NOVATEK raises funds for Arctic LNG 2

Thursday, 01 October 2020
Free Read

International finance providers were thought to have raised about $9.5 bill for
NOVATEK’s Russian Arctic LNG project, Arctic LNG 2, a document seen by Reuters said.

The $21 bill project, which received FID approval a year ago, is expected to be onstream in 2023 and to reach its full capacity of almost 20 mill tonnes per year in 2026.

Among the overseas lenders listed is French state investment bank and export credit agency Bpifrance, with an offer of $700 mill in credit finance; the China Development Bank, expected to offer a facility worth $5 bill and Germany’s Euler Hermes, with a covered facility of $300 mill, the document said.

It was also revealed that a number of other state-backed institutions had also expressed interest in helping to fund the project, including the China Development Bank.

The Japan Bank for International Co-operation will also provide a facility of $2.5 bill; an unnamed Russian bank $1.5 bill and Italy’s SACE, a covered facility of $1 bill.

Russian lender Sberbank had earlier said it was ready to pump in more than €2.7 bill in financing for the project.

Arctic LNG 2 is being planned to process gas from the Gydan Peninsula and ship 80% of the LNG produced to Asia.

The project’s equity partners include Total, China National Petroleum Corp, CNOOC and the Japan Arctic LNG consortium involving Mitsui & Co and state-owned JOGMEC, formally known as Japan Oil, Gas and Metals National Corp.

Guarantees expire

In addition, NOVATEK announced that after fulfilling all the conditions stipulated by Yamal LNG’s external bank financing, the debt service guarantees were removed.

“We have reached another significant milestone on Yamal LNG with the removal of the guarantees relating to the project’s financing.” said Leonid Mikhelson, NOVATEK’s Chairman of the Management Board. “The removal of the guarantees will allow NOVATEK to attract external financing for its new projects on more favourable terms, and equally important, removes the restrictions on our dividend payout ratio.”

It has also been reported that NOVATEK has secured a €522 mill loan with a period of 16 years from Gazprombank to finance the construction of two large FSUs.

The 361,600 cu m FSUs are to be built at Daewoo, will be deployed at NOVATEK’s Kamchatka and Murmansk Oblast projects and used for year-round LNG transhipment from Arc7s to conventional LNGCs. 

Related Video

Free Read