Oman Oil Refineries & Petroleum Industries Company (Orpic) has appointed the UK’s HSBC and the National Bank of Oman (NBO) to act as advisers on an up to $1.5bn expansion project.

The financing could also include refinancing around $2bn of existing debt, pushing the total deal size up to around $3.5bn. The two banks were appointed in late May and will soon start evaluating all options for financing the expansion, including whether to also refinance existing debt at the same time.

Banks had initially pitched to Orpic for the advisory role in late 2011, but were told in March that they had to rebid for the work with a local partner. HSBC teamed up with NBO as a planned merger with Oman International Bank had yet to be finalised.

Orpic will use the new financing to fund the expansion of its Sohar refinery, potentially adding an extra 70,000 barrels a day of capacity to the plant and increase product quality. It hopes to start work on the expansion early in 2013 and complete the project by 2015. The expansion will also increase production of liquefied petroleum gas, naphtha, jet fuel, gasoline, diesel and propylene to meet growing local demand.