Gazprom Borrows $13bn for Far Eastern GPP
Russia’s Gazprom has signed an agreement for almost $13bn in project financing to build the Amur gas processing plant (GPP) in the Far East, describing the deal as “unprecedented.”
Gazprom’s wholly-owned subsidiary Gazprom Pererabotka Blagoveshchensk will borrow the funds from 22 European, Asian and Russian banks, Gazprom said in a stock filing on December 24.
“In terms of size, this deal has no precedence in the history of Gazprom and is among the largest project financing deals in Europe over the last few years,” the Russian company said.
The Amur GPP will process gas on route to China via the Power of Siberia pipeline, which began operations on December 2. The plant will consist of six 7bn m3/yr trains that are scheduled for commissioning between 2021 and 2024, making it one of the largest gas processing complexes in the world. In addition to marketable gas, it will also produce ethane, propane, butane, and pentane-hexane fraction. In addition, it will host the world’s largest helium production facilities.
Construction is 54% complete, according to Gazprom.
The financing secured this week will cover the bulk of Amur GPP’s cost, estimated at around €19bn ($21bn). Gazprom has said before it will pay for remaining expenses itself.
Some 14 European and Japanese banks have pledged to provide up to €3.66bn in funding insured by Western export credit agencies, and a further €1bn in uninsured financing. Bank of China, China Construction Bank Corp. and China Development Bank will issue a further €3.4bn, while multi-currency credit lines of €1.08bn and rubles 170bn ($2.8bn) will come from Russian lenders Gazprombank, Sberbank, VTB Bank, Otkritie Bank, and VEB.RF. Around a third of these sums will be covered by the Russian Agency for Export Credit and Investment Insurance (Exiar).