Oman Oil Refineries & Petroleum Industries (Orpic) has completed a market sounding exercise and is set to formerly approach banks to fund its $1.5bn expansion plan by the end of August.

The company is set to make a decision about whether to include in the new fundraising an additional refinancing of around $1bn of existing debt in the next few weeks, according to sources close to the project.

“This is not a typical greenfield project finance deal as there are the cashflows from the existing refinery, which will continue operating, while the expansion is under way,” says one source with knowledge of the project. “So the deal will really be a hybrid between a project finance and a corporate loan.”

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.

Orpic hopes to complete the deal before the end of the year. In June 2012, Orpic appointed the UK’s HSBC and National Bank of Oman as financial advisersfor the financing.