Russia’s Lukoil may take $1 bln loan to build Uzbek gas plant

MOSCOW, Jun 23 (PRIME) -- Russian oil major Lukoil is considering an over U.S. $1 billion loan for over 10 years for construction of a gas processing plant in Uzbekistan, Senior Vice President for Finance Alexander Matytsyn said in an interview to Rossiya 24 TV channel on Thursday.

“If the company borrows money, I would say that it will be quasi project financing for implementation of a company’s foreign project in Uzbekistan, where Lukoil plans to invest a large volume of funds to construct a gas processing plant, which will increase effectiveness of the Uzbek project significantly,” Matytsyn said.

“The project is estimated at over $2 billion. And while Korean contractor Hyundai Engineering participates in it, we expect that this loan will be provided under guarantees of Korean export credit agencies, including the Korea Eximbank, which will allow us to create better conditions for financing, because the cost of the loan will be lower with such guarantees.”

In 2014, Lukoil, the government of Uzbekistan and state-run oil and gas company Uzbekneftegaz signed a production sharing agreement for 35 years to develop the Kandym gas deposits, as well the Khauzak and Shady fields and geological exploration at the Kungrad block. In 2014, the agreement was prolonged till 2046.

In May, Lukoil and the government of Uzbekistan signed a supplement agreement which introduces amendments to the economic terms of the production sharing agreement which will provide more favorable conditions for a consortium comprising Lukoil and Uzbekneftegaz.

In April, Lukoil started construction of a gas processing plant with a capacity of 8.1 billion cubic meters of gas annually under a project of development of the Kadym fields. The first line of the plant is likely to be launched in 2018. The total investment in the first stage of the project is estimated at $3.3 billion.

End