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Saudi Arabia is still negotiating a deal with Virgin Hyperloop One, a source close to the company told CNBC, contradicting a report that Riyadh had pulled out amid tensions with founder Richard Branson.
The Financial Times reported earlier on Tuesday that Saudi Arabia terminated the planned deal following Branson's decision to halt investment talks with the country over missing journalist Jamal Khashoggi's whereabouts.
But CNBC's source said negotiations are still underway and that the FT report is inaccurate.
The two parties had originally planned to partner on a feasibility study for the high-speed transportation system. The deal was slated to be officially signed at next week's Future Investment Initiative conference in Riyadh.
Branson said in a statement last week that he will suspend discussions of a $1 billion investment into Virgin's space companies, Virgin Galactic and Virgin Orbit, amid ongoing investigations into Khashoggi's whereabouts. He also announced that he will step down from his role as director of two Saudi tourism projects aimed at transforming islands in the Red Sea into luxury resorts.
Khashoggi has not been seen since entering the Saudi consulate in Istanbul on Oct 2. Turkish officials have asserted that he was murdered inside the consulate, while the Saudis insisted that he left safely that day.
— CNBC's Ryan Ruggiero contributed reporting.