Duqm Refinery to seek $6b bank funding soon

DUBAI: Duqm Refinery and Petrochemical Industries Co will approach banks in about two weeks for the debt financing it needs to back a $6 billion refinery project, banking sources familiar with the matter told Reuters on Monday.

The refinery, run by the joint venture between Oman Oil Company and Kuwait Petroleum International, will be able to process 230,000 barrels of crude per day and occupy 900 hectares in the Duqm industrial zone, which expects investments of up to $15 billion over the next 15 years. This zone is Oman’s biggest single economic project and part of the Sultanate’s efforts to diversify its economy away from oil revenues.

The project financing for the refinery will involve regional and international banks, which will receive an information memorandum in about two weeks, the sources said. Duqm Refinery did not immediately respond to a request for comment.

The financing for the project, on which Credit Agricole is working as financial adviser, is expected to be completed in two to three months.

The financing is expected to include loans backed by export credit agencies from countries including Italy, Spain and South Korea. It will also likely include an Islamic debt tranche.

Duqm Refinery has awarded three main Engineering, Procurement and Construction (EPC) contracts to multinational companies for building the company’s proposed refinery in the Al Wusta region. The first EPC contract for building the refinery’s main processing plants was awarded to a joint venture of Tecnicas Reunidas SA and Daewoo Engineering & Construction Co. Ltd. The second EPC package for building utilities and offset facilities for supporting the operation was awarded to a joint venture of Petrofac International and Samsung Engineering Co. -