Royal Dutch to build $4.5b project

Royal Dutch to build $4.5b project

BEIJING: Anglo-Dutch oil giant Royal Dutch/Shell and a Chinese partner plan to borrow a record US$2.7 billion from a group of banks to fund a vast petrochemical project in south China, state media said on Saturday.

The money will be channeled into the construction of the Huizhou complex, a venture with the China National Offshore Oil Corp., which at $4.5 billion is the biggest foreign investment in Chinese history, the China Daily said.

Chinese banks will lend $2 billion, while $700 million will come from eight foreign banks, including the Japan Bank for International Cooperation and the Export-Import Bank of the United States, the paper said.

The rest of the funding will be provided by the two joint venture partners themselves, as each of the companies will pour $900 million into the project, according to the paper.

The paper said this would constitute the largest financing of a private project in the Asia-Pacific region.

"The financing for the project has set a benchmark for financing in the Asia Pacific region," China National Offshore Oil Corp. said, according to the paper.

Once the project is completed in 2005, it is expected to produce 2.3 million tons of chemical products every year, generating up to $1.7 billion in annual products sales. --AFP