‘ARAMCO, PETRONAS CLOSE TO CLINCHING US$8B LOAN DEAL’

KUALA LUMPUR: Petroliam Nasional Bhd (Petronas) and Saudi Arabian Oil Co (Aramco) are close to raising an US$8 billion (RM31.28 billion) loan.

This was to partly finance the construction of a planned refinery and a petrochemical complex in the Southeast Asian nation, said people familiar with the matter.

The Middle Eastern oil giant and Petronas could sign the loan agreement as early as next month, said the people.

BNP Paribas SA, HSBC Holdings Plc and Bank of Tokyo-Mitsubishi UFJ Ltd are among lenders that have agreed to provide financing, said the people.

The complex is part of a US$27 billion project known as Refinery and Petrochemicals Integrated Development (Rapid) in Johor, which is due to come on stream next year.

Aramco agreed to invest US$7 billion for half of the oil refinery and petrochemical plant last February as it sought to defend its status as the world’s biggest exporter and fended off rivals in Asia, the biggest market for its crude.

The Rapid project, which was announced in 2011, borders the traditional Asian oil trading and refining centre of Singapore.

It will include a 300,000 barrel-a-day refinery, which can produce fuels that meet Euro 5 emissions standards, as well as provide feedstock for a connected petrochemical plant, according to Petronas.

For Aramco, the deal is part of its long-standing strategy of investing in refining to help lock in demand for its crude.

The Saudi firm is battling for global market share amid competition from the United States shale oil producers, Russia and even fellow members of the Organisation of Petroleum Exporting Countries as it prepares for what could be one of the world’s largest initial public offerings.