The local Engro Paktank says it has completed financing details for its chemicals handling facility to be built at Port Qasim. Agreements concerning foreign currency debt have already been signed and the local Muslim Commercial Bank (MCB), lead arranger of a local currency loan, says it expects to finalise an agreement within one month. The facility is being built on a build-operate-transfer (BOT) basis under a 30-year concession, signed with the Port Qasim Authority in 1996.
The total cost of the project is $65 million, of which $26 million will come from equity participation and $39 million will be debt finance. Engro Paktank is a joint venture between Engro Chemicals Pakistan and the Netherlands’ Royal Pakhoed, each of which will provide $13 million in equity. The International Finance Corporation has agreed to provide a loan of $17 million, including $12 million for its own account and a syndicated loan of $5 million. The Commonwealth Development Corporation is to provide a loan of about $7 million.
Local currency costs, amounting to Rs 600 million ($15 million), are to be raised by a group of banks led by MCB. MCB says that the syndication is likely to include Faysal Bank and Al-Faysal Investment Bank, both local, and the local operations of Standard Chartered Bank and Citibank, both of the US, the Netherlands’ ABN AMRO, France’s Societe Generale and ANZ Grindlays Bank. Exposure is expected to be divided approximately equally between the participants.
Work on the project is scheduled for completion in September. Offshore work, including the construction of a jetty and a 1,100-metre trestle connecting the jetty to storage tanks, is being carried out by China Harbour Engineering Company and mechanical work on tanks and piping is being done by Germany’s Noell.
The terminal will be used by ICI Pakistan to import acetic acid and paraxylene as feedstock for its purified terepthalic acid (PTA) plant, currently under construction. Engro Paktank says it is also holding negotiations with Engro Chemicals to use the terminal to import raw materials for its planned polyvinyl chloride (PVC) plant. Engro Paktank says it is currently considering diversifying the range of chemicals which the terminal can handle. Later expansion could eventually include the construction of a second jetty, the company says.