Saudi Aramco Mobil Refinery Company (Samref) has approached banks as part of the firm’s plans to raise up to $2bn to fund an expansion and modification of its refinery in Yanbu.

The company, a joint venture between Saudi Aramco and the US’ ExxonMobil, held meetings with potential financial advisers in mid-March. It plans to appoint a bank to advise on the fundraising by early April. Financiers attending the mid-March meetings included several international and local banks.

The Samref expansion, known as the Clean Fuels Project, will involve modifications to the existing refinery that will lower the sulphur content of its products in order to comply with new environmental regulations. The new rules make it compulsory for refineries to reduce the sulphur content of the gasoline they produce if they want to export their products to the US.

Bankers involved in meetings with Samref say the new project will be funded entirely through debt, which is expected to be largely raised from local banks. “Samref has the ability to pay for this itself, so with the liquidity in the Saudi banks at the moment they could easily raise the money they need from just a few of them,” says one banker at an international lender who pitched for the deal.

The modifications to the Yanbu facility should be completed by the end of 2013. Work on the scheme has been under way for several years and Australia’s WorleyParsons was appointed to do the front-end engineering and design (Feed) in January 2009.

Once a financial adviser is appointed Samref is expected to start approaching lenders to put the funding in place before the end of the year. “The funding should be out to banks by the end of the year and Samref want to get it arranged pretty quickly,” says a banker in Riyadh.

Samref did not respond to requests for comment.