Apicorp looks east for project lending

22 April 1994

The Al-Khobar-based Arab Petroleum Investments Corporation (Apicorp) is acting as co-arranger for a $1,190 million syndicated loan for the construction of a new oil refinery in Thailand.

Apicorp says the deal is part of a new strategy to develop hydrocarbon project financing in Asia. The institution, owned by nine Arab oil-producing countries, has also announced a two-thirds rise in net profits to $27 million for 1994.

The Thai deal is a 10-year syndicated loan with semi-annual repayments and four years' grace. Apicorp is co-arranger with Korea Development Bank, Chase Manhattan Asia and two Thai banks. Lead managers include Barclays Bank and Nippon Credit Singapore. The deal was signed on 29 March.

The borrower is Star Petroleum Refinery Company. The refinery, to be built by Thailand's PTT and the US' Caltex, will have a capacity of 130,000 barrels a day and is due to come on stream in 1996.

Apicorp is also involved in financing another Thai refinery at Raytong, owned by PTT and Royal Dutch/Shell. This deal was signed in September 1993. Both Thai projects are based on the use of light crudes from Arab states. Apicorp was one of the co-lead managers.

The move towards Asia is also reflected in the level of the institution's trade financing supporting the purchase of Gulf crudes by India, Pakistan and Turkey, Apicorp says.

Other hydrocarbon industry project financings signed since the start of 1994 in which Apicorp has been involved include the $225 million loan to Al-Jubail Fertiliser Company (Samad) for a 150,000-tonne-a-year 2-ethyl hexanol plant and the $32 million revolving credit facility for Gulf Petrochemicals Industries Company (GPIC) in Bahrain (MEED 1:4:94, Saudi Arabia; 14:1:94).

Apicorp says it is keen to develop its role as an arranger for hydrocarbon- related project financing with Arab and international institutions in 1994 and is particularly interested in projects planned in Qatar.

Apicorp participated in oil, gas and petrochemical project financing worth $1,750 million in 1993. These included the $65 million facility for the Syrian Petroleum Company's Jbeissa gas project, and contributions to the financing for a major pipeline project in Turkey and the trans- Tunisian pipeline.

Apicorp announced a 66 per cent increase in net profits to $27 million for 1993 in mid-April. A 5 per cent dividend of $20 million is proposed. Apicorp attributes the profit increase to a higher profitability from the treasury and capital markets division in 1993. Provisions were cut by 33 per cent to $10 million. There was also a increase in project finance commitments and trade finance activities, Apicorp says, although the level of lending remained unchanged at $539 million.

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