Saudi Aramco, Malaysia’s Petronas tap banks for jumbo financing — sources

DUBAI, HONG KONG

Saudi Aramco and Malaysia’s Petronas have approached banks to replace a short-term $8 billion loan raised earlier this year for a joint venture with long-term financing of approximately the same size, banking sources familiar with the matter said. The two state energy companies borrowed $8 billion from a large consortium of international banks in March for a refinery and petrochemical joint venture in the southern Malaysian state of Johor.

The project, Refinery and Petrochemical Integrated Development (RAPID), is a $27 billion complex located between the Malacca Strait and the South China Sea, conduits for Middle East oil and gas bound for China, Japan and South Korea.

The two firms issued a request for proposals to banks last month and are now in preliminary discussions for a self-arranged loan with a maturity of more than 10 years which would replace the existing bridge borrowing, said the sources.