HSBC, BNP Said Pitching Again for Abu Dhabi Project

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HSBC Holdings Plc, BNP Paribas SA and National Bank of Abu Dhabi PJSC are among banks seeking to advise on raising financing for a $5 billion chemicals plant in Abu Dhabi, three people with knowledge of the matter said.

Abu Dhabi National Chemicals Co. asked banks to bid for the role to advise on the first phase of the project last month, the people said, asking not to be identified as the information is private. It’s the third time since the company’s formation in 2008 that it has sought to hire a financial adviser for the project, without appointing anyone, according to the people.

Abu Dhabi is seeking to build the company, known as Chemaweyaat, into one of the world’s top 10 chemical producers as part of plans by the emirate to diversify its economy and create jobs. Chemaweyaat had aimed to begin production at its first plant in 2015 and shifted its location from a port near the capital to an oil refinery at the Ruwais industrial area.

Chemaweyaat and NBAD didn’t respond to requests for comment. A spokesman for HSBC declined to comment, and a spokeswoman for BNP Paribas also declined to comment.

The chemicals company is jointly owned by International Petroleum Investment Co., Abu Dhabi Investment Council and Abu Dhabi National Oil Co.

Chemical Ambitions

Chemaweyaat signed a joint venture agreement with Thailand’s Indorama Ventures Plc. in 2013 to develop the first phase of its chemicals complex. The two companies said they planned to develop an aromatics plant that can produce about 1.4 million tonnes a year of paraxylene and about 500,000 tonnes a year of benzene.

Middle Eastern countries have expanded petrochemicals production to take advantage of access to cheaper oil and natural gas resources than rivals. Saudi Arabian Oil Co. and the U.S.’s Dow Chemical Co. have partnered in the development of a $20 billion chemicals project. Based in Saudi Arabia’s Eastern Province, the plant, known as Sadara Chemicals Co., expects to start production this year.

HSBC and BNP Paribas have both been pitching advise Chemaweyaat on raising funding since 2008. If the project goes ahead this time it will be one of the largest petrochemicals projects planned in the region after Qatar Petroleum and Royal Dutch Shell Plc ended plans in February to build a $6.5 billion plant, saying it was “commercially unfeasible” in the current energy market.

Brent crude for June settlement, which expires Thursday, increased 38 cents, or 0.6 percent, to $67.24 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a premium of $5.98 to West Texas Intermediate.