Natural gas producer Novatek has signed an agreement to sell a 9.9% equity stake in the $27bn Yamal LNG project in Russia to China’s Silk Road Fund (SRF).
Under the agreement, SRF will provide a 15-year loan of about €730m to Novatek to finance the project which is currently at the active construction stage.
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Yamal LNG will involve construction of an LNG plant with three trains which will have total capacity of 16.5 million tonnes of LNG per year.
The project developed by JSC Yamal LNG will also involve construction of a seaport, airport as well as a power plant.
Novatek management board chairman Leonid Mikhelson said: "The signing of the binding agreements for the sale of an equity stake in Yamal LNG is another important step in the execution of our long-term development strategy.
"With the closure of this transaction we will achieve the appropriate target shareholder structure, which will contribute to the planned financing of the project and further facilitate its successful implementation."
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By GlobalDataSRF president Wang Yanzhi said: "We are pleased to sign the definitive agreements to enter the Yamal LNG project, which is progressing on schedule and is widely viewed as sustainable due to its high-quality conventional reserve base and long-term contracts for almost 100% of its sales volumes."
The closure of the transaction is subject to certain changes to the agreement between Russia and China.
The $40bn medium- to long-term investment and development fund SRF was established in Beijing in December 2014.
It makes outbound investment by acquiring equity stakes and providing debt financing.
Image: The Yamal LNG project will involve construction of an LNG plant with three trains. Photo: courtesy of NOVATEK
