Sipchem wants acetic advice

06 December 2004
Saudi International Petrochemical Company (Sipchem)is assessing bids from banks for the financial advisory position on its proposed phase 2 expansion. 'There is some momentum on this now and we are expecting a mandate award before the end of the year,' says one of the interested banks.

The advisory mandate is understood to cover Sipchem's proposed carbon monoxide unit, the 417,000-tonne-a-year (t/y) acetic acid plant, and the 300,000-t/y vinyl acetate monomer (VAM) plant which it will feed.

It is expected that Sipchem will form joint ventures with third parties - possibly including potential offtakers - for each of the separate units.

The 1 million-t/y methanol plant also contained in phase 2 is not included, as it is expected to be developed by International Methanol Company, the Sipchem subsidiary working in partnership with Japan's Chiyoda Corporationon the methanol unit in Sipchem's phase I development.

'We are looking at total project costs of $600 million-800 million,' says the banker. 'The likelihood is that it will load up on SIDF [Saudi Industrial Development Fund] and PIF [Public Investment Fund] finance, add on some ECAs [export credit agencies] and then take the remainder to the commercial bank market.'

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