Yamal LNG gets $4.1 billion from Russian banks
Credits from state-controlled Sberbank and Gazprombank secure continued development of the great Arctic gas project.
The door to western credit institutions is closed, but project operator Novatek has managed to get Russian banks on board for additional credits. The money, of which $3.01 USD (€2.7) billion comes from Sberbank, is believed to be sufficient for project developments in 2016. The loan agreements cover 15 years and have a 4,7 per cent per annum rate.
However, the company will soon need more money.
According to Yamal LNG General Director Yevgeny Kot, that money is just around the corner.
“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,” Kot said in a statement. “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.”
The Yamal LNG project has a price tag of $27 billion. According to newspaper Vedomosti, Novatek and its partners have since 2014 negotiated with financial institutions like the China Development Bank и China Eximbank over $13.65 (€12) billion of credit.
From before, Novatek has spent $14.22 (€12,5) billion of shareholders’ capital on project developments and got 150 billion rubles ($2.29 billion) from the Russian National Wealth Fund. Earlier this year, a $1.37 (€1.2) billion credit was obtained from the Chinese Silk Fund in connection with that company’s acquisition of a 9,9 per cent stake in the project, Vedomosti informs.
The Yamal LNG project is due to come into production in 2017. It will deliver an annual 16,5 million tons of LNG to the world market, all of it based on the resources of the nearby South Tambey field. The project also includes the development of the Sabetta port, a major infrastructure hub on the eastern shore of the peninsula.
The Russian government has invested heavily in the Yamal project. More than 47 billion rubles ($718 million) of state money has been placed in the development of the Sabetta port and adjacent infrastructure. The project infrastructure also includes the development of a 50 km long sea channel stretching into the peninsula.
The Sabetta port will be built to handle more than 30 million tons of goods per year. It is to be operational all-year-round, despite the highly complex ice conditions of the Ob Bay.
The Yamal LNG partnership includes Novatek (50,1%), Total (20%), CNPC (20%) and Silk Fund (9,9%).
Related stories from around the North:
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Finland: Finland last to sign indigenous rights treaty?, Yle News
Sweden: Land, water rights big issues in Sweden’s Sami elections, Radio Sweden
United States: Obama, Trudeau announce plans to fight Arctic oil and gas pollution; Alaskans criticize lack of input, Alaska Dispatch
