MOSCOW, December 11. NOVATEK could not in time to close the deal with the Chinese silk road Fund (SFR) for the sale of 9.9% in “Yamal LNG”. On Friday the governmental Commission on foreign investments to approve the deal, and yesterday the White house considered the intergovernmental agreement on it, the newspaper “Kommersant” with reference to sources familiar with the situation.
The newspaper’s sources explain the delay issues from China. The problem can be and in light of Beijing’s desire to change the terms of the transaction, and that the Russian side has not considered all the details of the local hardware games.
In the government newspaper confirmed that the issue is on the agenda of the Commission. Also, according to the publication, yesterday the government in the closed mode has considered and in principle approved an intergovernmental agreement with China on the deal. According to sources, the text of the agreement was sent to the Chinese side only this week, so the signing will take some time.
However, the newspaper, the deal between NOVATEK and SFR is still not closed. Meanwhile, according to the minutes of the meeting of the Russian-Chinese intergovernmental Commission of 16 November, a legally binding transaction documents were to be signed until December 10. Besides the time SFR was required to provide for the Yamal LNG project loan, the amount which the interlocutors of the newspaper market was previously estimated at $500 million based on the conditions on which the other participants – Chinese CNPC and French Total. In NOVATEK yesterday declined to comment.
Yamal LNG project the LNG plant on the basis of the South Tambeyskoye field on the Yamal Peninsula (the reserves under PRMS – 907 billion cubic meters). There are three lines of 5.5 million tons of LNG per year, starting in 2017, reaching full capacity in 2021. Shareholders are NOVATEK (60%), Total (20%) and Chinese CNPC (20%). The project cost $28 billion.
The value of the deal with the Chinese for NOVATEK and Yamal LNG in General in that it serves as a prologue to receiving money from Chinese banks. Total project funding should amount to $20 billion, and the Chinese were waiting for about half of this amount. It was assumed that agreement on the loans will be achieved in the middle of the year (the negotiations seriously complicated the inclusion of NOVATEK on the sanctions list of the USA), but this has not happened yet.
According to some sources, the delay of the transaction due to the fact that SFR has initiated a review of its options due to the current fall in oil prices (they are price of LNG in Asian markets). The newspaper’s source, close to NOVATEK, disproves it. According to him, the negotiations are “constructive”, at the final stage, “and there is no sense to be tied to a specific date”.