PetroRabigh signs SR19.4bn loan for expansion

Updated 17 March 2015
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PetroRabigh signs SR19.4bn loan for expansion

DUBAI: Saudi Arabia's PetroRabigh, a joint venture between Saudi Aramco and Sumitomo Chemical, has signed loans worth SR19.4 billion ($5.2 billion) for the expansion of its petrochemicals complex, it said on Tuesday.
The move reflects the Kingdom's determination to diversify its economy even after lower oil prices caused some regional petrochemical and energy projects to stall.
News of the financing initially sent PetroRabigh shares soaring 5.9 percent to SR24, before they fell back to trade 3.9 percent up at 1030 GMT.
The scheme's cost is now estimated at SR30 billion, it said, a further revision to the price, which was scaled up to SR32 billion last May from the original SR26.3 billion.
It gave no reason for the latest revision.
The total loan, maturing in June 2031, includes SR7.5 billion from the Japan Bank for International Cooperation and SR4.9 billion from the state-owned Public Investment Fund, a statement from the firm said.
The rest is from a consortium of local and international banks, who would respectively put in 3.5 billion riyals. Among the funders were Bank of Tokyo-Mitsubishi, Sumitomo Mitsui Banking Corporation, Saudi British Bank and Al-Rajhi Bank.
The statement added a SR7.5 billion equity bridge loan had also been agreed, which will mature in 2019 and be guaranteed by Aramco and Sumitomo Chemical. Usually, such a facility is to cover initial construction and start-up costs.
Both parent companies will put in 100 billion yen ($824.7 million) each, Sumitomo President Masakazu Tokura said in November 2013.
The project, situated on the Kingdom's Red Sea coast, has been uncertain since it was first mooted in 2009, despite Aramco and Sumitomo giving a final go-ahead in 2012.
The completion of the financing is also notable as falling oil prices have seen some Gulf projects shelved, including the $6.4 billion Al-Karaana petrochemical project in Qatar and
Aramco's $2 billion clean fuels plant at its largest oil refinery in Ras Tanura.
The expanded facility was expected to start production in the first half of 2016, it said. It will increase output and introduce higher-margin products.
Phase II will be able to produce five million tons of petrochemicals and 15 million tons of petroleum products annually.
PetroRabigh's existing plant can produce an annual 18 million tons of refined products and 2.4 million tons of petrochemical products.


US won’t send officials to China’s Belt and Road forum

Updated 3 min 52 sec ago
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US won’t send officials to China’s Belt and Road forum

  • Leaders from 37 countries and officials from dozens more are expected to attend the Belt and Road Forum from Thursday to Saturday
  • Chinese Foreign Minister Wang Yi told journalists at a briefing last week that American diplomats, state government representatives and members of the business community will be attending the forum

BEIJING: Washington will not send officials to a Beijing summit on Chinese President Xi Jinping’s signature global infrastructure project, the US embassy said Wednesday amid a raft of disputes between the two powers.
Leaders from 37 countries and officials from dozens more are expected to attend the Belt and Road Forum from Thursday to Saturday, but Washington has dismissed the initiative as a “vanity project.”
“The United States has no plans to send officials from Washington to the Belt and Road Forum,” a US embassy spokesperson told AFP in an email.
“We call upon all countries to ensure that their economic diplomacy initiatives adhere to internationally-accepted norms and standards, promote sustainable, inclusive development, and advance good governance and strong economic institutions,” the spokesperson said.
Chinese Foreign Minister Wang Yi told journalists at a briefing last week that American diplomats, state government representatives and members of the business community will be attending the forum.
At the first Belt and Road summit in 2017, the US was represented by White House adviser Matt Pottinger.
Since then, more countries have signed up to Belt and Road, most notably Italy, which became the first G7 nation to join the global scheme that aims to link Asia to Europe and Africa through massive investments in maritime, road and rail projects.