Russia’s $27bn Yamal LNG signs loan agreement with two Chinese banks

Russia’s $27bn Yamal liquefied natural gas (LNG) project has signed 15-year loan agreements worth more than $12bn with Export-Import Bank of China and the China Development Bank.

Natural gas producer Novatek owns a 50.1% stake in the project. French company Total and China National Petroleum hold 20% stake each, while the remaining 9.9% is owned by China’s Silk Road Fund (SRF).

Yamal LNG has already received $2.3bn from a fund and €3.6bn from state-controlled Sberbank and Gazprombank.

Reuters quoted Yamal LNG director general Yevgeny Kot saying: “The project is progressing in accordance with the approved schedule.

“With the first train of the LNG plant 65% complete we are currently at the most intensive phase of construction and assembly works.”

With the new funds in place, the Yamal LNG project will be able to begin production of liquefied gas in 2017.

The project will involve the construction of an LNG plant with three trains, each with a capacity of 5.5 million tonnes per year.

In March 2016, Novatek completed the sale of a 9.9% equity stake in the Yamal LNG project to SRF for €1.8bn.

The company received a 15-year loan of €730m from SRF in December 2015 for financing the project.

The future of the project had been in danger due to the lack of access to Western capital markets, as well as plunging oil prices.

---

Image: The Yamal LNG project will involve the construction of an LNG plant with three trains. Photo: courtesy of Novatek.