CNPC Agrees to Take 20% Stake in Yamal LNG

China National Petroleum Corporation (CNPC) has agreed to acquire a 20% stake in Novatek’s Yamal LNG project.

The Chinese firm will also get least 3 million tons of LNG per annum from the project.

In addition to these, under the framework agreement on cooperation signed in St. Petersburg, CNPC has agreed to assist in organizing external financing from Chinese financial institutions for the construction of an LNG plant.

The acquisition of a 20% stake in the Project by CNPC is estimated to be closed by October 1, 2013.

“This agreement is a very important step in the implementation of the Yamal LNG project. We see CNPC as a reliable partner with considerable experience in international LNG projects, as well as a long-term buyer of LNG representing one of the fastest growing gas markets in the world. We are also looking forward to CNPC’s significant contribution into attracting external financing for the Project,” Novatek’s Chairman of the Management Board, Leonid V. Mikhelson said.

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.

A statement released by Novatek did not say how CNPC’s entry will affect the current shareholding in the project where currently the Russian firm holds 80% and Total the remaining 20%.