Oil major Saudi Aramco has received the final approvals necessary to launch a $1bn sukuk (Islamic bond) to finance the Jubail refinery it is developing in partnership with France’s Total.

Sources in Saudi Arabia confirm that the project company behind the Jubail refinery, Saudi Aramco Total Refining and Petrochemical Company (Satorp), has now received approval to go ahead with the deal from the market regulator the Capital Market Authority (CMA).

The local Samba and Banque Saudi Fransi, along with Germany’s Deutsche Bank have been appointed to lead the deal, which could launch in the next few weeks.

The sukuk sale will be denominated in Saudi riyals, and is expected to be limited to Saudi nationals, in line with Saudi Stock Exchange (Tadawul) regulations, which limit the ability of foreigners to invest on the local market. An international bond tranche to help fund the project was also considered, but that plan was subsequently dropped (MEED 1:9:11).

In total, the Satorp project will cost about $14bn to develop. Once the sukuk is in place, it is expected to be used to scale-back the loans in a nearly $3.5bn commercial bank tranche of the project’s financing.