The RasGas Example.

The financial adviser of the first RasGas venture was Goldman Sachs, contracted in 1994 to work on a unique financing package, with most of the funds secured from US sources. This was the first time Qatar received major project finance from the US.

Mobil - now part of ExxonMobil - which was a pioneer of the LNG business in Indonesia, had thrown its weight in Qatar's gas sector, got Goldman Sachs to be hired for the venture, and brought to this emirate a big number of US contractors. Mobil moved to Qatar primarily because of a dispute with the state-owned Indonesian NOC Pertamina. It was a way of showing the Indonesians what a cash-rich major like Mobil could do in one of the smallest of the gas-rich countries. It was partly thanks to Mobil that Qatar's proven reserves of natural gas - the bulk being in the offshore North Field - got to be more than 900 TCF.

A total of $3,489 million were raised for RasGas - partly within days - and these consisted of: $1,006 million in equity capital, and $2,489 million in a project financing package. The final agreement for the $2,489 million package was signed on Dec. 19, 1996.

This then was by far the largest multi-source project financing in the history of the Middle East. With Mobil's high ratings and support from Goldman Sachs and co-arranger CS First Boston in the background, the funding demonstrated the good credit worthiness of Qatar under the new regime of Shaikh Hamad Bin Khalifa Al Thani, as other projects in the emirate were also being financed by foreign banks and export credit agencies (see details of the project financing package and background of the RasGas venture in Gas Market Trends Vol. 53, No. 11). Shaikh Hamad had overthrown his obstructive father, Shaikh Khalifa Bin Hamad Al Thani in June 1995, and offered the US a huge military base.