Saudi Aramco, Dow Seek to Be ‘Overfunded’ for Sadara
Saudi Arabian Oil Co. and Dow Chemical Co. (DOW) are seeking funding offers above the $12 billion to $13 billion needed for their Sadara Chemical Co. petrochemicals joint venture to try and lock in the most competitive rates.
“Our strategy is to be overfunded and then scale back to achieve the best terms and conditions,” Luciano Poli, chief financial officer of the joint venture, said yesterday in an interview in Dubai. “We’re at a very important stage where all the different tranches are being finalized and negotiated. We’re well on schedule and will close the financing soon.”
Sadara, a $20 billion petrochemicals complex being constructed in Saudi Arabia’s Eastern Province, is being funded 65 percent with debt and the remainder with equity. The U.S. Export-Import Bank said Sept. 27 it approved a $5 billion loan for the complex.
The first of the plant’s 26 units will begin operating in 2015, Poli said. Starting up all the units will take 18 months, he said.
Saudi Aramco owns 65 percent of the Sadara venture, with Dow holding the remainder. Aramco plans to sell part of its stake to the public, after which its share will equal Dow’s.