Companyasas

Shari’a Compliant Deal is Largest Ever in Oil and Gas Sector

Dolphin Energy Limited today confirmed that it has signed an Islamic financing agreement with fourteen financial institutions that will provide US$ 1 Billion to finance a portion of the Dolphin Gas Project.

Dolphin is a unique strategic regional energy initiative scheduled to come on stream at the end of 2006. It involves the development of substantial natural gas reserves from Qatar’s offshore North Field, their processing onshore at Qatar’s Ras Laffan – and transportation by export pipeline of up to 3.2 billion cubic feet a day (bcf/d) capacity of refined natural gas to the UAE.

Dolphin had earlier appointed five banks with Shari’a Supervisory Committees to lead the financing: ABN Amro Bank, BNP Paribas, Citigroup, Dubai Islamic Bank, and Gulf International Bank.

Dolphin also invited other banks, including a number that had never invested in Islamically structured financing facilities before, to join the financing.

On the occasion of closing, Ahmed Al Sayegh, CEO of Dolphin, said: “Dolphin, with the support of its shareholders, Mubadala Development Company of Abu Dhabi, Total S.A., and Occidental Petroleum Corporation, has always been interested in offering banks an Islamically structured investment option, and in contributing to the growth of the market for Islamic financing.

“We are extremely pleased to have partnered with our lead banks in the design and execution of such a substantial and innovative Shari’a compliant financing structure that has indeed attracted investors from around the world.”

Speaking for the lead banks, Aref Kooheji, Executive Vice President & Head of Corporate and Investment Banking for Dubai Islamic Bank, said: “The US$ 1 billion Islamic financing facility for Dolphin is by far the largest Shari’a compliant oil and gas financing transaction to date.

“More important than mere size, though, are the innovations achieved in this transaction, and the role they will play in the development of Shari’a compliant financing in the future. The lead banks believe that the Dolphin transaction sets valuable precedents that will serve as benchmarks for Islamically structured project financings for years to come.”

In addition to the five lead banks, the other participants in the transaction are:

• HSBC Amanah
• Barclays Bank
• Natexis Banques Populaire
• Societe Generale
• West LB
• Export Development Canada (EDC)
• Sanpaolo IMI
• China Construction Bank
• Commercial Bank of Qatar
  

The four year financing facility is structured as an Istisna’a transaction, in which Dolphin enters into an agreement to construct the portion of the project relating to the transportation system on behalf of the Islamic investors, and enters into a Forward Lease Agreement for the use of such assets.

Each of the five lead banks has an assigned role in the financing:

BNP Paribas served as Documentation Bank, led the negotiations on behalf of the banks, and played a special role in facilitating the investment of EDC of Canada. Gulf International Bank served as Islamic Facility Agent, and will lead the day to day administration of the financing. ABN Amro is serving as Security Trustee. Citigroup and Dubai Islamic Bank served as Bookrunners of the transaction, coordinating the syndication of the facility.

At the conclusion of the day’s events, Mr Al Sayegh said: “Dolphin is very proud of the dedicated and capable efforts of our lead banks in working with us on the timely structuring and execution of this historic transaction. We are delighted that many of our conventional lenders have chosen to join in our Islamic facility, and we extend a warm welcome to all the new members of the Dolphin financing family.”

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