Yamal LNG Secures More Euro-Finance

Russia's Yamal LNG project has signed a €3.6bn loan with Russian state Sberbank and Gazprombank on a 15-year credit line facility at the Euribor six-month rate plus 4.7% annual interest rate, operator Novatek said April 11. The agreement signed with the Russian banks is part of the project financing package for the 16.5mn metric tons/year project which is cut off from access to dollar-denominated long-term debt.

Earlier in 2015 Yamal LNG received rubles 150bn (€2bn at today's rate) of financing from the National Welfare Fund of Russia. Yamal LNG's CEO Evgeniy Kot stated: "Together with the project’s shareholders, in the very near 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."

Yamal LNG shareholders are: Novatek (50.1%), CNPC (20%), Total (20%), and China's Silk Road Fund (9.9%). As a Russian energy company the operator cannot receive long-term dollar-denominated loans as the US has imposed sanctions on the country. Sanctions were imposed in August 2014 as punishment for destabilising Ukraine, less than a year after the partners took final investment decision on the $27bn project. 

It says the main tenders are completed and the key contracts for engineering, procurement of materials and equipment as well as construction works signed. Long-term sales contracts for more than 95% of the output have also been signed.

William Powell