Saudi International Petrochemical Company (Sipchem) has signed agreements for Islamic loans of up to SR2 billion ($533 million) to support new projects.

The Ijara facilities will support projects including the Jubail acetyls complex (JAC) and a mega olefins complex.
Ahmad Al-Ohali, Sipchem’s executive president and board member, signed the facilities agreements with Riyad Bank, SABB, Al-Rajhi Bank, Bank Al-Jazira and Arab Investment Company.
The three affiliates of Sipchem in the JAC project, namely International Acetyl Company (IAC), International Vinyl Acetate Monomer Company (IVAC) and United Industrial Gases Company (UIGC) had signed a combined project finance loan facility of SR 2.1 billion with nine regional banks in December 2006.
The JAC project comprises three plants: the 460,000 tonnes per year (tpy) acetic acid plant, the 330,000 tpy vinyl acetate monomer plant and the 345,000 tpy carbon monoxide plant.  All three are expected to be operational in the first quarter of 2009.
The other major project under development is the olefins and derivatives complex which comprises 16 plants planned to be constructed in Jubail 2. The entire complex is estimated to cost more than $7 billion.
Al-Ohali said the new facilities followed on from the successful Islamic financing of a SR535 million commercial bank loan for International Methanol Company that closed earlier this year. They indicated Sipchem’s commitment towards Islamic financing for its projects in the future to the extent possible.