The Japan Bank for International Cooperation (JBIC) has inked a loan agreement to support the import of methanol from Saudi Arabia.

While JBIC declined to comment on the total size of the deal, which it is co-financing alongside Mizuho Bank and MUFG, the Japanese export credit agency (ECA) says it will provide US$432mn to Japan Saudi Arabia Methanol Company (JSMC).

The money will go towards helping JSMC, whose largest shareholder is Mitsubishi Gas Chemical Company, continue a joint venture project it has been running with Saudi Basic Industries (Sabic) for over thirty years.

In 1980 the firms created the Saudi Methanol Company (AR-RAZI), and since 1983, AR RAZI has been producing and selling the chemical, which is a type of alcohol often used to make fuel, solvents and anti-freeze.

JSMC and Sabic’s venture is due to run until the late 2030s after the pair agreed to extend the deal by 20 years towards the tail end of 2018. Their previous agreement had expired in November of that year.

In a statement, JBIC says: “In this project, JSMC will continue to offtake a certain portion of the methanol produced by AR-RAZI and sell it mainly to companies in Japan.”

JBIC adds: “Since Japan has relied entirely on import for the methanol domestically consumed, this loan is intended to contribute to maintaining the overseas methanol production bases where Japanese corporations are participating, and to diversifying Japan’s methanol supply sources, thereby contributing to securing stable supply of energy resources for Japan.”

The ECA says the loan is the sixth to be provided as part of its new Growth Investment Facility, which it launched in January to assist “Japanese companies with overseas M&As and global value chain restructuring as well as development of quality infrastructure”.