Banks fancy Saudi pets schemes

11 November 2005
Financing for a series of petrochemicals projects planned in the kingdom is progressing rapidly. Bank bids have been submitted for both the Rabigh and Eastern Petrochemical Company (Sharq)projects while the debt packages for the Saudi International Petrochemical Company (Sipchem)and the Sahara Petrochemical Companyprojects at Jubail are out in the market.

Banks which offered commitments of more than $150 million have been called back for negotiations by Saudi Aramcoon the financing of the Rabigh integrated refinery and petrochemicals project, a joint venture of Aramco and Japan's Sumitomo Chemical Company. Pricing being discussed is understood to be in the range of 65-75 basis points on the 15-year deal, which will be split between a conventional tranche of just over $1,500 million and a $500 million Islamic portion (MEED 23:9:05).

Japanese banks are prominent among those offering the largest commitments, as a result of the sponsor and the potential for ancillary business. Sumitomo-Mitsui Banking Corporationis the financial adviser. Bids for the $972 million debt package on the $2,500 million expansion programme of Jubail-based Sharq were submitted in late October. Bank of Tokyo-Mitsubishiis the financial adviser (MEED 21:10:05).

Banks received confidentiality agreements in early November for the borrowing to fund Sipchem's phase 2 expansion. The financing is likely to be in the range of $300 million-400 million. Bids have also been invited from banks to participate in the estimated $450 million-500 million funding package for Sahara's integrated propane dehydrogenation (PDH)/polypropylene (PP) plant. HSBCwith local affiliate Saudi British Bankis acting as financial adviser on both deals (MEED 21:1:05).

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