05 June 2013 13:13 [Source: ICIS news]
SINGAPORE (ICIS)--Vietnam’s proposed refinery and petrochemical project at Nghi Son has secured a total of $5bn of financing from financial institutions, said two of the project's joint venture partners on Wednesday.
Construction of the project, under the joint venture company Nghi Son Refinery & Petrochemical (NSRP), will start in July and is expected to be completed in 2016, with commercial operations expected in 2017, joint venture partners Japan’s Mitsui Chemicals and Idemitsu Kosan said in separate statements.
Mitsui Chemicals, Idemitsu Kosan and fellow partners Kuwait Petroleum International and Petro Vietnam have made a final decision to pursue the $9bn project in Vietnam’s Thanh Hoa province, paving the way for the conclusion of the financing agreement.
The project is expected to have a refining capacity of 200,000 bbl/day, a paraxylene (PX) capacity of 700,000 tonnes/year, and a polypropylene (PP) capacity of 370,000 tonnes/year, according to Mitsui Chemicals.
Under the $5bn financing deal, Japan Bank for International Cooperation (JBIC) and the Export-Import Bank of Korea will provide about $2.3bn of the total, while $2.7bn will be in the form of loans from domestic and overseas private banks, which are insured or guaranteed by Nippon Export and Investment Insurance (NEXI) and foreign export credit agencies.
“It is noted that the project has received a $1.65bn loan from JBIC and a $1.3bn overseas investment insurance coverage by NEXI,” Mitsui Chemicals said.
Japan’s Idemitsu Kosan and Kuwait Petroleum International have an equal stake of 35.1% each in NSRP, while Petro Vietnam has a 25.1% interest, with the remaining 4.7% stake held by Mitsui Chemicals.
“As $5bn will be raised through project financing, the remaining $4bn will be directly borne by sponsors. Of this amount, Idemitsu will provide investments/loans of approximately $1.4bn, corresponding to its interest percentage in shares,” Idemitsui Kosan said in a separate statement.
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