Kuwait National Petroleum Company (KNPC) is aiming to secure a $5bn plus export credit agency (ECA) loan, according to Reuters.

This will be the second tranche of a $10bn financing deal for the Clean Fuels Project.

KNPC stated that negotiations took place on 12 and 13 October.

The loan could close in late 2016 or early 2017. 

MEED reported in May that Japan Bank for International Cooperation, Korea Export Import Bank (Kexim) as well as ECAs from the UK, Italy and Holland would participate.

National Bank of Kuwait (NBK) Capital is the advisor and the UK’s HSBC is the coordinator.

KNOC signed the first KD1.2bn ($4bn) tranche with local banks in the first half of 2016. The mandated lead arrangers were NBK and Kuwait Finance House, an Islamic bank. NBK Capital was the adviser. Eleven local lenders participated in the syndication.

The loan has a ten-year tenor and an amortising repayment structure after a grace period.

It will be used to finance upgrades at the Mina Abdullah and Mina al-Ahmadi refineries.

KNPC awarded contracts for the KD4bn project in mid-2014.

Clean Fuels Project contracts:

• Mina Abdullah package one, valued at $3.8bn, was awarded to a joint venture ofPetrofac (UK), Samsung Engineering (South Korea) and CB&I Lummus (US).Petrofac’s share of the contract is estimated at $1.7bn;
• Mina Abdullah package two, valued at $3.4bn, was awarded to a joint venture ofDaewoo Engineering & Construction (South Korea), Hyundai Heavy Industries(South Korea), and Fluor (US);
• Mina al-Ahmadi package, valued at $4.8bn, was awarded to a joint venture of GS Engineering & Construction (South Korea), SK Engineering & Construction (South Korea), and JGC Corporation (Japan).

The project is delayed and completion is now expected in 2019.