Saudi Private Venture - Saudi Venture Capital Group.

Comprising 47 key Saudi businessmen, SVCG is in a 50-50 venture with Chevron which has a world-scale aromatics complex built in Jubail. It is the first big private Saudi venture in the aromatics business. It was completed in April 1999 with a capacity to produce 480,000 t/y of benzene which is partly being used to produce 220,000 t/y of cyclohexane, a feedstock to make plastics.

The $650m complex uses Chevron's Aromax technology to produce benzene. The cyclohexane is produced using technology licenced by Institut Francais du Petrole. Called Saudi Chevron Petrochemical Co, it is Chevron's first direct investment in Saudi Arabia since the kingdom's oil sector was nationalised in 1980. The complex uses gas feedstock supplied by Saudi Aramco.

With preparations for the JV having started in 1993, the complex was built by Chiyoda Corp of Japan under a turnkey contract signed in February 1997. Basic engineering was done by Fluor Daniel. Utilities and offsite facilities were subcontracted to local companies. The Saudi Industrial Development Fund (SIDF) provided $136m in interest-free loans.

Then the venture was financed through a unique model of Islamic collateral security (ICS), because it had strong elements: extensive local equity held by SVCG; international equity held by Chevron; a strong local lending base from Al Bank Al Saudi Al Fransi, Saudi British Bank and United Saudi Bank; a regional lending base from Gulf International Bank; an international lending base through Chase Manhattan; limited recourse financing techniques applied by the JV's advisors; and diversification in the petrochemicals business.

SVCG was the first group of its kind to be formed in 1986 to invest in downstream projects promoted by SABIC and the Offset Investment Programme. In 1987 SVCG was granted industrial licences for three plants representing a total investment of SR1.33 bn to produce specialty chemicals, with each to be developed by a separate subsidiary.