Saudi Arabia’s Rajhi Steel has selected the UK’s HSBC as adviser on a planned fully integrated steel project in the kingdom that will cost around SR15bn ($4bn) to develop.

The project, to be developed at the King Abdullah Economic City near Jeddah, has been planned for several years, but the sponsor is now pushing ahead with plans for the scheme.

Rajhi began approaching investment banks in March asking them to bid for the mandate to act as financial adviser. Other banks that are understood to have pitched for the project include the UK’s Standard Chartered, Germany’s Deutsche Bank and France’s BNP Paribas.

The company also has plans to offer 50 per cent of the equity in the project to the public through an initial public offering on the Saudi Stock Exchange (Tadawul).

Banks are expecting to be approached to finance the project before the end of the year. The Rajhi steel complex will cover 4 million square metres and include a direct reduction iron plant with capacity of 1.8 million tonnes a year.

The company announced in April that it had secured a gas feedstock agreement from the Petroleum and Mineral Resources Ministry to supply 70 million cubic feet a day of dry gas.

The appointment adds to HSBC’s advisory deals in the industrial sector in Saudi Arabia. It is already advising on four other industrial schemes in the country, including Saudi Aramco and Sumitomo Chemicals on the development of the PetroRabigh 2 project, and the local Tasnee on the development of a petrochemicals project at Jubail.