Saudi Basic Industries Corporation (Sabic) and the US’ ExxonMobil are set launch the financing for the pair’s $3.4bn elastomers project at Jubail later in October.

The project is being developed by the Al-Jubail Petrochemical Company (Kemya), a joint venture between the US and Saudi firms that has an existing petrochemicals plant at Jubail. In July, the UK’s HSBC, which is financial adviser on the project, sent non-disclosure agreements to banks and held a market sounding to gauge appetite for the deal and help it decide how to structure the debt.

Sources close to the project say the financing is expected to heavily rely on export credit agency loans and government funding from the Saudi Industrial Development Fund (SIDF) and the Public Investment Fund (PIF). A local currency sukuk is also understood to have been under consideration, although it is still unclear if it will be a part of the final funding mix. Financial close for the entire project financing is expected in late 2013.

The new elastomers project will produce more than 400,000 tonnes of rubber, thermoplastic speciality polymers and carbon black. In June, the company awarded the engineering, procurement and construction (EPC) contracts for the project.