Russia's natural gas producer Novatek and its partner have signed over $12bn loan agreements with Chinese banks to fund the development of the $27bn Yamal LNG project in Russia.
Located near Sabetta in the Yamal peninsula in Russia, the project secured 15-year credit lines facilities of $10.58bn and $1.5bn from the Export-Import Bank of China and the China Development Bank, respectively.
Yamal LNG general director Evgeniy Kot said: "The project is progressing in accordance with the approved schedule. With the first train of the LNG plant 65% complete we are currently at the most intensive phase of construction and assembly works.
"Agreements with the Chinese banks allow to complete the project without additional funding by the shareholders."
The project recently signed a €3.6bn ($4.1bn) loan agreements with Russia’s Sberbank and Gazprombank following signing of a $2.3bn financing deal with the National Wealth Fund in 2015.
The financing will be used to help the Yamal LNG project to commence gas production in 2017.
The Yamal LNG project involves construction of a 16.5 million tons per annum LNG plant with three trains on the base of the hydrocarbon resources of the South-Tambeyskoye field.
Expected to reach full capacity by 2021, the project also includes construction of a processing facility for gas and condensate treatment, a gas transmission pipeline, well sites, a gas gathering system, a sea port at Sabetta and a fleet of tankers for LNG transportation.
Novatek owns 50.1% interest in the project while other partners include Total with 20% stake and the Chinese state-owned oil and gas firm China National Petroleum (CNPC) with 20%. The remaining 9.9% is owned by Silk Road Fund.
Image: The $27bn Yamal LNG project involves construction of an LNG plant. Photo: courtesy of NOVATEK.