The launch of a sukuk (Islamic bond) to finance part of the Jubail refinery is still planned, but currently there is no timetable for launching the deal, according to bankers close to the project.

Sources in Riyadh say that work on the sukuk, expected to be about $1bn, is still under way at the two lead arrangers, the local Samba, and Germany’s Deutsche Bank. “We don’t have a timetable and there is no pressure to get the deal into the market as the money for the project has already been raised,” says one banker close to the sukuk.

Once in place, the proceeds from the sukuk will be used to scale back the bank loans on the project, which will cost a total of $14bn to develop and includes nearly $3.5bn of commercial bank loans. At one stage, the project was also expected to include an international bond tranche, but this has now been dropped.

The rest of the financing for the project was completed in late June 2010, around a year after the deal was launched to the bank market (MEED 22:06:10).

The Jubail refinery is a joint venture of Saudi Aramco and France’s Total to develop a 400,000 barrels a day refinery that will be operated by a company called the Saudi Aramco Total Refining and Petrochemical Company (Satorp).