Salalah LPG loan goes to market

28 September 2016

Banks receive RfPs for $750m loan

International banks have received requests for proposals for a $750m loan for Salalah liquefied petroleum gas (LPG) plant, according to banking sources.

Pricing for the 15-year loan is expected to be between 300 and 400 basis points over London interbank rates (Libor).

A tap of an Omani sovereign bond secured pricing of 315 basis points over Treasuries this week, according to Reuters.

MEED reported in July the Oman Gas Company (OGC) had appointed local Bank Muscat and Japan’s Mitsubishi UFJ (MUFG) as mandated lead arrangers.

The LPG plant is expected to produce 153,000 tonnes per year of propane, 115,000 tonnes of butane and 59,000 tonnes of condensate, extracted from LPG from the nearby Salalah gas field.

US-based CB&I and the UK’s Petrofac are the bidders for the engineering, procurement and construction (EPC) contract, after carrying out the front-end engineering and design (feed) study.

OGC is a subsidiary of state-owned Oman Oil Company (OOC).

Another subsidiary of OOC, Salalah Methanol Company, is expected to borrow around $300m for its 1000 tonne a day ammonia plant.

The UK’s Standard Chartered and local Bank Dhofar have been mandated to arrange the loan.

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