Chinese credits are not very attractive for Yamal LNG

Novatek may face difficulties in the financing of its largest project the Yamal LNG plant. Currently, the company invests its own funds into the project, but in the first six months of 2016 it will have to pay almost 100 billion rubles of debt and dividends. Novatek has already tightened up with the attraction of loans, trying to get better terms than were offered by its main partners - the Chinese banks. But according to the source of the Kommersant on the market, now the company is facing a fierce need to close the transaction.

Yesterday, the Russian Energy Minister, Alexander Novak discussed with his French counterpart Segolene Royale the opportunity to accelerate the financing of the Novatek’s project Yamal LNG. The Russian Minister said that "the project is implemented as scheduled" and it was expected that "by the end of 2017, the first stage will be launched". According to the Kommersant’s interlocutors on the market, Novatek, which can’t raise funds in US dollars because of the sanctions, expects to receive more money from European export credit agencies, as these loans will be cheaper than the Chinese banks’ ones. The total cost of Yamal LNG makes up $27 billion, $10 billion has been invested to date. Since the beginning of the year, Novatek spent 17 billion rubles on it, and in the third quarter it provided a loan in the amount of 245 million euro (in the first nine months - 482 million euro under 4.46 % per annum).