Chinese mega-deals in Yamal LNG

Project operator Novatek in March made clear that «several big deals» were in the pipeline. Those deals are now landed, and the company has the cash it needs for the development of the grand Arctic gas project.

The money comes from the Export-Import Bank of China and the China Development Bank. The 15-year loan deals include 9.3 billion euros ($10.6 billion) and 9.8 billion yuan ($1.5 billion), Vedomosti reports.

The euro-denominated part of the loan is being made at 3.3 percent above the European benchmark 6-month EURIBOR rate at the construction stage and 3.55 percent above thereafter. The renminbi loan is being made at 3.3 percent above China’s 6-month SHIBOR benchmark, and then 3.55 percent above

The Chinese credit deals come less than three weeks after Novatek signed a €3.6 billion deal with the Russian banks Sberbank and Gazprombank.

The total price tag of the Yamal LNG is estimated to $27 billion of which the project shareholders already have contributed with $15 billion.

The Yamal LNG project has a project target production of 16,5 million tons of LNG per year. Production start is due in November 2017.

Also the Russian government has invested heavily in the Yamal project. More than 47 billion rubles (€630 million) of state money has been invested the Sabetta port and adjacent infrastructure. The project infrastructure also includes the development of a 50 km long sea channel stretching into the peninsula.

The Sabetta port will be built to handle more than 30 million tons of goods per year. It is to be operational all-year-round, despite the highly complex ice conditions of the Ob Bay.

The Yamal LNG project is operated by Novatek (50,1%) in partnership with Total (20%), CNPC (20%) and the Silk Road Fund (9,9%).