Global oil and gas project-financing volume in 2004 increased 164%, to $43 billion, from a prior-year level of $16.3 billion, while deal flow rose 32%, to 51 transactions, according to Dealogic, a provider of data on global capital markets, credit and M&A activity. The largest project financings emphasized the increasing focus by major integrated oils on resource opportunities outside the U.S.-particularly liquefied natural gas (LNG) supply-in such areas as the Middle East and the Caspian Sea region. The biggest global oil and gas project financing last year was the $9.3-billion funding of the Qatargas II LNG facility, a project co-sponsored by Qatar Petroleum and ExxonMobil, according to Dealogic. The project will supply LNG from Qatar to the U.K. by the winter of 2007-08. This financing was followed in size by the $4.4-billion Tengizchevroil oilfield-expansion project in Kazakhstan, co-sponsored by Chevron Texaco, ExxonMobil, KazMunalGaz and Lukoil, and the $3.6-billion project financing for the BTC oil pipeline in Azerbaijan, co-sponsored by Amerada Hess, BP, ConocoPhillips, ENI, Inpex, Itochu and Socar. Dealogic notes that the loan-volume component of oil and gas project financings in 2004 totaled $26.8 billion. More than double a 2003 level of $11.6 billion, this was the highest loan volume ever related to oil and gas project financings, the firm reports. LNG projects accounted for the greatest level of borrowings last year, as 11 of these attracted $16 billion worth of loans. This is up from $4.5 billion spread across eight projects the prior year. Oilfield-development projects accounted for the next-highest loan level, with 12 deals worth $10.7 billion; gas-pipeline projects, 10 in all, drew $8.8 billion in borrowings. Barclays was the top banker, lead-arranging more than $2 billion worth of credits in four transactions. among the global mandated arrangers of loans related to oil and gas project financings in 2004. Barclays was followed by Royal Bank of Scotland, which lead-arranged 11 loan transactions worth more than $1.4 billion, and BNP Paribas, with 14 loans worth nearly $1.3 billion. -Brian A. Toal
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