State-owned QatarEnergy has secured a five-year $3-billion loan from a group of Chinese banks as Qatar’s LNG exporter continues to struggle with shipping sizeable volumes to international markets.
QatarEnergy has secured the loan from Bank of China, Industrial and Commercial Bank of China Limited (ICBC), Agricultural Bank of China (ABC), and China Construction Bank (Asia), anonymous sources with knowledge of the agreement told Bloomberg on Wednesday.
The loan suggests that China continues to back companies in the Persian Gulf with funding despite the war, which has led some investors to temporarily pull back.
QatarEnergy plans to use the loan for general working capital, according to Bloomberg’s sources, as Qatar continues to struggle to deliver LNG cargoes via the Strait of Hormuz.
At the end of last month, QatarEnergy extended the force majeure on LNG deliveries to Asia and Europe by another month through the end of November, as LNG cargo traffic through the Strait of Hormuz remains largely blocked amid the protracted U.S.-Iran stalemate over the chokepoint and pathways to end the war.
Six months since the Iran war crippled Qatar’s LNG exports via the Strait of Hormuz, the world’s second-largest liquefied natural gas exporter has lost $24 billion in sales as exports tumbled by as much as 96%, Reuters calculations showed in August.
LNG traffic at the Strait of Hormuz appears to be ticking up despite increased threats to shipments in the chokepoint in recent days. The increase in LNG shipments extends the rebound in transits in September, but the flows of liquefied natural gas remain over 75% below the levels seen before the Iran war.
“We have decided not to use pipelines as an alternative based on commercial and technical criteria,” Saad Sherida Al-Kaabi, President and CEO of QatarEnergy and Qatar’s Minister of State for Energy Affairs, said last month, commenting on whether Qatar would consider alternatives to the Strait of Hormuz.
By Tsvetana Paraskova for Oilprice.com
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