Times of Oman
Orpic completes $3.8 billion funding for Liwa Plastics Industries
March 12, 2016 | 2:14 PM
by Times News Service
Orpic had announced the successful award of engineering, procurement and construction contracts to deliver its landmark Liwa Plastics Industries Project. Photo - File
 
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Muscat: State-owned Oman Oil Refineries and Petroleum Industries Company (Orpic) said that the company has closed its Liwa Plastic Industries Complex’s $3.8 billion project financing facility for its $6.5 billion project.

This follows Orpic’s December 2015 announcement of the successful award of engineering, procurement and construction (EPC) contracts to deliver its landmark Liwa Plastics Industries Project (LPIC), according to a press statement.

Commenting on the significance of LPIC’s project financing, Orpic chief executive officer Musab Al Mahruqi said, “Orpic’s LPIC project is part of our long-term growth strategy to firmly enter into the petrochemical market. This financing facility, which is the largest ever project financing transaction to be achieved in the Sultanate, is an indication of the level of confidence and support Orpic has from key institutions and stakeholders.”

LPIC financing has been supported by export credit agencies representing the governments of Italy (SACE Cdp), the Netherlands (Atradius Dutch State Business), Korea (K-Exim and K-Sure), the United Kingdom (UKEF) and Germany (Euler Hermes), along with 19 international, regional and local commercial lenders.



Mandated lead arrangers and arrangers of the LPIC project financing were Arab Banking Corporation, BankDhofar, Bank Muscat, Bank of Tokyo-Mitsubishi, BNP Paribas Fortis, Cassadepositi e prestitis, CréditIndustriel et Commercial, Crédit Agricole Corporate and Investment Bank, Export Development Canada, HSBC Bank, ING Bank (a branch of ING-DIBA), JPMorgan Chase Bank, KfW IPEX-Bank, Korea Development Bank, NATIXIS, Saudi National Commercial Bank, Société Générale, Sumitomo Mitsui Banking Corporation and UniCredit.

“LPIC represents a robust and resilient project to lenders – satisfying the highest international environment and social requirements, and provides appropriate frameworks to address each of the technical, commercial and legal challenges which customarily arise on major world-scale petrochemical projects. The company has been able to successfully secure financing amid challenging global financial and economic conditions and with limited government guarantees which reflects the trust that international financing institutions have placed on the project and the investment climate within the Sultanate,” added Al Mahruqi.

Orpic completed the financing of LPIC on a highly accelerated timetable, which was designed to coincide with the scheduled commencement of works on the project construction packages. Commissioning for the LPIC Project is scheduled to be completed in 2020.

Upon commissioning in 2020, Orpic’s Liwa Plastics Industries Complex Project will transform Orpic’s product mix and business model, double company profit, create new business opportunities, generate significant employment opportunities and support the development of a downstream plastics industry in Oman.

With the global market for plastics growing, the $6.5 billion Liwa Plastics Industries Complex will firmly establish Orpic as a recognised player in the international petrochemicals marketplace – enabling Oman, for the first time, to produce polyethylene, the form of plastic that rates highest in terms of global demand and increased the current production of polypropylene.

Following commissioning, plastics production is forecast to increase by more than 1 million tons, giving Orpic a total of 1.4 million tons of polyethylene and polypropylene production.

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