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Yamal Peninsula, the Tambey cluster of fields, which Gazprom has now identified as really one super-giant field, contains significant amounts of ‘wet’ gas with a high ethane content. This presents a problem for pipeline use – albeit not insurmountable – but separating out these liquids and selling them separately is a relatively easy part of the gas liquefaction process. Novatek’s Yamal LNG project, developing the geologically separate South Tambey field, is nearby, giving the company a base from which to relatively efficiently develop the Tambey cluster.
Novatek may pledge its 60% stake in Arctic LNG-2 as part of financing deal. A normal part of doing business: The information comes from materials prepared for Novatek’s AGM to be held on April 23rd, and relates to Novatek’s announced negotiations to attract c$11bn of financing for the c$21bn Arctic LNG-2 project from a consortium of Russian and foreign banks. By pledging its share of Arctic LNG-2 as collateral for the loan, Interfax reports, the lenders will have ‘limited recourse’ to Novatek itself and, we think, the cost of debt will be reduced from what it otherwise would have been.
Novatek’s Arctic LNG 2 joint venture is to receive project financing of $11bn, or 52% of the project’s capex, Kommersant reports.
The financing is to be provided by VEB, Sberbank and Gazprombank (together up to $5bn), as well as China Development Bank, The Export and Import Bank of China, Japan’s JBIC, Intesa Sanpaolo and Raiffeisen Bank International AG. These are the same banks that participated in the Yamal LNG financing. According to the paper, the share of Asian banks in overall financing will be lower for Arctic LNG 2 than it was for Yamal LNG.
70% of Yamal LNG was financed by debt financing, compared with 52% for Arctic LNG 2. Given Novatek’s 60% share in Arctic LNG 2, it might have to invest some $6bn of its own funds into the project’s capex.
The cash payment from other shareholders to Novatek accounted for $5.2bn in total, which will help to cover Novatek’s share of the project’s capex. Total capex for Arctic LNG 2 is estimated at $21.3bn. We treat the news as not market-moving for the name.
● Lukoil
Lukoil seeks further tax breaks for Caspian Sea field. Along with a previously publicized request for tax breaks on high-viscosity oil, Lukoil is asking for tax breaks for its Korchagin field in the Caspian Sea.
The request came in the form of a letter sent to Deputy Prime Minister Andrey Belousov from Lukoil CEO Vagit Alekperov. As the result of the
160 RUSSIA Country Report May 2021 www.intellinews.com