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FSUOGM INVESTMENT FSUOGM

Arctic LNG-2 lines up $9.5bn

in international finance

RUSSIA RUSSIA’S $21bn Arctic LNG-2 export project project, and the document seen by Reuters states
is reportedly set to get $9.5bn in financing from that an unnamed Russian bank will potentially
Additional funds will international banks, with additional funding allocate $1.5bn.
come from Russian expected to come from domestic lenders. Novatek has previously said that $9-11bn of
lenders, while the Russian gas firm Novatek and its partners the needed financing for Arctic LNG-2 would
rest will come from took a final investment decision (FID) on the come from external sources, leaving its equity
the project's equity project a year ago, and construction is well partners to cover the rest. As of press time, none
partners. underway. The terminal’s three trains are due to of the lenders or project participants had con-
go online in 2023, 2024 and 2026, bringing its firmed the Reuters report.
output to 19.8mn tonnes per year (tpy). Arctic LNG-2 will be Novatek’s second liq-
The lender expected to offer the largest credit uefaction project to launch production. Its first,
facility, $5bn, is China Development Bank Yamal LNG, went on stream in December 2017
(CDB), according to a document seen by Reu- and is now producing 17mn tpy of super-cooled
ters. The Japan Bank for International Cooper- gas. The company has several other export devel-
ation (JBIC) is set to provide a $2.5bn facility, opments in the pipeline, but none of them have
while France’s Bpifrance is anticipated to allocate reached an FID yet. Novatek had hoped to sanc-
$700mn in credit finance. tion this year the 5mn tpy Obsk LNG scheme,
Novatek’s equity partners at Arctic LNG-2 which it plans to develop without partners, but
are French oil major Total, China’s CNPC and has delayed the move because of weak market
CNOOC and Japan’s Mitsui and JOGMEC, pro- conditions.
viding a rationale for these lenders’ involvement. Novatek earlier this month secured all the
Also in the line-up are Italy’s SACE, set to financing it needs to build a fleet of carriers to
provide $1bn, and Germany’s Euler Hermes ship Arctic LNG-2’s gas. The vessels will be con-
with a $300mn offering. In addition, Russian structed at the Zvezda shipyard in the Russian
state lender Sberbank said earlier this month it Far East and funded with loans from state devel-
was willing to lend over €2.7bn ($3.2bn) to the opment bank VEB.RF. ™

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