramco is planning to refinance a $10 billion revolving credit facility. It is also working on a $12.4 billion deal to monetise its oil pipelines network.
Abu Dhabi National Oil Company (ADNOC) has done similar infrastructure deals that lease ownership of assets, raising billions of dollars in the past two years. It is also planning initial public offerings of its drilling business and its joint venture with chemical producer OCI.
QP, wholly owned by the Qatari government, has sold bonds through private placements in the past, including in dollars and in Japanese yen. It has more than $3.25 billion in outstanding loans and bonds, according to Refinitiv data.