Lukoil Borrows on Uzbek Project (Update)

(Updates on Kandym field start-up, paragraph 1)

Russian independent Lukoil has raised a $660mn loan to finance part of costs already incurred on construction of its Kandym gas processing plant in Uzbekistan, which is ahead of schedule.

State producer Uzbekneftegaz said in February 2018 that Lukoil would not start the second stage of its Kandym plant until May, a couple of months ahead of its scheduled start date of July. However it began on April 19. 

The existing first stage capacity of the Kandym plant is 4.05bn m³/yr, while the full capacity is 8.1bn m³/yr.  Lukoil said last month it plans to invest a further $3bn in Uzbekistan to boost its owned-gas output in various fields there from 6.5bn m³/yr last year, to 16bn m³/yr by 2021-2022 of which half will come from Kandym.

The loan, announced April 19 with Lukoil Overseas Uzbekistan as borrower, has a ten-year maturity and was provided by Dutch, Italian and German banks respectively: ING, UniCredit, and Deutsche Bank. Insurance is provided by the Korea Trade Insurance Corporation (K-Sure).

Lukoil said the agreement "represents a new level of financial co-operation" between Uzbekistan, South Korea, and Lukoil and "confirms high investment prospects of projects in the region." Uzbekistan exports some of its gas to China.