Press Release

Milbank Closes Financing For Landmark $1.1 Billion Petrochemical Project in Qatar

Qatofin Project Involves Simultaneous Closing of Three Projects and Two Financings in One Deal

LONDON, November 23, 2005 – Marking one of the most complex project financings successfully closed to date, the international law firm Milbank, Tweed, Hadley & McCloy LLP, led by partner John Dewar, represented Qatofin Company Limited (Q.S.C.), a project company owned by Total Petrochemicals France (a subsidiary of Total S.A.), Qatar Petrochemical Company Limited Q.S.C. and Qatar Petroleum, in structuring, negotiating and closing the financing of a $1.1 billion petrochemicals project in Qatar.

John Dewar, partner in Milbank’s Global Project Finance in London, stated, “Timing was paramount to the success of this transaction, which marks the first time that two distinct project financings sharing common infrastructure have sourced funds from the bank market at the same time. Working closely with the sponsors and lenders, we were able to overcome a number of logistical issues arising from the number of parties involved, the type and timing of facilities to be built, the inter-relationship between not only the projects themselves but also with pre-existing units at the site and the shareholders in the company operating the upstream ethane cracker facility (the shared cracker).”

About the Projects and Financing
The petrochemical project is comprised of three distinct units, as well as associated facilities and pipeline system:

• Qatofin’s derivative unit comprising an annual capacity of 450,000 metric tones of linear low density polyethylene (“LLDPE”). Qatar Petroleum Company Limited Q.S.C. and Total Petrochemicals France, the majority shareholders of Qatofin Company Limited (Q.S.C.), will market the LLDPE and co-products produced by the Qatofin plant through their established network of international distributors. The Qatofin project documents are governed by Qatari law, and the Qatofin finance documents are governed by English law.

• Q-Chem II’s polyethylene plant producing 350,000 metric tones per year of high density polyethylene and a 350,000 metric tones per year Normal Alpha Olefin Plant. Q-Chem II is owned by Chevron Phillips subsidiary CPCI (49%) and Qatar Petroleum (51%).

• An upstream ethane cracker at Ras Laffan Industrial City (“the Cracker”) shared by both projects with a nominal capacity of 1.3 million metric tones per year of ethylene and co-products. The Cracker will be operated by the Cracker Company, with construction costs shared by Qatofin and Q-Chem II proportional to each company’s ownership in the Cracker Company (45.59% and 53.31%, respectively.) Each will have the right to process ethane feedstock (provided by minority shareholder QP) in accordance with their shareholding; the resulting ethylene will then be transported to each company’s derivative units for conversion into derivative products. Q-Chem II will act as project manager and operator of the Cracker, based on its experience with the Q-Chem I project, which is already in commercial operation.

The key benefit of this structure is that it facilitates access of both Qatofin and Q-Chem II to a world-scale ethane cracker which significantly enhances the viability of both projects in the increasingly competitive petrochemicals market.

Given the complexity of the ownership structure, the position of Qatar Petroleum (“QP”) as shareholder in both the Q-Chem II and Qatofin projects was critical in providing a central, coordinating role, thereby facilitating communication between the two projects.

Essential to the success of the Cracker project was the agreement by the participants in the Qatofin and Q-Chem II projects on the incorporation, ownership and operation of the Cracker through Ras Laffan Olefins Company Limited (as the “Cracker Company”). Therefore in addition to obtaining the agreement on the commercial structure by the sponsors of Qatofin and Q-Chem II, it was necessary to obtain the approval of the Cracker security package from each group of banks lending to the respective projects. In order to achieve this, the Cracker project documents were carefully balanced to satisfy the lenders that there is sufficient protection in the event of operational difficulties as well as minimizing potential conflicts of interest between the participants.

The Milbank team representing HSBC Bank plc was led by partner John Dewar and associates Suhrud Mehta, Sam Hoexter and Axel Acakpo-Satchivi in the London office.

About Milbank
Milbank’s Global Project Finance Group is one of the largest and most experienced among the world’s major law firms. Renowned for its leadership, Milbank has pioneered some of the most innovative project financing techniques, and consistently ranks among the top law international law firms by industry trade publications. In 2004 the Group closed $21 billion of deals worldwide, and received a record eight “DEAL OF THE YEAR” awards from Euromoney’s Project Finance magazine. In addition Milbank was named “INTERNATIONAL FIRM OF THE YEAR” by Legal Week and “NUMBER ONE LEGAL ADVISOR” by Dealogic. With more than 100 dedicated project finance attorneys in the firm’s offices worldwide, Milbank provides legal advice under both U.S. and English law. As the project finance marketplace has evolved, Milbank’s Global Project Finance Group has expanded the range of products and services by working in conjunction with attorneys from other practice areas including financial restructuring, mergers & acquisitions, development and structured and commodities finance, and leveraged finance and capital markets.

The London office has been involved in a number of landmark project financings throughout Europe, the Middle East and Africa, on projects ranging from power generation, power transmission and distribution, pipelines, oil and gas and petrochemicals, telecommunications and space, waste disposal and recycling, water treatment, mining and natural resources, pulp/paper, transportation, to other types of infrastructure. Notable engagements include:

• Hamma Water Desalination Project (Algiers): Milbank represented Hamma Water Desalination Company in the financing of the largest desalination plant in Africa and the first PPP in Algeria.

• Umm Al-Nar (Abu Dhabi): Milbank represented the lenders of the US$1.8 billion debt financing of the Umm Al-Nar Independent Power and Water Project, the largest power and water project financing in the Middle East with the largest ever Sharia compliant Islamic financing tranche.

• Sohar IWPP (Oman): Milbank represented the project sponsor, Tractebel Electricity & Gas International, in the $550 million syndicated greenfield Sohar IWPP project in Oman. Project Finance magazine named Sohar the “MIDDLE EAST POWER & WATER DEAL OF THE YEAR” for 2004.

• Moma (Mozambique): Milbank advised the commercial and ECA/multilateral lenders in connection with the $269 million financing for the Moma Titanium Mine in Mozambique, the largest African mine project agreement completed in 2004. The deal, which achieved reasonably priced non-recourse debt financing, sets a benchmark for an African investment by a relatively small-cap project company operating in an untried market. Project Finance magazine named Moma the “AFRICA MINING DEAL OF THE YEAR” for 2004.

• Other representations include the Baymina power project in Turkey; the Salalah power project in Oman; the Taweelah A1 and Taweelah B power projects in Abu Dhabi; the Al Ezzel IPP in Bahrain; and the refinancing of the Al Manah power project in Oman.

Milbank, Tweed, Hadley & McCloy LLP is a premier global law firm headquartered in New York, with offices in Washington, D.C., Los Angeles, Palo Alto, London, Frankfurt, Munich, Tokyo, Hong Kong and Singapore. Milbank is a recognized leader in capital markets, corporate finance, project finance, acquisition finance, and other major fields of legal practice. The Firm's practice includes cross-border mergers and acquisitions and global securities transactions as well as assisting multinational clients with their cross border investments. Milbank provides a full range of services to many of the world’s leading financial, industrial and commercial enterprises, as well as governments, institutions and individuals.