CDB provides $607 million USD buyer's credit loan for Phase II of Shymkent Oil Refinery Reconstruction and Modernization Project (Linked to Project ID#72399)

On June 9, 2017, China Development Bank (CDB) signed a $607 million USD export buyer's credit agreement with the Development Bank of Kazakhstan JSC (DBK) for Phase 2 of the Reconstruction and Modernization of the Shymkent Oil Refinery. DBK then used the proceeds from the CDB loan to on-lend to a project company (special purpose vehicle) called PetroKazakhstan Oil Products LLP (PKOP). The CDB loan facility had a maturity date of April 25, 2030 and carried an interest of rate of 2.7% per annum plus LIBOR. No amounts were outstanding under the facility as of June 30, 2017. As of September 2017, DBK had drawn down $100 million USD under the CDB facility (see pg.47 of 'Development Bank of Kazakhstan Base Prospectus 2017'). PKOP contributed some of its own funds towards the project (see 'PetroKazakhstan Oil Products LLP information'). Additionally, China Export & Credit Insurance Corporation (Sinosure) organized a bank syndicate of Calyon, Sumitomo Mitsui Banking Corporation, Bank of Tokyo-Mitsubishi UFJ, and Deutsche Bank to support the project (see '十八年服务新中国对外开放 新战略助力中国信保再启航'). The syndicate provided $225 million USD to DBK for on-lending, while Sinosure provided export buyer’s credit insurance (see '中石油工程建设公司 向信用保险“借力”发展').The Export-Import Bank of China pledged $1 billion USD for the first phase of the modernization of the refinery as captured by linked project ID#72399. The project sought to increase annual production from 5.25 million to 6 million tons and improve refining levels. After the modernization (including Phase I , the plant was to be more environmentally friendly and able to produce Euro-4 and Euro-5 products (see 'Shymkent Oil Refinery completes modernisation, improves fuel and environmental standard'). The project also included the construction of a complex of catalytic cracking units with a capacity of 2 million tons a year, an alkali treatment unit, a amine recovery unit, a sour water stripper, a pressure swing absorption unit, a unsaturated LPG desulfurization unit, a saturated LPG desulfurization unit, a sulfur production unit, and a revamping of the CDU of LK-6U complex. China Petroleum Engineering and Construction Corporation (CPEEC) was the general contractor responsible for project implementation (see 'The Shymkent Refinery is the model of successful partnership'). Phase II was completed on August 15, 2018 (see '哈萨克斯坦奇姆肯特炼厂二期改造工程开工成功 ').The shareholders of PetroKazakhstan Oil Products LLP were CNPC Exploration and Development Company Ltd. (50%) and JSC Exploration & Production KazMunayGas (50%) (see 'China's CNPC completes upgrade at Kazakh's Shymkent refinery'). CNPC Exploration and Development Company Ltd. was a subsidiary of PetroChina Company Ltd. and a 50/50 joint venture between PetroChina and CNODC. JSC Exploration & Production KazMunaiGas (EP KMG) was engaged into production of crude oil at the oil fields in western and southern Kazakhstan, and was a subsidiary of JSC National Company KazMunayGas (see 'Shareholders').

Additional details

1. The LIBOR rate was not specified, so the 6-month LIBOR is assumed. In June 2017 the average 6-month LIBOR rate was 1.432%. Therefore, AidData has coded the 'all-in' interest rate as 1.432% + 2.7%, or 4.132%.2. The Chinese name of this project is 哈萨克斯坦奇姆肯特炼厂二期. 3. PKOP is a joint venture between KazMunaiGaz and CNPC, which was created in 2005.

Number of official sources

12

Number of unofficial sources

7