MOSCOW (MRC) -- Malaysia’s Refinery and Petrochemical Integrated Development (RAPID) project, a venture between Petronas and Saudi Aramco, is seeking commitments from banks for a USD9.7 billion, 15-year loan, sources told LPC, a fixed income news service, reported Reuters.
Banks have already responded to an initial request for proposals and are required to respond by the end of this week with revised proposals, mainly around pricing.
The new borrowing comprises three tranches: an export credit agency facility, an ECA-covered portion and an uncovered commercial piece of around USD3.08 billion. ECAs from Japan, South Korean and Europe are expected to be involved.
The uncovered commercial tranche will carry different interest margins tied to completion of the project. The pre-completion period is expected to be two years, during which Petronas and Aramco will provide guarantees, and the all-in pricing is likely to be around 80 basis points over the London Interbank Offered Rate, LPC reported.
After the project is completed, guarantees fall away and the pricing will increase to around 150 bps.
An USD8 billion, 364-day bridge loan which RAPID completed in March paid similar all-in pricing based on an initial razor-thin interest margin of 40 bps over Libor and fees. The bridge attracted 19 banks.
Refinery operations are set to begin in 2019, with petrochemical operations to follow six to 12 months later.
Petronas and Aramco have equal stakes in the half-built, USD27 billion complex located between the Malacca Strait and the South China Sea. Aramco has agreed to supply at least 50 percent of the crude oil for the project.
As MRC informed before, a supertanker carrying the first crude oil cargo for a refinery joint-venture project between Petronas and Saudi Aramco is expected to reach Malaysia by end-September.
Petronas, short for Petroliam Nasional Berhad, is a Malaysian oil and gas company wholly owned by the Government of Malaysia. The Group is engaged in a wide spectrum of petroleum activities, including upstream exploration and production of oil and gas to downstream oil refining; marketing and distribution of petroleum products; trading; gas processing and liquefaction; gas transmission pipeline network operations; marketing of liquefied natural gas; petrochemical manufacturing and marketing; shipping; automotive engineering; and property investment.
Saudi Aramco is an integrated oil and chemicals company, a global leader in hydrocarbon production, refining processes and distribution, as well as one of the largest global oil exporters. It manages proven reserves of crude oil and condensate estimated at 261.1bn barrels, and produces 9.54 million bbl daily. Headquartered in Dhahran, Saudi Arabia, the company employs over 61,000 staff in 77 countries.
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