Saudi Basic Industries Company (Sabic) has started to approach banks to finance the National Methanol Company (Ibn Sina) petrochemicals expansion project in Jubail.

The state-owned petrochemicals giant began approaching lenders to provide about $400m on 16 September. The deal is expected to be funded in Saudi riyals by local banks, and proceeds will be used to fund the 50,000 tonne-a-year (t/y) polyacetal plant for use in the car industry.

Banks say the small size of the financing package, coupled with having Sabic behind the project, mean there should be some strong responses from lenders. “This deal should not be an issue for the Saudi banks to do, the only issue will be what Sabic’s pricing expectations are.”

Ibn Sina is a joint venture of Sabic, which holds 50 per cent of the company, and CTE, which is owned by Elwood Insurance and Texas Eastern Arabian. The plant was originally built in 1984.

Five companies have bid for the engineering, procurement and construction (EPC) contract on the Ibn Sina expansion. The polyacetal plant was originally planned to be operational this year, but is now expected to be operational in 2015.

The complex currently produces 950,000 t/y of methanol and 750,000 t/y of methyl tertiary butyl ether (MTBE).