Oman refiner set to approach banks for around $3bn
Oman Oil Refineries & Petroleum Industries (Orpic) is set to include the refinancing of around $1bn of debt in its plans to raise $1.9bn to fund the expansion of its Sohar refinery.
The financing is expected to be launched to banks before the end of the year. A market sounding has already been conducted to gauge interest in funding the project and the response is understood to have been strong.
As this will be to fund an expansion of a facility that is already operating, and will continue uninterrupted during the expansion phase, banks are pretty comfortable with this as a deal, says one banker involved in the market sounding.
The response to the market sounding has helped to convince Orpic to also include the refinancing of around $1bn of existing debt in the financing package for the expansion.
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.
The expansion will also increase production of liquefied petroleum gas, naphtha, jet fuel, gasoline, diesel and propylene to meet growing local demand. At the end of September South Koreas Samsung Engineering put in the lowest bid for the engineering, procurement and construction contract for the project.
In June 2012, Orpic appointed the UKs HSBC and National Bank of Oman as financial advisers for the financing.
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