UAE's ENOC to Self-fund Refinery Expansion

Reuters, October 20, 2016

Emirates National Oil Co. (ENOC) has decided it will self-finance the $1 billion expansion of its Jebel Ali oil refinery, having talked with regional and international banks about a potential loan, its chief financial officer told Reuters. State-owned ENOC plans to expand the refinery by 50 percent, aiming to start commercial production in 2019.

The company was in talks with relationship banks earlier this year for a U.S. dollar debt facility, bankers said, with one of them adding that the amount being discussed was in the region of $1 billion. The company was considering a loan backed by export credit agencies, another banker said. But the plan to raise debt financing on a project basis has been shelved for the time being because of the company's existing liquidity and projected cashflow, which allows it to back the refinery project without raising external debt, Petri Pentti said in an interview.

ENOC awarded Technip the engineering, procurement and construction (ECP) contract for the processing unit in September. On completion, the expansion will increase ENOC's refining capacity by 70,000 barrels per day. ENOC raised a $1.5 billion, nine-year syndicated loan in 2015. The unsecured general corporate facility has now been fully utilised, said Pentti.


(Reporting by Davide Barbuscia and Tom Arnold. Editing by Andrew Torchia, Greg Mahlich)

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