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Dentons advises Sumitomo Chemical on the US$8 billion Petro Rabigh and petrochemical complex expansion

24 Mar 2015

Dentons advised Sumitomo Chemical on its participation in the expansion of the refining and petrochemical complex owned and operated by Rabigh Refining & Petrochemical Company (Petro Rabigh). Sumitomo Chemical is a founding shareholder of, Petro Rabigh together with Saudi Aramco. The expansion project reached financial close on 16 March 2015 and the total project cost is estimated at US$8 billion. Sumitomo Chemical's participation will initially take the form of a US$1 billion equity bridge loan guaranteed by Sumitomo Chemical, alongside a similar loan guaranteed by Saudi Aramco.

Petro Rabigh will now assume ownership of Rabigh Phase II Project from its founding shareholders. Rabigh Phase II involves a major expansion of the existing facilities of Petro Rabigh with the production of high-value products from petrochemical feedstock provided by the existing facilities and introducing new specialty petrochemical products to Saudi Arabia. The expansion will also include an independent water, steam and power project, to be developed by Rabigh Arabian Water and Electricity Company (RAWEC). As part of the commercial arrangements between Petro Rabigh and RAWEC, Petro Rabigh will utilize a portion of the Rabigh Phase II Project financing to provide an on-loan to RAWEC in an amount up to US$878 million. The senior debt financing is approximately US$5.17 billion in size, and includes facilities from Japan Bank for International Cooperation (JBIC), Public Investment Fund (PIF), and a group of 19 financial institutions participating in Islamic and commercial bank tranches. Sumitomo Mitsui Banking Corporation and the Saudi British Bank have acted as financial advisors for the financing of the project.

Udayan Mukherjee, Project Finance Partner, commented, "This is a landmark project and we are delighted to see it achieve financial close. The size and number of different financing tranches, including funding from governmental agencies, 19 regional and international banks, and different types of Islamic financing structures, demonstrates the strong appetite in the market for projects of this nature."

The Dentons team was led by Udayan Mukherjee working with partner Neil Cuthbert and senior associate Michelle Teng.

Matter Type
Banking & Finance - Capital Markets: Structured/Project Finance
Industry
Healthcare, Life Sciences & Chemicals
News Category
Banking & Finance
Energy, Utilities & Natural Resources