Combined Cycle, Gas

Power and water agreement signed for Qatar’s Ras Laffan B

2 March 2005 – A power and water purchase agreement (PWPA) has been signed by the parties involved in Qatar’s second independent power and water plant (IWPP), Ras Laffan B.

International Power (IP), Qatar Electricity & Water Corporation (QEWC) and Chubu Electric of Japan, have signed a 25-year PWPA with Qatar General Electricity and Water Corporation (KAHRAMAA) for the entire power and water output from Ras Laffan B. The plant will be owned and operated by Q Power Q.S.C, in which IP has a 40 per cent equity interest, with 55 per cent held by QEWC and 5 per cent by Chubu Electric of Japan.

The total project cost is estimated to be $900m, which will be funded by a mix of debt and equity in an 80:20 ratio. For its 40 per cent share, IP’s equity investment will be $72m. The mandated lead arrangers for this financing are Bank of Tokyo-Mitsubishi, Calyon, HSBC, Gulf International Bank, Qatar National Bank and Royal Bank of Scotland. Financial Close is expected by 31 March 2005.

The combined cycle gas turbine (CCGT) Ras Laffan B project will produce 1025 MW of power and 60 MIGD of water on completion. The first phase of the project is expected to be operational in 2006, with full commercial operation in 2008. The 25-year ‘take-or-pay’ PWPA with KAHRAMAA will cover both an interim operating period starting in 2006, and the full operating period for the entire 1025 MW and 60 MIGD from 2008.

Fuel will be provided by Qatar Petroleum under a fuel supply agreement and fuel costs will be on a pass-through basis under the PWPA.

Ras Laffan B will be located 80 km northeast of Doha, the capital of Qatar, close to the site of Ras Laffan A, the first IWPP.