By Swann Bigot, legal expert and consultant in international affairs, for Eurasia Network – December 16, 2016

yamal-lng-plant-credit-novatek-photo-gallery-2016

Yamal LNG plant – Credit : Novatek, Photo Gallery 2016.

Novatek’s Yamal LNG has signed a loan agreement with the Italian bank Intesa Sanpaolo for a 14.5-year credit line worth € 750 million.[1]

The credit has an annual interest rate of 6-month EURIBOR plus 2.5 percent, under the insurance coverage of the Italian export credit agency SACE and the French export credit agency COFACE.

“Signing of the loan agreements is an important step enabling to reduce the average cost of our external debts. We welcome the decisions of international export credit agencies to participate in the financing of this LNG project, demonstrating the global significance and world scale nature of Yamal LNG,” said in a statement Evgeniy Kot, General Director of Yamal LNG.2

On November 8, former Russia’s minister of economic development Alexei Ulyukayev told journalists that Italian banks, including Intesa Sanpaolo, will provide Yamal LNG project with more than 400 million euros ($440 million) in 2017.3 The loan is now worth €750 million over 14.5 years.

On November 30, French Minister of Economy Michel Sapin said that he has personally agreed in principle that French export credit agency COFACE takes part in financing the Yamal LNG project in order to support export contracts of many French companies (Total, Technip, Vinci Entrepose / TMSI).4

Last April Novatek announced that the $ 27 billion Yamal LNG project had secured the billions in financing it needed from Russian and Chinese banks.

Loan agreements have been signed with Gazprombank JSC (€ 900 million), Sberbank PJSC (€ 2,7 billion) and the Chinese banks Export-Import Bank of China and China Development Bank for an amount equivalent to $ 12 billion over 15 years. The Russian National Wealth Fund also provided funding worth 150 billion rubles in 2015 ($ 2.3 billion).

In the Yamal peninsula, the Russian gas company Novatek is leading with foreign partners the project “Yamal LNG” which encompasses natural gas production, liquefaction and shipping toward European and Asian markets, beginning in 2017. This is one of the biggest current investments in the Russian gas industry and the first to be implemented in the north of the Arctic polar circle, in extreme climatic and logistical conditions, for a global cost of $27 billion.

The shareholders of the « Yamal LNG » joint venture are Novatek (50.1%), France’s Total (20 %), China’s CNPC (20%) and Silk Road Fund (9.9%).

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© Copyright 2016 – Swann Bigot, legal expert and consultant in international affairs.

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Sources : 

[1]« Intesa Sanpaolo предоставит “Ямал СПГ” кредитные линии на 750 млн евро на 14,5 лет », ТАСС, 12/12/2016 : http://tass.ru/tek/3864573 ;

« Ямал СПГ займет €750 млн на строительство завода »РБК, 12/12/2016 : http://www.rbc.ru/newspaper/2016/12/13/584e95029a79477fb8cd59f1 ;

« Компания «Ямал СПГ» подписала кредитные соглашения с Intesa Sanpaolo на € 750 млн », Коммерсантъ, 12/12/2016 : http://kommersant.ru/doc/3169149 ;

2 Ibid.

3 « Итальянские банки профинансируют «Ямал СПГ» на сумму более €400 млн », РБК, 08/11/2016 : http://www.rbc.ru/rbcfreenews/5821fc839a7947d6ff2dc506 ;

4 «Министр экономики Франции: французские предприниматели не будут долго раздумывать над покупкой активов в России», Интерфакс, 01/12/2016 : http://www.interfax.ru/interview/539313 ;