Dana Gas, the Middle East’s natural gas company, has secured, through its wholly owned subsidiary Dana Gas Explorations FZE, a US$100 million term facility for the Zora Field development project in Sharjah, United Arab Emirates
This facility will contribute the debt component of the financing needed to complete the project and bring the Zora gas field on-stream. The estimated investment on the project is US$160 million.
The credit facility, with Emirates Bank NBD Capital Limited as Initial Mandated Lead Arranger, Bookrunner and Coordinator, will be provided by the following syndicated banks in their role as “Mandated Lead Arranger and Joint Bookrunners”, Emirates NBD Bank, Commercial Bank International, Commercial Bank of Dubai and Barwa Bank.
Emirates NBD Bank will also act as the Global Facility Agent, Term Facility Agent, Security Agent and Account Bank while Barwa Bank will act as the Murabaha Investment Agent for the Shariah tranche of this loan.
The repayment for the term facility is over a period of 15 quarterly investments and will commence in 2H 2015 on completion of the project and gas production goes on stream, subject to a cash sweep mechanism. The term facility is currently scheduled to mature on 30 November 2018. As of 30 June 2014, Dana Gas has spent approximately US$ 49 million as part of the equity financing for the project.
Dr. Patrick Allman-Ward, Chief Executive Officer of Dana Gas said:
This financing agreement demonstrates the confidence leading banks and financers have towards the Zora project. The project work is proceeding as per plan and we remain committed towards bringing the project on-stream in the first half of 2015. Natural gas produced from the field will provide a much needed source of clean energy for the benefit of the Northern Emirates of the UAE.
Dana Gas signed a 25-year concession agreement for the Shrajah Western Offshore block, which includes the Zora field, with the Sharjah government in March 2008. The government of Sharjah holds 50% working interest in the project, according to the agreement.
The project will include horizontal drilling of the two wells, construction of an offshore pipeline, installation of a wellhead platform, and other exploration activities.
The Zora Gas Field, which spans the territorial waters of Sharjah and Ajman, comprises a tilted fault block structure with a closure of some 25 km2. Once on-stream, Zora will provide an additional source of gas for local power generation in the northern Emirates with an expected production capacity of 40 million standard cubic feet per day (mmscfd).