Milbank Advises the Lenders on the US$5.2B PetroRabigh Expansion Project

Milbank, Tweed, Hadley & McCloy LLP has advised Japan Bank for International Cooperation (“JBIC”), Saudi Arabia’s Public Investment Fund (“PIF”) and various commercial banks/Islamic financial institutions on the US$5.2 billion expansion financing for the PetroRabigh Refining and Petrochemicals Project in Saudi Arabia.

Located on Saudi Arabia’s Red Sea coast, PetroRabigh’s existing plant can produce an annual 17 million tons of refined products and 2.4 million tons of petrochemical products. The new expansion facility, known as Rabigh 2, is a joint venture between Saudi Aramco and Japan’s Sumitomo Chemical, and is designed to increase output from the plant as well as introduce higher-margin products. It will bring derivative products that are high value-added and in high demand, including ethylene propylene diene monomer rubber, thermo plastic olefin, methyl methacrylate and polymethyl methacrylate. When the expansion is completed, PetroRabigh will be one of the world’s largest combined refinery and petrochemical’s complexes.

The Milbank deal team was led out of the firm’s London office by partners Phillip Fletcher, John Dewar and Clive Ransome, with assistance from senior associate, Andrew Pendleton, and associates, Munib Hussain, Felicia Hanson Ofori-Quaah, Jenna Darler and Philip Benger, amongst many others. The team advised both the existing lenders to the project company and the expansion financing parties on both conventional and Islamic finance instruments. The same lenders were also advised on matters of Saudi law by Hatem Abbas Ghazzawi & Co (Saudi Legal), with a team led by partner Ali Abedi.

Phill Fletcher said “The Rabigh 2 Project is another landmark project financing for the sponsors and for Saudi Arabia. As a carefully integrated expansion of a fully operational project, it required a truly integrated financing. We had the pleasure of advising both the existing financing parties and the expansion financing parties, and we are proud to have also worked with the experienced project company and sponsors, together with their various advisers, to deliver on this complex challenge.”

Milbank was appointed to advise the lenders on this latest major project financing in Saudi Arabia, following on from our work in 2013 on the Sadara Integrated Chemicals-Project (circa US$12.5 billion financing), the largest ever multi-sourced project financing in the petrochemicals sector and among the very largest project financings ever undertaken globally.