‘The final schedule is not absolutely clear, but we are expecting to get the information memorandum [IM] by 20 March, and maybe bids will be going in five weeks after that,’ says one of the interested bankers.

Partly the legacy of previous false starts on the Bapco financing, three main groups have been formed among the banks. The most clearly defined is made up of Citibank, Gulf International Bank, National Bank of Bahrainand Arab Petroleum Investments Corporation (Apicorp). The second includes BNP Paribas, HSBC Investment Bank, Bank of Bahrain & Kuwaitand potentially Bank of Tokyo-Mitsubishi. The third is made up of Arab Banking Corporation, Mizuho Financial Groupand Societe Generale. The last group comprises Arab Bank, Sumitomo Mitsui Banking Corporation, Credit Agricole Indosuezand ABN AMRO. The other banks are yet to join a group.

Bankers involved say that there is a possibility that the second and third groups might be fused.

‘This could ultimately be of benefit to the borrowers,’ says a senior international banker. ‘There is a need for healthy competition and this will come from having proper bank groups bidding against each other. It is artificial to limit the size of each bank group to four institutions – particularly when one includes the financial adviser.’

Citibank has the financial advisory mandate, and Slaughter & May are acting as legal advisers.

It is expected that the total financing package will be for $600 million, though there remains a possibility that it might be reduced to $500 million, with $100 million raised through a parallel bond issue.

‘It is likely that it will end up being split 60:40 between commercial debt and export credits,’ says another banker looking closely at the deal. ‘They will be looking for a smooth transition from the Hidd deal through Bapco to Alba [ Aluminium Bahrain], and will be trying to avoid congestion or the depletion of options.’

There should be no danger of the export credit agencies (ECAs) being exhausted. The $200 million-worth of cover for the Hidd financing was provided by the Swiss export credit agency, ERG, and the three bidders for the main engineering, procurement and construction (EPC) package on the project are French, Japanese and US companies.

‘The ECAs will, of course, be a little harder to mobilise with no sovereign guarantee in place for the Bapco borrowing,’ says the first banker. ‘But the commercial portion should attract good interest.’

It is expected that the IM will lay out a target tenor of about 12 years for the commercial borrowing. ‘This is a refinery deal and it’s hard for project finance banks to go much longer than that,’ says the first banker. ‘It’s difficult to estimate where pricing will end up, but it will be very interesting to see if details relating to feedstock prices are revealed and what the margins are.’

Paris-based Technip-Coflexip, JGC Corporationof Japan and Bechtel of the US are understood to be preparing bids for the main EPC contract for Bapco’s new hydrocracker unit. The bid deadline has been extended to 30 March (MEED 1:3:02, Oil & Gas).