Yamal LNG project features fully secured financing today, says NOVATEK

As of today, financing of the Yamal LNG project has been secured in full, IAA PortNews correspondent cites Leonid Mikhelson, Chairman of the Management Board of NOVATEK, as saying at the SPIEF (St. Petersburg International Economic Forum). 

Leonid Mikhelson says the shareholders have invested some $13 bln into the project. 

“In 2014 NOVATEK inexplicably fell under the sectoral sanctions imposed by the US. Our dialogue with the international financial consortium slackened a little. At that time we were supported by the government and we raised RUB 150 bln of state finances which allowed us continue implementation of the Yamal LNG project according to the schedule”, said Leonid Mikhelson. 

He also told about the support of the Russian Agency for Export Credit and Investment Insurance (EXIAR) allowing for signing of loan agreements with Russian banks. EXIAR, PAO Sberbank, and Gazprombank JSC concluded a loan insurance policy for Yamal LNG in April 2016. 

As part of the agreement, EXIAR has insured PAO Sberbank and Gazprombank JSC’s loan of 3.6 billion euros over 15 years to Yamal LNG JSC in order to create export-oriented production of liquefied natural gas. 

Total project financing is estimated at $18.4 bln. Apart from Russian banks’ loans it will include the resources of the National Welfare Fund of the Russian Federation and the banks of China. 

Leonid Mikhelson also says 96% of the new plant’s product has already been contracted. 

The Yamal LNG project envisages the construction of an LNG plant with annual capacity of 16.5 million tons of LNG and 1 million ton of gas condensate based on the feedstock resources of the South-Tambeyskoye field. First supplies are scheduled for 2017. Most LNG will be exported to the countries of the Asia Pacific Region. 

Yamal LNG is a joint venture between NOVATEK (50.1%), TOTAL (20%), China National Oil & Gas Exploration and Development Corporation (CNODC) (20%) and Silk Road Fund (9.9%).