Saudi International Petrochemical Co (Sipchem) has been given regulatory approval to issue an Islamic bond, or sukuk, it said on Sunday.   

The company said it would decide the size at a later stage after it got approval from Saudi Arabia's Capital Market Authority.   

Sipchem said in December it planned to raise at least 1.5 billion riyals ($400 million) through a sukuk issue by the first quarter of 2011 to finance new projects.

Chief executive Ahmad Al-Ohali told Reuters in December Sipchem had mandated one local and one international bank as financial advisers but declined to give details.

The firm is planning to spend 400 million riyals to build the first ethyl acetate plant in the region, with the help of French chemical group Rhodia, to rival major commodity producers such as BP.