Saudi Basic Industries Corp (SABIC) said on Monday that its joint venture with China's Sinopec has obtained financing worth a total of $2.68 billion for their Tianjin petrochemical complex. SABIC also said in a statement that it has started trial operations at an ethylene plant and other plants in the Tianjin complex, which has a production capacity of 3.2 million tonnes per year, it added.

The joint venture obtained 12.26 billion yuan ($1.8 billion) long-term financing from Chinese lenders and 6 billion yuan to cover its working capital needs, SABIC said in a statement on the Saudi bourse website.

Sabic and Sinopec received financing from China Construction Bank, China Development Bank, Industrial and Commercial Bank of China, Bank of China, Agricultural Bank of China and Sinopec Finance Co SABIC would need to bring more plants online as part of plans to raise its total production to 130 million tonnes of petrochemicals by 2020, from 56 million tonnes in 2008, Mohamed al-Mady said in December.

Companies based in the Gulf are now relying more on government institutions' funds to take part in project financing as banks have tightened lending. Sabic plans to increase its investments in China, a market al-Mady described as having good growth potential.

Copyright Reuters, 2010