UPDATE: Novatek CFO says Yamal LNG 1st stage ready by 94%

MOSCOW, Jul 27 (PRIME) -- The first stage of Russia’s Yamal LNG liquefied natural gas plant is 94% ready and the entire project is 85% complete, independent gas producer Novatek CFO Mark Gyetvay said in a presentation seen by PRIME on Thursday.

Novatek Deputy CEO Denis Khramov said earlier that the launch of the plant’s first stage is scheduled for the second half of 2017.

The Yamal LNG project envisages construction of a 16.5-million-tonne LNG plant on the basis of the Yuzhno-Tambeiskoye field on the Yamal Peninsula. Novatek holds 50.1% in the project, France’s Total has 20%, China’s CNPC owns 20% and China’s Silk Road Fund holds 9.9%.

The earlier than expected launch of the project will help it negotiate an early repayment of shareholder loans, Gyetvay said during a conference call.

On Monday, Novatek CEO Leonid Mikhelson said that Novatek may launch the second line three months ahead of plan and the third six to nine months earlier.

“The earlier launch of the second and third stages allows us to discuss the possibility of earlier redemptions of shareholder loans with banks that provided project financing…We will start redemption of the shareholder loans in 2019,” Gyetvay said.

“It was not included in the financial model that presented to banks. We should expect that they will receive additional funds faster allowing for payments to the shareholders. We have a project financing schedule of payments, and we will take into account the start of redemptions, we will be able to start payments to shareholders by 2019.”

The project’s budget stands at U.S. $27 billion, with project financing reaching $19 billion. Yamal LNG attracted 3.6 billion euros worth of credit lines from Sberbank and Gazprombank, 9.3 billion euro and 9.8 billion Chinese yuan credit lines from the China Development Bank and the Export-Import Bank of China, a 750 million euro financing of Intesa Sanpaolo secured by Italian export credit agency SACE and French export credit agency COFACE, and a 200 million euro financing from Japan’s JBIC.

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