MOSCOW, October 29. NOVATEK may face difficulties in financing its largest project “Yamal LNG”, the newspaper “Kommersant”.
The Yamal LNG project involves the development of the Yuzhno-Tambeyskoye field and construction of LNG plant capacity of 16.5 million tons of LNG and 1 million tons of gas condensate per year. NOVATEK owns 60%, French Total and China’s CNPC – 20%. Another 9% of the JV must obtain Chinese silk road Fund.
Minister of energy Alexander Novak previously discussed with his French counterpart ségolène Royal is an opportunity to accelerate the financing of the project of NOVATEK “Yamal LNG”. The Russian Minister noted that “the project is implemented in time” and is expected “by the end of 2017 the first place is already running”.
According to interlocutors of the edition on the market, and NOVATEK, which because of sanctions may not attract funding in dollars, expects to receive more money from the European export credit agencies, as these loans will be cheaper than Chinese banks.
The total cost of the Yamal LNG project of $27 billion, has invested $10 billion Since the beginning of the year, NOVATEK dispatched 17 billion rubles, and in the third quarter has provided a loan of 245 million Euro (nine months to 482 million euros at 4.46 per cent per annum).
To maintain this pace of investment is difficult, as for the first half of 2016 represent the bulk of the company’s payments on short-term debt at 98 billion rubles., including the issuance of Eurobonds by $0.6 billion.
The solution would be to project financing up to $20 billion, NOVATEK more than a year negotiating, primarily with Chinese banks. The company expects that the first tranche it will receive in 2014, but in September, the head and co-owner of NOVATEK Leonid Mikhelson has already talked about the amount of 12 billion dollars from Chinese banks until the end of 2015. Market sources say that the main reason for the delay of the negotiations is too high rate on Bank loans in the PRC. Due to the delay of funding the state allocated for the project is 150 billion rubles from the national welfare Fund (NOVATEK still got half). A second tranche of 75 billion rubles the company expects in the coming weeks.