Saudi Arabia’s Rabigh refining/petrochemicals project is seeking funding and issued a request for proposal (RFP) and public information notice (PIN) to banks last week, MEES learns. The funding will include a commercial loan of $1.54bn, an Islamic loan of $500mn, $2.5bn from the Japanese Bank for International Cooperation (JBIC) in the form of an overseas investment loan (OIL) and $1bn from the Saudi Public Investment Fund (PIF), making total debt of $5.54bn. The rest of the funding will come from shareholders ($3.021bn) and pre-completion revenues ($650.9mn). Sumitomo Mitsui is Rabigh’s financial advisor.
The total project cost is put at $8.52bn which includes $6.7bn in capital expenditure, the acquisition of the existing refinery for $230mn, upfront fees of $30.6mn, $840.9mn for the independent water, steam and power (IWSP) project and $745.8mn for fees and interest. The RFP confirms that Rabigh will cost more to implement than originally planned. Earlier this year MEES had indicated that Rabigh’s costs had climbed amid changes in the scope of the project and soaring engineering, procurement and construction (EPC) prices (MEES, 4 July). Rabigh’s financial close is anticipated in December and banks must respond to the RFP by 20 October. The project is expected to attract considerable interest from Saudi banks. International banks are also expected to be keen, although some “may have issues with Saudi exposure,” said one banker.
Saudi Aramco and Sumitomo Chemical Company signed an agreement on 1 August to develop the Rabigh project following successful completion of the front-end engineering design (FEED). When completed in late 2008 the Rabigh project, which will be one of the largest to be built at one time, will produce 2.4mn tons of petrochemical solids and liquids, large volumes of gasoline and other refined products (MEES, 8 August). A Marubeni-led consortium on 7 August signed an agreement with Saudi Aramco to build, own and operate for 25 years utilities to produce desalinated water, power and steam for the Rabigh refinery complex (MEES, 15 August).
