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Buyer’s Credit for Jubail Refinery Project in Saudi Arabia
Supporting Japanese Firms’ Participation in Mega Oil Refinery Project in Oil-Producing Country

  • Region: The Middle East
  • Machinery and Equipment
  • Export Loans
  • Project Finance
NR/2010-18
June 25, 2010
  1. The Japan Bank for International Cooperation (JBIC; President & CEO: Hiroshi Watanabe)*1  signed on June 24 a buyer's credit*2  agreement totaling up to 400 million U.S. dollars with SAUDI ARAMCO TOTAL Refining and Petrochemical Company (SATORP), a limited liability company incorporated in the Kingdom of Saudi Arabia. Provided through project financing,*3  this loan was co-financed with commercial banks comprising Mizuho Corporate Bank (facility agent), the Bank of Tokyo-Mitsubishi UFJ and Sumitomo Mitsui Banking Corporation, along with the Nippon Export and Investment Insurance (NEXI) providing buyer's credit insurance for their co-financing portion. Besides this loan, the project has also been funded by the Export-Import Bank of Korea (KEXIM), the Public Investment Fund, Saudi Arabia's sovereign investment fund, and certain commercial banks with guarantees or insurance coverage from Compagnie Française d'Assurance pour le Commerce Extérieur (COFACE), KEXIM, the Korea Export Insurance Corporation (KEIC) and other export credit agencies, together with uncovered commercial bank and Islamic finance facilities both in U.S. dollars and the local currency.
     
  2. In this project, SATORP, in which Saudi Arabian Oil Company (Saudi Aramco) and Total S.A. (in France) have equity stakes, will build and operate a world-class grassroots refinery with a throughput capacity of 400,000 barrels of crude oil per day in the Jubail Industrial City on the eastern coast of Saudi Arabia. The refinery will process Arabian Heavy crude oil primarily into high-valued refined products such as diesel, jet fuels, gasoline, and petrochemical products. These products will be sold mainly in Europe, the United States and some Asian countries. JBIC finances SATORP for the EPC contract of a delayed coker for which a consortium participated in by Chiyoda Corporation has won the order, and for various equipment for each of which IHI Corporation, Elliott Ebara Turbomachinery Corporation, Kobe Steel, Ltd., and Hitachi Zosen Corporation won the order.
     
  3. This is a very significant project for Saudi Arabia's industrial policy, which aims to produce and export large volumes of high value-added oil products, since the country is moving to transform its industrial structure that is heavily dependent on crude oil exports. JBIC will support the export of Japanese plant facilities and machinery to this project, thereby contributing to the country's economic development.
     
  4. As an official financial institution with abundant experience in project financing, JBIC has participated in this project from its early stages to help structure effective financing in collaboration with both sponsors and other official financial institutions. To create export opportunities for Japanese industries in Middle Eastern and African countries, JBIC will continue its support for Japanese overseas business activities by drawing on its expertise, risk-assuming function, and wide range of financial instruments.
Note
  1. *1 JBIC is the international wing of the Japan Finance Corporation (JFC; Governor: Shosaku Yasui).
  2. *2 A buyer's credit is a loan JBIC directly extends to a foreign importer (buyer) to finance its import of machinery and equipment from a Japanese firm.
  3. *3 Project financing is a financing method in which repayments for a loan provided for the project are made exclusively from cash flows generated by the project, and the security for the loan is limited to project assets.
  4.  

 

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