Yamal LNG Completes External Financing

Russia's Yamal LNG company has reached the end of its quest for financing, signing agreements with the Export-Import Bank of China and the China Development Bank for two 15-year credit line facilities, it said April 29.

The former is for €9.3bn at the six-month Euribor rate plus margin of 3.30% at the construction stage rising to 3.55% after the full commissioning of the project. The latter is for yuan 9.8bn (€1.3bn) at the six-month Shanghai Interbank borrowing rate, with the same margins.

Earlier, as part of the project financing package, Yamal LNG received financing from the National Welfare Fund of Russia in the amount of roubles 150bn (€2bn) and recently signed an agreement with Sberbank and Gazprombank on a 15-year credit line for the total amount of €3.6bn.

The agreements with the Chinese banks, together with financing provided by the National Welfare Fund and credit lines from the Russian banks, secure the required amount of external funding for the Yamal LNG project.

Yamal LNG boss Evgeniy Kot said the project was on schedule and the LNG plant 65% complete. "We are currently at the most intensive phase of construction and assembly works. Agreements with the Chinese banks allow to complete the project without additional funding by the shareholders."

Sanctions on Russia prohibit US and European Union banks from offering long-term financing to projects in Russia, which has found its financing from China. France is seeking to end the sanctions. French major Total is a direct minority shareholder in Yamal LNG, as well as a shareholder in project operator Novatek.

William Powell