Russian firm Novatek today announced that it has signed binding definitive agreements with the Chinese investment fund, Silk Road Fund, to sell an equity stake in the Yamal LNG project.

The completion of the transaction is contingent on the finalisation of amendments to an intergovermental agreement between Russia and China.

The agreement saw Novatek and the Silk Road Fund sign a share purchase and sale agreement for a 9.9% equity stake in Yamal LNG. In addition, the Silk Road Fund agreed to loan Novatek the sum of €730 million to finance the Yamal LNG project. The loan is for a 15-year period and the larger part of it has been disbursed to Yamal LNG, Novatek said in a statement today. 

The Yamal LNG, based in the northern part of Russia,is a project that aims to provide 16.5 million tons per annum of LNG after the construction of an LNG plant. The gas will be supplied from the South-Tambeyskoye field.

Novatek welcomed the development, saying that it was another big step in the development of the project. "The signing of the binding agreements for the sale of an equity stake in Yamal LNG is another important step in the execution of our long-term development strategy," Leonid Mikhelson, Chairman of the Management Board of NOVATEK, said. "With the closure of this transaction we will achieve the appropriate target shareholder structure, which will contribute to the planned financing of the project and further facilitate its successful implementation."

Today, Russian President Vladimir Putin reaffirmed his and the state's support for the Yamal LNG project, Reuters reports, and said that LNG from the project would be capable of reaching nearly every global market for gas.