Duqm Refinery announced its project’s financial close at a gala dinner held at the Intercontinental Hotel, Muscat. Achieving a multi-source project financing for the Duqm Refinery project was a major milestone for the project.

Speaking on the occasion, the President of Kuwait Petroleum International and Chairman of Duqm Refinery, Mr. Nabil Bourisli, said: This achievement reflects the strength and stability of the Omani and Kuwaiti economies. It also reflects the trust and confidence of local, regional and international financial institutions in our economic ties that are deeply rooted in history. He added, “Our Vision is aiming at maximizing the value of our natural resources and driving the two countries toward expanding their economic potential that leads to balanced economic growth.”

Eng. Hilal Al Kharusi, Vice Chairman of Board of Directors of Duqm Refinery commented on the occasion: “this is indeed a very important milestone for the project. It reflects the trust that financial institutions have placed in the project which with no doubt will be one of the key economic drivers for SEZAD. He further added “Setting up Duqm Refinery and Petrochemical Industries Company is an important milestone for petrochemical industries and key to establishing new downstream industries and the creation of job opportunities.”

Eng. Khalid Al Mushaileh, vice president of Kuwait Petroleum International stated “Kuwaiti banks were effectively involved in financing the project achieving 32% of the total loan amount. This is driven by the importance of the project as well as the strategic partnership between the two brotherly countries. He added, “this project is in line with Kuwait Petroleum Corporation 2040 strategy and it is at the same time a great opportunity to involve skilled Kuwaiti workforce to be part of these external investments”.

“The US$ 4.6 Billion multi-sourced financing signed for the Project is not only the largest project financing in the Sultanate of Oman, it also includes the largest sharia compliant facility awarded to a green field project in the country provided by a consortium of Islamic financing institutions” said Mubarak Al Naamany, Chief Financial Officer of Duqm Refinery. He further stated “facilities have been provided by 29 reputed financial institutions from 13 countries and guarantees from 3 major ECAs. He concluded that achieving a Debt to Equity ratio of 55% with uncovered facilities of 70% of total debt, is a testament of confidence placed by international, regional, and local lenders on the Sultanate of Oman, the shareholders, and the project”.

The US$ 4.6 Billion senior debt facilities comprise of seven agreements that includes (i) a US$ 1.43 bn International Commercial Facility, (ii) a US$ 490 million Onshore Commercial Facility, (iii) a US$ 890 million Islamic Facility, (iv) a US$ 700 million UKEF Covered Facility, (v) a US$ 500 million CESCE Covered Facility, (vi) a US$ 600 million K-EXIM Covered and K-EXIM Direct Facilities. Regional banks have played a big role in this deal with funding from Kuwaiti and Omani banks representing 43% of total debt.

National Bank of Kuwait, Kuwait Finance House, Crédit Agricole, Corporate and Investment Bank, KfW IPEX-Bank, Société Générale, Sumitomo Mitsui Banking Corporation, Bank Muscat, Boubyan Bank, Banco Santander, Bank of Tokyo-Mitsubishi UFJ, Ltd, BNP Paribas, Commercial Bank of Kuwait, ICBC, Bank Dhofar, Qatar National Bank, APICORP, Natixis, Standard Chartered Bank, National Bank of Oman, Warba Bank, Korea Development Bank, Credit Suisse, HSBC, Intesa Sanpaolo, UBI Banca, Ahli United Bank Kuwait, Bank Sohar, Ahli Bank Oman are the banks providing facilities to the Duqm Refinery project.

A number of specialist advisers were engaged to support the financing of the Project which include Crédit Agricole Corporate and Investment Bank as Financial Adviser to Duqm Refinery, Allen & Overy LLP as International Legal Counsel to Duqm Refinery, and Latham & Watkins LLP as International Legal Counsel to Lenders.

The Refinery project comprises the development, construction, ownership and operation of the refinery, on-site utilities, infrastructure and storage together with offsite facilities including crude tank storage facilities in Ras Markaz, a crude oil pipeline to the refinery and a product export terminal at the Port of Duqm.

The Refinery is designed to be able to process a range of blended crude oils and configured as a full-conversion hydrocracker / coking facility which will utilize advanced technology, commercially proven at the scale of the Project, supplied by leading technology licensors. Engineering, procurement and construction of the Project is being undertaken under three lump sum turn-key contracts with world class contractors. Formal notice to proceed was issued to the EPC contractors in June 2018.

About Duqm Refinery

Duqm Refinery and Petrochemical Industries Company L.L.C is a Joint Venture (JV) between Oman Oil Company (OOC) and Kuwait Petroleum International (KPI). This strategic partnership between OOC and KPI has been established in the incorporation of Duqm Refinery, based in Al Duqm located in the South East Al Wusta Governorate of the Sultanate of Oman. This gives the project a strategic maritime location and a competitive advantage being in the path of international shipping lines in the Indian Ocean and the Arabian Sea thus easing the process of transport in and out of the region.