Chinese Investment Fund Picks Up Stake in Yamal LNG Project

China’s Silk Road Fund (SRF) has bought 9.9 percent equity stake in the Yamal LNG project.

The framework agreement was concluded between Novatek and SRF on Thursday in Beijing in the presence of the President of Russian Federation Vladimir Putin and the President of People’s Republic of China Xi Jinping, the Russian firm said in a statement.

According to the agreement, the transaction is scheduled to close after the satisfaction of stipulated conditions precedent, including the receipt of all necessary approvals. Following the completion of the deal, the shareholder structure Yamal LNG will be as follows: Novatek (50.1 percent), Total (20 percent), CNPC (20 percent) and SRF (9.9 percent).

President of SRF, Wang Yanzhi stated, “We consider Yamal LNG to be one of the most prospective and competitive LNG projects in the world. Such observation supports our interest in becoming its shareholder. We hope our entrance into the Project will facilitate an expedited closing of the project’s general external financing, as well as contribute to further development of the Chinese-Russian cooperation in the energy sector.”

Yamal LNG project envisages the construction of an LNG plant with annual capacity of 16.5 million tons per annum based on the feedstock resources of the South-Tambeyskoye field. The proven and probable reserves of the South-Tambeyskoye field as of 31 December 2014 were appraised at 926 billion cubic meters of natural gas.

Chairman of the Management Board of NOVATEK, Leonid V. Mikhelson stated, “We welcome SRF’s entrance into the Yamal LNG project as another step forward in the mutually beneficial cooperation with our Chinese partners in the development of gas projects in the Russian arctic region”.