SHARQ raises US $2.4 bln loan

22-May-06

Eastern Petrochemical Co. (SHARQ) – a SABIC susbsidiary has raised 9.11 billion riyals ($2.43 billion) in financing for its expansion plans. SHARQ's expansion investment plan, estimated at 13.9 billion riyals, aims at boosting annual petrochemical production by 2.8 million metric tons to 4.9 million tons. SHARQ has signed loan agreements with the Japan Bank for International Cooperation, the Saudi Public Investment Fund (PIF) and a consortium of local and international banks which includes Bank of Tokyo Mitsubishi. The production of the new plants is expected to go on stream during H2-2008, with an annual capacity of 1,300000 tpa of Ethylene, 700,000 tpa of Ethylene Glycol, 400,000 tpa of High Density Polyethylene (HDPE) and 400,000 tpa of Linear Low Density Polyethylene (LLDPE). With the addition of new capacity, SHARQ's overall annual capacity is expected to exceed 4,900,000 tpa, more than ten times its initial annual capacity - which was 430,000 tpa. SHARQ will become the world's largest producer of Ethylene Glycol at one site. Stone & Webster will construct a complex producing 1.3 million metric tons of olefins. Samsung will set up a 700,000 metric ton ethylene glycol complex and Linde will build an 800,000 metric ton high and low-density polyethylene plant. SHARQ was set up in 1981 in a 50-50 partnership between SABIC and a group of Japanese partners, which includes the government and Mitsubishi Corp.