Aramco launches second mega financing

Saudi Aramco has launched its second major heavy fuel oil refinery and petrochemical project financing to banks, despite still working on the details of its first scheme. Confidentiality letters to banks have been issued on the financing for the US$12bn Aramco/ConocoPhillips scheme at Yanbu.

However Aramco's first joint venture deal remains in the funding market. The US$12bn Aramco/Total was launched to banks last July with US$8.3bn of financing being sought. It was widely reported in the autumn the deal was oversubscribed by the banks. But while it appears the deal is moving to financial close, decisions on the final allocations between the tranches of the financing and allocations for each bank have yet to be decided.

It is expected the liquid local banks and the international export credit agencies will play an enhanced role in the deal. A local sukuk bond is due to be launched soon. Plans for an international bond issue appear to have been dropped. The Jubail deal will be a mix of international bank finance, export credit agency loans and guarantees, local Saudi bank funding, government linked loans and the local sukuk bond issue. The funding mix for Yanbu will be similar but all the parties concerned will need to see the final details of Jubail. Both projects will be floated on the local stock market at a later date.

Related links:
Saudi Aramco - www.saudiaramco.com
ConocoPhillips - www.conocophillips.com