Kayan has said that up to the end of March it had spent SR35.4 billion ($9.4 billion) on the construction of the Jubail-based giant complex, which it projects will have an annual production capacity of more than 4 million tons of petrochemical and chemical products.

"It is expected that the gross cost of the project will rise by approximately 24 percent or around SR9 billion ($2.4 billion)," Kayan said in a statement to the Saudi bourse.

"The company is working on necessary arrangements to obtain financing from one or several banks to cover the increase in costs and support from the main shareholders to ensure the completion of all plants in the complex within the fixed deadline," it said.

Kayan Chairman Mutlaq Al-Morished told Reuters the company would organize a loan with help from its shareholders, including SABIC.

"They (the shareholders) can either guarantee the loan for Kayan or they can borrow and pass on the funds to Kayan," he said.

Last Monday, SABIC, which holds a 35 percent stake in Kayan, said it had no plans for a bond issue in the medium term as it had raised SR8.25 billion through two loans in June from state-run National Commercial Bank and Alinma Bank. It made the announcement after delaying a planned dollar bond in May.

"I cannot tell you if some of the funds SABIC obtained through these two loans will go to Kayan. They may do, they may not," Kayan Chairman Morished said.

Kayan also said in its statement it had started trial production on Sunday at its olefins plant, which is part of the Jubail-based complex.

Kayan plans to start full commercial operations at 15 out of 16 units before the end of 2011, Mosaed Al-Ohali, SABIC's executive vice-president for manufacturing said last week.