Financing talks for the development of the $10bn Yanbu refinery scheme have stalled following the walkout of the US’ ConocoPhillips from the project, while remaining sponsor Saudi Aramco holds crisis talks to decide on how to proceed with the scheme.

“Aramco is considering at the highest level how to proceed with the Yanbu project. Until then the financing cannot progress any further,” says a source close to the Saudi oil company.

Bank commitments for the Yanbu scheme have already been received by financial advisers Riyad Bank and the US’ Citigroup, with the deal already oversubscribed. However, some of these commitments are now in doubt. “Those banks which came into this deal on the back of a relationship with ConocoPhillips will be out of the deal now,” says one banker involved in the Yanbu financing.

The news has also cast doubt on the participation of export credit agency, the Export-Import Bank of the US (US Exim), which was expected to be providing a direct loan of more than $600m. Unless another US-based partner is found to replace ConocoPhillips, US Exim may not be able to lend on the project.

Before this set-back, some bankers in Saudi Arabia had suggested the Yanbu financing could be completed before another Aramco scheme, the Jubail refinery. That optimism now seems fanciful.