MOSCOW: Russia’s Novatek finalized on Tuesday (Wednesday in Manila) a 1.09-billion-euro ($1.2-billion) deal to sell China’s Silk Road Fund a 9.9 percent stake in an Arctic natural gas project whose development has been complicated by Western sanctions against Moscow.
The deal concerning the equity stake in the Yamal LNG project had been discussed for months but this is the first time Novatek disclosed the transaction value.
Yamal LNG—which is set to be launched in 2017—is a liquefied natural gas plant with a planned capacity of 16.5 million tons a year and is valued at $27 billion. It is located in on the Yamal peninsula, an Arctic region of Siberia that is a key Russian oil and gas producing region.
The deal will see Novatek control 50.1 percent, with France’s Total holding 20 percent while China’s CNPC and Silk Road Fund hold 20 percent and 9.9 percent, respectively.
“Earlier in December 2015, as part of the transaction, Novatek received a 15-year loan from Silk Road Fund for the purpose of financing of the project,” Novatek said in a statement.
The loan was for 700 million euros, the company said at the time.
The Yamal project had been hit with difficulties after US sanctions against Moscow over Ukraine impacted Novatek.
France’s Economy Minister Emmanuel Macron said on a Moscow visit in January that Paris would like “guarantees” that Washington would not target French banks with sanctions in case they finance the project.