Saudi Aramco ask banks for Yanbu financing proposals by 13 March

18 February 2010

State firm plans to fast-track $9.6bn refinery project

The sponsors of the $10bn Yanbu refinery in Saudi Arabia have asked banks to respond to financing proposals for the project by 13 March.

State energy giant Saudi Aramco and the US’ ConocoPhilips, the project sponsors, sent the request for proposals to banks in early February. The March deadline gives banks about a month to get internal approvals for the project.

Bankers in Riyadh say the tight timeframe will be difficult to meet, especially as banks have yet to receive their allocations of how much they will be asked to commit to another Aramco project, the Jubail refinery.

Aramco and France’s Total are still trying to complete the financing packages for the $9.6bn Jubail refinery, after missing original plans to get the financing in place before the end of 2009.

“It will be difficult to get board approval by 13 March, especially as we still don’t have our allocations for Jubail,” says one Riyadh-based banker.

Sources close to the Yanbu refinery scheme say they hope that, because the project is similar to Jubail, banks will be able to get approval for the loans quickly.

Banks were given much longer to work on the Jubail deal, with initial invitations to fund the deal sent to them in June 2009, with a deadline to respond in September 2009.

The US’ Citigroup and the local Riyad Bank are acting as financial advisers on the Yanbu refinery.

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