NOVATEK secures line of credit for Yamal LNG project

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NOVATEK secures line of credit for Yamal LNG project

OAO NOVATEK, Russia's largest independent natural gas producer, has signed a loan agreement with Sberbank and Gazprombank, both from Russia as well. The loan will be used as part of the financing package for the company’s Yamal LNG liquefied natural gas project, which is located in northern Russia.

Yamal LNG project envisages the construction of an LNG plant based on the feedstock resources of the South-Tambeyskoye field. According to the PRMS reserve standards, the proven and probable reserves of the South-Tambeyskoye field as of 31 December 2014 were appraised at 926 billion cubic meters of natural gas. The project is currently at the active construction stage.

The planned LNG plant will have three trains with total capacity of 16.5 million tones of liquefied natural gas per year. First train will be operational by the end of 2017 and the full capacity will be achieved by 2021. In addition to the LNG plant, the project includes construction of a seaport and airport as also a 282 MW power plant.

The deal between the Russian gas producer and the banks has amounted €​3.6 billion (US$4.1 billion). Additonally it has been signed a 15-year credit line facility at Euribor 6 month plus 4.7% annual interest rate.

This month NOVATEK also revealed the closing of a transaction to sell a 9.9% equity stake in the project to China’s Silk Road Fund (SRF) in a deal amounting €1,087 million (US$1,237 million). Following the deal completion, the shareholder structure of the project is the following:

  • NOVATEK  50.1%
  • Total S.A. 20%
  • China National Petroleum Corporation 20%
  • Silk Road Fund 9.9%

According to sources, General Director of Yamal LNG, Evgeniy Kot, said:

“Together with the project’s shareholders, in the nearest future we plan to secure the remaining amount of the external financing required for Yamal LNG. The project is progressing in accordance with the approved schedule and we confirm our plans to launch the first train of the LNG plant in 2017,”

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