Saudi Arabia’s National Petrochemical Industrialisation Company (Tasnee) has started talks with banks to finance its $1.5-2bn acrylic acid plant at Jubail.

The company’s financial advisers on the project, the UK’s HSBC, have already started a market sounding with local banks to gauge appetite for the transaction. They are expected to start approaching lenders for financial commitments in the first half of 2011.

The breakdown of the financing is not yet confirmed, but sources close to the project say both international and local banks will be approached to get a mix of both dollar and Saudi riyal loans. Talks are also under way with export credit agencies Export-Import Bank of Korea (Kexim) and Germany’s Hermes.

Germany’s Linde and South Korea’s Samsung Engineering have already been awarded the main engineering procurement and construction (EPC) contract on the plant, and discussions are under way to award two further contracts.

The project is a joint venture of Tasnee and Sahara Petrochemicals, with 75 per cent of the company, and the US’ Rohm & Haas holding the other 25 per cent. Production at the plant, which is expected to be about 230,000 tonnes a year of acrylic acid and derivatives, is due to start in the first quarter of 2013.

HSBC has a number of other mandates for petrochemicals projects in Saudi Arabia. It is planning to launch the $700-800m financing for a joint venture between Saudi Arabian Mining Company (Maaden) and Sahara Petrochemicals in the first quarter of 2011. It is also financial adviser to Saudi International Petrochemicals Company (Sipchem) and South Korea’s Hanwha Chemicals Corporation on their polymers project at Jubail, and is co-adviser with Sumitomo Mitsui Banking Corporation on the development of PetroRabigh Two.