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Petroleum industry

South Korea's Export Insurer Offers $1 Billion in Support for Saudi Oil Refinery Project

Strategic Insights

— 2 min read

South Korea's Korea Export Insurance Corp. (KEIC) has announced its plans to provide financial support in the form of buyer credits to a Saudi Arabian oil refinery project being developed by local companies and French oil company Total. The Jubail refinery project, valued at $12.8 billion, aims to process 400,000 barrels of oil per day and is considered one of the largest refinery projects in recent years. KEIC's support will allow commercial banks to lend money to the project without worrying about payment risks, facilitating the construction of the refinery. This move is seen as a key factor in South Korean companies securing the contract, along with their competitive pricing.

Key Takeaways:

  • KEIC plans to offer the equivalent of $1 billion in financial support to the Jubail refinery project.
  • The support will be in the form of buyer credits, covering loans to the project company responsible for the construction of the refinery.
  • The project company is set up by Saudi's Aramco and France's Total, with the latter footing 45% of the building costs.
  • Three South Korean contractors, Daelim Industrial Co., SK Engineering & Construction Co., and Samsung Engineering Co., have won the right to participate in the project.
  • KEIC plans to offer similar payment guarantee coverage for future projects that South Korean companies want to take part in.
  • Saudi Arabia plans to hold bids for several projects, including the Yanbu refinery and two plants in Ras Tanura and Rabigh.

Statistics:

  • The Jubail refinery project has a total construction cost of $12.8 billion.
  • The refinery will process 400,000 barrels of oil per day.
  • KEIC plans to offer the equivalent of $1 billion in financial support to the Jubail refinery project.
  • South Korean companies secured 33% of the contract value remaining after Aramco's and Total's contributions.
  • The project timeline includes the construction of the Yanbu refinery in May, and two plants in Ras Tanura and Rabigh in the coming months.

Sources:

  • "South Korea's state-run export insurer will offer the equivalent of US$1 billion in financial support to a Saudi Arabian oil refinery project being built by local companies." - Asia Pulse
  • "The project company has been set up by Saudi's Aramco, the state-owned national oil company, and France's Total oil company..." - Asia Pulse
  • "Saudi Arabia said it will hold bids for the building of the Yanbu refinery in May, and two plants in Ras Tanura and Rabigh in the coming months." - Yonhap

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