DOLPHIN ENERGY HAS refuted recent press speculation and announced that it is keeping its options open for replacing a multibillion credit facility for its natural gas pipeline from Qatar that will expire next year. The Abu Dhabi based company, which is controlled by Mubadala Development, said it planned to arrange new financing during the first half of next year to replace US$3.45 billion of bank credit arranged in 2005.
In a statement, Dolphin confirmed it had appointed Royal Bank of Scotland as its financial adviser for the deal, but distanced itself from reports that it would issue a US$1 billion bond. “Recent press speculation on the amount of the new finance packages is inappropriate.
No decisions have yet been taken on either the value or the nature of the lending facilities involved,” the statement said. Dolphin’s financial negotiations are being monitored closely because the company is the first in the UAE to seek long-term financing for a major energy project during the current global financial crisis. The company’s previous four-year credit facility provided funds for construction of an undersea pipeline to carry gas from Qatar to an import terminal at Taweelah on Abu Dhabi’s coast, and of overland pipelines in the UAE. All parts of the construction project had been completed by October, when Dolphin started exporting gas to Oman.
The undersea pipeline, the best known part of the Dolphin project, has been operating since late last year. Dolphin said it would use the planned new funding to spread payment of the capital costs of building the pipeline network and related facilities over the next 10 to 15 years. That should leave the company with the funds to cover operating expenses, especially as it is likely to be profitable at oil prices even lower than at present.