Several of the banks approached to provide funding to the $12bn Yanbu refinery in Saudi Arabia are struggling to meet the deadline for responses about their willingness to fund the project.
State energy giant Saudi Aramco and the US’ ConocoPhillips, the project sponsors, sent the request for proposals (RFP) to banks in early February, and asked for responses by 13 March.
At least one bank has now asked the sponsors for an extension to the deadline, while others say they are considering it in the expectation that they will not be in the position to provide a complete response to the RFP by 13 March.
Part of the difficulty banks are having in dealing with the Yanbu refinery is that financing has not been completed for the similarly-sized Jubail refinery, another Aramco sponsored project.
“The sponsors may be able to cope with the workload of running the two projects in tandem, but it is difficult for us to manage it internally in a short timeframe and with another deal in the same sector and the same sponsor,” says one project finance banker working on the deal.
Banks were given much longer to work on the Jubail deal, with initial invitations to fund the deal sent to them in June 2009, with a deadline to respond in September 2009.
The US’ Citigroup and the local Riyad Bank are acting as financial advisers on the Yanbu refinery (MEED 23:2:10).