WASHINGTON, D.C., May 27 -- The Board of Directors of the International Finance Corporation (IFC) has approved $350 million of debt financing for Star Petroleum Refining Co. Ltd. (SPRC) to construct a $1.85 billion oil refinery in Thailand. The refinery will be located in the Map Ta Phut Industrial Estate in Rayong Province, 220 km southeast of Bangkok. When completed in 1996, the refinery will have the capacity to produce 130,000 barrels per day of unleaded gasoline, low sulfur diesel, and other refined products. Thailand is presently a large net importer of refined petroleum products. This refinery, Thailand's fifth, will significantly help to meet increased domestic demand for high quality petroleum products that will comply with Thailand's recently introduced stringent environmental standards. SPRC is a joint venture between Caltex Trading and Transport Corporation (CTTC), a subsidiary of Caltex Petroleum Corporation (CPC), and the Petroleum Authority of Thailand (PTT), the state enterprise responsible fo
r managing Thailand's energy resources. CTTC's investment in SPRC will be through CXO Limited (CXO), a joint venture with CTTC and Oman Oil Co. Ltd., a company owned by the Sultanate of Oman. CXO will hold 64 percent and PTT 36 percent of the equity in SPRC. The financial advisers to SPRC, IFC and Barclays Bank PLC, have played a key role in efforts to mobilize the financing for this $1.85 billion project. The financing package is to consist of: (i) $555 million in equity financing provided by SPRC's shareholders; and (ii) $1.29 billion in debt financing from IFC, a consortium of major international and Thai commercial banks, as well as direct export credit facilities. IFC's $350 million financing package will include a loan of $75 million for IFC's own account and $275 million in loan participations -- the largest IFC syndicated loan to date.
Additional financing is to include a parallel commercial loan/guarantee facility of about $450 million and direct export credits and export credits guaranteed by Thai commercial banks of about $400 million. Twenty-five banks (twenty-two international and three Thai) have formed an arranging group with the objective of underwriting all facilities, as necessary. The Export-Import Bank of the United States has given a preliminary commitment to finance up to $300 million of exports of goods and services from the U.S. on a post completion project risk basis in the form of direct loans or guarantees to the company. Overall management of the project will be provided by Caltex Service Corporation which has extensive worldwide experience in the construction of new refineries and expansions of existing refineries. Three major consortia are bidding for the engineering, procurement and construction contract which will be awarded in October 1993. The bidders are Bechtel/Daelim/Lucky, Chiyoda/Toyo Engineering and JGC Conso
rtia. Construction will take three years and the refinery is scheduled to come onstream in mid-1996. SPRC is designed as a deep conversion refinery using residuum cat cracking. This will be the first refinery in Thailand using such technology, and will be considerably more sophisticated than most refineries in Southeast Asia. It will produce clean, high quality blended products that will meet Thailand's stringent environmental standards. The technology will also offer the flexibility to process a wide variety of crude types and to adjust the product mix according to Thailand's changing market requirements. SPRC is relying exclusively on commercially proven state-of the-art technology under license agreements with top technology suppliers. IFC is a member of the World Bank Group and is the largest source of equity and loan financing for private sector projects in developing countries.
