Bahrain’s oil & gas industry gets financial boost

Nogaholding, the investment and business development arm of Bahrain’s National Oil and Gas Authority (NOGA) has recently announced it has signed a five year $570mn multi-bank Murabaha facility to support investment into a number of large-scale oil and gas projects within the Kingdom of Bahrain.
The $570mn sharia-compliant, five-year financing is the first foray for nogaholding into the syndicated credit markets.
It also ‘marks the beginning of a number of strategically important growth projects for nogaholding and Bahrain’s energy industry’, the company says in a statement.

The transaction was well-received by the market and demand from participating banks was strong, despite the volatile market conditions as a result of continued low oil prices. The facility size was increased by 60% due to investor demand and the book was significantly oversubscribed.

The syndicated facility consists of the following ten international, regional and local banks: Arab Banking Corporation (ABC), Ahli United Bank (AUB), Arab Petroleum Investments Corporation (APICORP), Gulf International Bank (GIB), and National Bank of Bahrain (NBB), Qatar Islamic Bank (QIB), Kuwait Finance House (KFH), The Bank of Tokyo-Mitsubishi UFJ (MUFG), BNP Paribas, and HSBC.

“We were very pleased with the strong support for the transaction among Bahraini, international and regional banks alike. This is an investment in the future and highlights our continued efforts to grow the Kingdom of Bahrain’s oil and gas assets and position our nation as a significant regional and international player,” Shaikh Mohamed bin Khalifa Al Khalifa, CEO of nogaholding, was quoted as saying in a press release.

This is the first time nogaholding has accessed the financing markets for a multi-bank facility since its creation in 2007. nogaholding has substantial expansion plans and expects to invest in excess of $7bn across several separate ventures in the next five years.

The facility will enable nogaholding to invest in a number of profitable projects in Bahrain. These include three key developments: the BAPCO Modernisation Programme, the LNG Import Terminal, and the Bahrain Gas Plant Project (part of Bahrain National Gas Expansion Company).

For BAPCO, nogaholding will invest in a substantial modernisation programme.

In addition, nogaholding will support the Bahrain LNG Import Terminal Project launched in December 2015 on a BOOT (‘build-operate-own-transfer’) basis with a consortium of international investors (Teekay, Samsung C&TR and GIC).

The project comprising an offshore receiving and regasification facility, subsea gas pipelines and an onshore gas receiving facility.

nogaholding will also invest in the new gas plant project of the Bahrain National Gas Expansion Company, which is set to further increase gas processing capacity within Bahrain for the production of natural gas liquids (NGLs).

“We are embracing the opportunity presented by the prevailing challenging market conditions and are pleased our new bank syndicate shares our enthusiasm and excitement for the robust projects this financing will used for,” Al Khalifa said.