Kuwait is preparing to borrow $3.3 billion from local and international banks to finance its liquefied natural gas (LNG) import project in the Al-Zour region near the border with Saudi Arabia.
State-owned Kuwait Integrated Petrochemical Industries Company (KIPIC) has officially commissioned Kuwait National Bank and the Kuwait Finance House to manage a loan to finance a $1.25 billion project, while $1.56 billion will be borrowed from international banks, Kuwait Al-Seyassah newspaper reported.
The paper pointed out that the contracts will either be signed at the end of this month or next month.
It is estimated that the project will cost nearly one billion Kuwaiti dinars ($3.3 billion); 30 per cent of which will be self-financed by the Kuwait Petroleum Corporation (KPC), and 700 million dinars (2.3 billion) in loans including 56 per cent from local banks and 44 per cent from external financing institutions and channels.
The sources explained that KIPIC has ended all negotiations and administrative and legal details related to the financing mechanism.
According to the paper, the total amount of external borrowing is estimated at 320 million dinars ($1.1 billion), noting that the signing of foreign contracts is expected to take place in the middle of June.
Kuwait’s LNG project aims to help the country meet its power needs during the hot summer season.
In December last year, Kuwait Petroleum Corporation (KPC) signed a deal with Royal Dutch Shell Plc to import LNG for 15 years.