Dubai: A Kuwait Petroleum Corporation-owned firm plans to borrow up to $2.6 billion (Dh9.5 billion) from banks and export credit agencies to build a liquefied natural gas import terminal, banking sources said.

Kuwait Integrated Petroleum Industries Company (KIPIC) will use the money raised to develop the terminal at Kuwait’s Al Zour complex, which also has a refinery and a petrochemical facility.

KPC did not respond to requests for comment on the planned loan for the LNG facility, which will be used to meet domestic demand for gas and is expected to be operating by 2020.

Japan’s Sumitomo Mitsui Banking Corporation (SMBC) is advising KIPIC on the financing, which will also include a loan denominated in Kuwaiti dinars and backed by local banks.

Four banks

Hyundai Engineering, Hyundai Engineering & Construction and Korea Gas Corporation are building the project, the banking sources told Reuters.

The $2.6 billion international debt facility, with a maturity of around 15 years, is coordinated by four banks, and will partly be backed by the Export-Import Bank of Korea (Kexim) and Korea Trade Insurance Corporation (K-Sure).

The local loan will be worth up to $800 million, with Islamic and conventional tranches, one source said. Kuwait Finance House is leading the Islamic tranche and National Bank of Kuwait the conventional one, with Gulf Bank and Commercial Bank of Kuwait also involved.

State-owned KPC plans to invest more than $500 billion by 2040 as it aims to boost its crude oil production capacity to 4.75 million barrels per day by then.

KPC expects to spend $114 billion in capex over the next five years and an additional $394 billion beyond that to 2040, Chief Executive Nizar Al Adsani said this year.