Russian gas producer Novatek has signed a framework agreement with China’s $40bn infrastructure fund, Silk Road Fund (SRF), for selling a 9.9% equity stake in the Yamal liquefied natural gas (LNG) project.
Last week, Russian business newspaper Kommersant reported on the potential sale of the stake, currently valued at $1.4bn.
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The deal, which is subject to stipulated conditions, is expected to be closed after receipt of necessary approvals.
Once the transaction is closed, Novatek will own 50.1% of the LNG project, with Total and CNPC each retaining their 20% interest, and SRF holding the remaining 9.9%.
While CNPC had bought its stake in the project for nearly $1bn in 2013, French Total gained its share for $425m in 2011.
Novatek management board chairman Leonid V Mikhelson said: "We welcome SRF’s entrance into the Yamal LNG project as another step forward in the mutually beneficial cooperation with our Chinese partners in the development of gas projects in the Russian Arctic region."
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By GlobalDataSRF president Wang Yanzhi said: "We hope our entrance into the project will facilitate an expedited closing of the project’s general external financing, as well as contribute to further development of the Chinese-Russian cooperation in the energy sector."
LNG shipping from the project has been scheduled to start in 2017. The facility is expected to hit its peak production of 16.5 million tonnes a year in 2021.
Image: Yamal LNG project. Photo: courtesy of Novatek.
