The Sharjah-based Crescent Petroleum Company says it hopes to sign an implementation agreement with the government in July for its hydrocracker plant.

The plant is to be built by National Crescent Petroleum, a joint venture between subsidiary Crescent Refining & Marketing Company and the local State Petroleum Refining & Petrochemical Corporation (PERAC) in Karachi. Crescent & PERAC will design, build, finance and own the project.

The signing of the implementation agreement is pending a report on the benefits of the refining investment. Arthur Andersen of the UK was appointed by the government to carry out the report. Crescent says that it hopes to reach financial close four-six months after the signing of the agreement.

The total costs of the project are $650 million. About 70 per cent will be raised by borrowing, the remainder will be raised through equity. Debt will comprise World Bank funding and commercial syndicated loans to be arranged by Credit Lyonnais and Italy's Instituto Bancano San Paulo Di Torino. The loans will be supported by export credit agencies SACE of Italy, Coface of France and the UK's Export Credits Guarantee Department. Part of the equity will be taken by Crescent and PERAC. Equity adviser, Deutsche Morgan Grenfell is to arrange an offering of global depositary receipts or a private placement equivalent to at least 30 per cent of the equity. Bank of Tokyo is the financial adviser.

The main construction contract has been awarded to France's Technip, and Italy's Agip Petroli will be the operation and maintenance contractor. Capacity is expected to be 35,000 barrels a day.