Qatar Petroleum is issuing dollar bonds for the first time in 15 years as it seeks to boost output of liquefied natural gas. The company may aim to raise around $10bn. The producer is selling a four-part deal with tranches maturing in five, 10-, 20- and 30- years, according to a person familiar with the matter. The company’s last dollar bond sale was in 2006, when it raised $650m. The debt will help the Gulf state pump more gas from the giant North Field that extends into Iran’s waters. Qatar – one of the world’s richest countries per capita – is planning to spend $29bn to lift its output of liquefied natural gas to 110 million tons per annum by 2027 from 77 million tons. The bond offering comes just as natural gas prices in Europe – home to some of Qatar’s biggest buyers – have jumped to the highest level in nearly 13 years amid a global supply crunch. Qatar is embarking on an expansion to one of the world’s biggest LNG export facilities amid efforts in Europe and Asia to reduce dependence on coal.
QP has capital expenditure needs of around $59bn in the next five years. The Qatari government itself doesn’t need to return to the debt market any time soon. Still, it may choose to take advantage of low interest rates in the US and Europe, which make it cheaper to issue in dollars and euros. The country has sold $34bn worth of sovereign bonds since 2018. QP is rated AA- or its equivalent by Moody’s Investors Service, S&P Global Ratings and Fitch Ratings. That is the same as the government, whose dollar bonds have an average yield of 2.3 per cent. Citigroup and JPMorgan Chase & Co. are global coordinators for the transaction. Bank of America Corp., Credit Suisse Group, Deutsche Bank, Goldman Sachs Group, HSBC Holdings, Mitsubishi UFJ Financial Group and Qatar National Bank are also managing the sale.