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Thursday, 26 October 2017

Petronas, Aramco seeking US$8 bil for Malaysian project

Petronas and Saudi Aramco are seeking to raise US$8 billion for a refinery and petrochemical complex via a bridge loan, Project Finance International (PFI) reported on Wednesday.

Refinery and Petrochemical Integrated Development (RAPID), in the southern Malaysian state of Johor, is a US$27 billion project located between the Malacca Strait and the South China Sea, conduits for Middle East oil and gas bound for China, Japan and South Korea.

The Saudi energy giant Aramco agreed in February to buy a US$7 billion stake in RAPID's refinery and cracker project. Aramco agreed this month to take a US$900 million stake in petrochemical projects in the RAPID complex.

PFI, which is owned by Thomson Reuters, reported that more than 10 banks have been invited to submit pricing for the loan facility, which will have a tenor of 1.5 years.

The loan will be sponsored by both firms equally, it said.

Petronas and Aramco did not immediately respond to requests for comment.

The firms had last year sought to raise US$7.2 billion, PFI said. It was not clear why the loan size had been increased.

The RAPID project is a key growth area for Petronas, which is spending much of its capital expenditure on RAPID. The refinery is set to begin operations in 2019, with petrochemical operations to follow 6-12 months afterwards.