Yamal LNG Lowers Cost of Credit

Yamal LNG has signed agreements with European banks that have lowered its average cost of borrowing and improved shareholder value, it said June 13. 

The project is planning to start recouping its costs this winter when its LNG plant in Yamal starts operations, most of the output being pre-sold.

Austria's Raiffeisen Bank International and Italian bank Intesa Sanpaolo are among those to have signed 14-year credit line facilities for the total amount up to €425mn at annual interest rates ranging from Euribor six-month+ 1.75% to Euribor six-month + 2.3%, with insurance coverage provided by the Swedish export credit agency EKN and the German export credit agency Euler Hermes. The new creditors have joined the terms of the project financing attracted earlier without increasing its overall amount.

Yamal LNG has previously received financing from the National Welfare Fund of Russia, signed agreements on credit lines with Sberbank and Gazprombank, as well as with the China Development Bank and the Export-Import Bank of China, the Japan Bank for International Cooperation (JBIC) and Intesa Sanpaolo with insurance coverage by the Italian export credit agency Sace and its French counterpart Coface..

Yamal LNG CEO Evgeniy Kot said: “Signing of the new agreements with the European banks will allow us to optimise the Yamal LNG credit portfolio. We have already raised sufficient amount of financing and further reduction of average cost of debt will increase the economic value of the project for our shareholders”.

William Powell