Davide and Yousef Barbuscia

RIYADH, (Reuters) – Qatar Energy is a major supplier of liquefied natural gas (LNG). Three sources familiar with the matter claim that Qatar Energy has a strategy to reinvent itself and become more environmentally-conscious for investors. This framework will allow it to offer “green” bonds, which could be worth many billions of dollars.

Qatar Energy, according to sources, is currently working towards establishing an Environmental, Social and Governance framework (ESG). This would enable it to issue green bonds, which are debts earmarked for environmental friendly purposes.

It would mark the completion of the first green bond sale by an oil company nation in the Gulf.

One source said that a consultancy was working on the framework. QE had sent out a request to proposals to banks around two weeks ago. However, the source did not name the consultant firm.

Qatar Energy intends to create a green deal when the ESG framework for Qatar Energy is in place, although the sale of debt is likely to occur later this year.

Qatar Energy failed to respond immediately to an email asking for comments.

The intended use of the proceeds from green bond sales was unclear.

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

Before being rebranded as Qatar Petroleum, this state-owned energy company, which provides one of five LNG cargoes around the world, raised $12.5 million in its inaugural jumbo bond issuance late June. 2021’s largest outflow market.

According to another source, the company’s shift toward ESG was part of Qatar Energy’s rebranding.

In February the company signed an agreement for the initial phase of North Field LNG’s expansion project. It aims at increasing Qatari LNG output by 126 million tonnes per year (mtpa), from its current 77 mtpa.

International Energy Agency (Global Watchdog) has advised that no investors will be funding new oil, gas or coal supply projects in order to ensure net zero global emissions by the end of this century.

The prospectus for June’s bond sale stated that the capital expenditure of the company and its subsidiaries through 2025 was projected at 300 billion rupees (79.99 billion).

World leaders will gather at the COP26 United Nations climate summit https://www.reuters.com/business/environment/sticking-points-un-climate-conference-2021-10-18 from Sunday to try to agree on steeper emissions cuts at an event billed as the last big chance to slow rising global temperatures.

Due to growing concern among investors worldwide about ESG risks, and the stark warnings regarding global warming, there has been a surge in interest in ESG deals and initiatives in the Gulf.

Advisors were hired by both the Saudi government as well as its sovereign wealth fund to assist with structuring similar ESG frameworks. Public Investment Fund governor, who is the head of the sovereign wealth, stated that it will soon sell green bonds.

Saudi Arabia, Saturday’s announcement of a net zero emissions goal – 2060 was the second Gulf country after 2050 by the United Arab Emirates.

$1 = 3.7507 Rials