Novatek Board Approves Yamal LNG Finance
Novatek shareholders approved a series of related party transactions that will make up over two thirds of the financing of the Yamal LNG project at an extraordinary general meeting June 20.
It said in a statement that the "approved transactions and agreements relate to obtaining project financing for the Yamal LNG project with participation of Russian and international financial institutions in the amount of up to $19bn. As of today, Yamal LNG has concluded loan agreements in relation to financing from the National Welfare Fund of Russia as well as project financing agreements with Sberbank, Gazprombank, Export-Import Bank of China, and the China Development Bank for the amount equivalent to $18.4bn, of which more than $4bn has already been withdrawn."
Yamal LNG (image credit: Novatek)
Yamal LNG is building the 16.5mn metric tons/yr liquefaction plant that will be fed with gas from the South-Tambeiskoe field. First LNG production is scheduled for 2017, and it will be Russia's second and largest LNG project. Yamal LNG shareholders are: Novatek (50.1%), China National Petroleum Corp (20%), French Total (20%), and China's Silk Road Fund (9.9%) which also lent the project money.
Sanctions imposed by the US and the EU on Russia have cut off access to long-term financing from the west but Chinese lenders have stepped in. Much of the plant's output will go to Asian markets including China and it is all pre-sold, giving lenders some certainty. The total cost of the project is expected to be $27bn.
William Powell | www.naturalgaseurope.com