Qatar Vinyl Company (QVC) is expected to appoint a financial adviser for a $200m expansion project by the end of January, according to sources close to the development.

Several banks pitched for the mandate in late December 2011 and QVC has now shortlisted two or three.

QVC is planning to expand its plant at Mesaieed, south of Doha, which currently produces a mixture of petrochemicals including ethylene dichloride (EDC) and vinyl chloride monomer, which is used to produce polyvinyl chloride (PVC).

The last time QVC raised cash from banks was in 2003, when it refinanced a $475m project finance facility that was originally put in place in 1999 and used to build the current QVC plant at Mesaieed (MEED 8:01:99).

The 2003 refinancing will mature in late 2013. QVC is currently paying 130 basis points above the London interbank offered rate for the facility (MEED 26:9:03). Bankers says any new financing will rely more heavily on local banks than the previous facility, which featured only two local banks in a group of 11 lenders.

“There is so much liquidity in the local banks that a new deal probably won’t feature much international participation,” says one banker pitching for the QVC mandate.

In 2008, Qatar Petroleum bought a further 29.7 per cent stake in the company, giving the state oil company majority ownership of the petrochemicals firm at 55.2 per cent.