International Petroleum Investment Co. plans to approach banks this year to finance an oil refinery at the United Arab Emirates’ largest port outside the Strait of Hormuz, a person with knowledge of the plans said.
The Abu Dhabi-owned fund, known as IPIC, appointed HSBC Holdings Plc (HSBA) as financial adviser for the project, said the person, who asked not to be identified because the information isn’t public. The person didn’t say when the company would raise funds or how much it would seek. HSBC declined to comment, and IPIC didn’t have an immediate comment when contacted by telephone today.
Oil producers in the Persian Gulf are expanding refining capacity to meet domestic demand for fuel. IPIC plans to build the refinery at the port of Fujairah in the U.A.E. sheikhdom of the same name. Fujairah is the only of the U.A.E.’s seven emirates with a coastline fully outside Hormuz, the oil-shipping chokepoint at the mouth of the Gulf.
The 250,000 barrel-a-day refinery project may cost $4 billion to $5 billion, Khadem al-Qubaisi, the company’s managing director, said in July. MEED magazine reported IPIC had awarded the mandate to HSBC on March 14.
IPIC said in November it was considering funding options including non-recourse project financing for its Fujairah plant and another facility planned at Duqm in neighboring Oman. Together with state-owned Oman Oil Co., its partner in the Duqm refinery, the company may seek bank advisers for that project later this year, said the person.
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