Kayan denies SIDF withdrawal

The Saudi Kayan Petrochemical Company has denied a report that Saudi Industrial Development Fund (SIDF) could pull $530m investment in $10bn petrochemicals scheme located in Al Jubail Industrial City on the eastern coast of Saudi Arabia.

The company said that it has received a letter from Saudi Industrial Development Fund on 4th Feb, and assured its commitment to Kayan projects. “All of the company’s loan agreements were signed and discussions are underway with the fund to start issuing the loans,” The company added in a statement published to the Saudi Stock market (Tadawul).

The deal was signed in July 2008 with a group of 15 banks, as well as the SIDF and the government-backed Public Investment Fund (PIF). Several export credit agencies including Korea Export Insurance Corporation, the Export Import Bank of Korea, Italy's Gruppo Sace and the UK's Export Credits Guarantee Department also signed up to the deal.

The company is expected to go on stream in 2009 and it will add some specialised chemicals to the Saudi marketplace that will produced in Saudi Arabia for the first time.

These products include aminoethanols, aminomethyls, dimethylformamide, choline chloride, dimethylethanol, dimethylethanolamine, ethoxylates, phenol, cumene and polycarbonate. This is in addition to ethylene, propylene, polypropylene, ethylene glycol, butene-1 and other products which will provide wide opportunities for downstream industries.

SABIC holds a 35 per cent of the shareholding in Saudi Kayan with a private shareholder, Al Kayan Petrochemical Company, holding a further 20 per cent. The remaining 45 per cent is held by Saudi shareholders following an initial public offering in 2007.

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