Lukoil has obtained long-term financing worth US$1 billion for the Shah Deniz stage 2 project located in the Caspian Sea off the coast of Azerbaijan.
Specifically, the company signed a 12 year credit-facility agreement with consortium of banks to borrow US$1 billion.
Of that amount, US$560 million will be provided for 12 years jointly by the European Bank for Reconstruction and Development (EBRD), the Asian Development Bank (ADB) and the Black Sea Trade and Development Bank (BSTDB).
Located 70 km south-east of Baku on the deep water shelf of the Caspian Sea, the Shah Deniz full field development project is the second stage of the Shah Deniz endeavor. It will add 19 billion cubin meters per year (bcma) of gas production to the 9 bcma produced by stage 1.
The gas will be transported to the Georgia-Turkey border where additional pipeline systems will distribute 6 bcma of gas to Turkey and 10 bcma of gas to various markets in Europe.
The project has a total investment cost of roughly US$28 billion and consists of the following:
Stage 2 of Shah Deniz started in December 2013. The operating consortium is made up of BP (28.83%), TPAO (19%), Petronas (15.5%), SOCAR (10%), Lukoil (10%), NICO (10%) and SGC (6.67%).
The annual production will peak at 25 billion cubic meters of natural gas.
IPP Journal reported on Petronas' acquisition of a stake in Shah Deniz from Statoil in October 2014.