The financing bid comes nearly one year after Arcelor decided to delay the plant while it waited for engineering procurement and construction (EPC) prices to fall.

The world's largest steel maker initially approached banks about the project in early 2008. Construction of the plant, a joint venture with the local Bin Jarallah Group, was to start once the finance was in place. But the project was delayed because of difficulties in securing project finance, coupled with the changing EPC market.

The company is now keen to go ahead with the development despite the recent fall in global steel prices. Arcelor Mittal expects steel prices to recover in 2011, when the refinery is to produce its first steel.

Neither Arcelor Mittal nor Bin Jarallah would comment on the original prices for the factory, but one Saudi banker close to the project tells MEED the EPC costs have fallen significantly.

"The project is looking for funding again after deciding it was happy with the new EPC price that was offered," says the banker.

The aim is to complete the financing by the end of July. Saudi Industrial Development Fund (SIDF) is also in talks to provide some of the debt.

The plant, which will be only the second seamless tube steel mill in the GCC, will have a capacity of 500,000 tonnes a year.

Arcelor Mittal will hold a 51 per cent stake in the project, with Bin Jarallah holding 49 per cent.