MOSCOW, Nov 30 (Reuters) - Russian gas producer Novatek (NVTK.MM) said on Tuesday its Arctic LNG 2 plant has signed loan agreements with foreign and Russian banks worth 9.5 billion euros ($10.8 billion), securing necessary external financing for the project.
Earlier this year, Novatek shareholders approved external financing of $11 billion for the $21 billion Arctic project, which is expected to start production of liquefied natural gas in 2023.
Novatek has had difficulty in securing funds from Europe, wary of political standoff with Russia as well as calls against tapping hydrocarbons in the Arctic amid efforts to tackle climate change.
Novatek said that Chinese financial institutions, including the China Development Bank and the Export-Import Bank of China, signed credit facility agreements totalling 2.5 billion eurosfor up to 15 years.
Financial institutions from the OECD member countries signed credit facility agreements totaling up to 2.5 billion euro. This includes the Japan Bank for International Cooperation (JBIC) and other lenders insured by export credit agencies.
It has not disclosed the other international lenders involved in the deal. Sources told Reuters earlier this month that Italy's SACE may insure a loan of around 500 million euros for Arctic LNG 2. read more
The financing to be provided by the syndicate of Russian banks including Sberbank (SBER.MM), Gazprombank (GZPRI.MM) and its subsidiary Bank GPB International S.A., State Development Corporation VEB.RF and Bank Otkritie Financial Corporation, will total 4.5 billion euros under the credit facility agreement, which had been signed earlier.
Arctic LNG 2 is expected to be launched in 2023 and reach full LNG production capacity of almost 20 million tonnes a year in 2026.
($1 = 0.8805 euros)
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