Main gas supplier Qatar Energy plans “green” -source bonds

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RIYAD – Qatar Energy, one of the world’s leading suppliers of liquefied natural gas (LNG), is working on a plan to reinvent itself as an environmentally friendly investor through a framework that will pave the way for it to sell “green” bonds under a deal are expected to be worth several billion dollars, three sources familiar with the matter said.

Qatar Energy is working to establish an environmental, social and governance (ESG) framework that would allow it to issue green bonds – debt for environmentally friendly uses, the sources said.

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If completed, it would be the first sale of green bonds by a national oil company in the hydrocarbon-rich Gulf.

A consulting firm is working on the framework and QE sent out a request for proposals to the banks about two weeks ago, one of the sources said, without naming the consulting firm.

Once the ESG framework is established, Qatar Energy plans to structure a deal on green bonds, although the debt sell-off is unlikely to happen this year, the source said.

Qatar Energy did not immediately respond to an email request for comment.

It was not immediately clear what the proceeds from the expected sale of green bonds would be used for.

There is a lack of clear definitions or standards for what constitutes a green bond globally, with some regions and countries setting their own guidelines, including the European Commission announcing a European standard on green bonds https: // www.reuters.com/business/ Sustainable-business / eu-throws-weight-behind-new-standard-green-bonds-2021-07-06 in July.

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Previously named Qatar Petroleum before recently changing brands, the state-owned energy giant, which supplies one in five LNG shipments globally, raised $ 12.5 billion on its first issue of jumbo bonds at the end of June – the largest of 2021 in emerging markets.

The rebranding to Qatar Energy was part of the company’s new shift towards ESG considerations, another source said.

The company signed a contract in February for the first phase of its North Field LNG expansion project, which aims to increase Qatar’s LNG production to 126 million tonnes per year (mtpa) by 2027, from 77 mtpa currently.

The global watchdog, the International Energy Agency, has warned that investors should not fund new oil, gas and coal supply projects if the world is to reach net zero emissions by the middle. of the century.

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The capital expenditure of the company, its subsidiaries and joint ventures through 2025 is estimated at 300 billion riyals ($ 79.99 billion), according to the prospectus of the bond sale in June.

World leaders will meet at the United Nations COP26 climate summit https://www.reuters.com/business/environment/sticking-points-un-climate-conference-2021-10-18 starting Sunday to try to agree on deeper emission reductions at an event billed as the last big chance to slow the rise in global temperatures.

Interest in ESG-related initiatives and agreements has increased in the hydrocarbon-rich Gulf as global investors are increasingly aware of ESG risks and stern warnings about the dangers of global warming.

The Saudi government and its sovereign wealth fund have hired advisers this year to help structure similar ESG frameworks. The governor of the sovereign wealth fund, the Public Investment Fund, has said he will sell green bonds soon.

Saudi Arabia on Saturday became the second Gulf nation to announce a net zero emissions target – 2060 – after the United Arab Emirates set a goal in early 2050 to achieve carbon neutrality. ($ 1 = 3.7507 riyals) (Report by Yousef Saba and Davide Barbuscia in Riyadh, edited by Matthew Lewis)