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    Arctic LNG-2 secures €9.5bn from banks

Summary

Russian, Chinese and Japanese lenders are among the financiers.

by: NGW

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Arctic LNG-2 secures €9.5bn from banks

The Arctic LNG-2 consortium developing a 20mn metric ton/year liquefaction plant in the Russian Arctic has secured some €9.5bn ($10.8bn) in external funding from domestic and international financiers, the group said on November 30.

The consortium led by Russian gas producer Novatek said that the 15-year facility meant the project's required external financing was now in place.  Chinese lenders including the China Development Bank and the Export-Import Bank of China have pledged up to €2.5bn, while institutions from OECD countries including Japan Bank for International Cooperation (JBIC) will contribute up to a further €2.5bn.

This adds to €4.5bn already promised by Russian lenders including Gazprombank, VEB.RF and Bank Otkritie.

Novatek and its partners took a final investment decision on Arctic LNG-2 back in 2019, confident that the project would be realised even though not all external financing was in place at that time. The Russian company completed its first Arctic LNG plant, Yamal LNG, two years earlier, ahead of schedule and under-budget.

The involvement of Chinese and Japanese lenders was expected, as Chinese oil firms CNPC and CNOOC each have a 10% stake in the project, while a joint venture between Japan's Mitsui and JOGMEC controls a further 10%.

Novatek operates the project with a 60% interest, while France's TotalEnergies has a further 10%. The first of Arctic LNG-2's three trains is due on stream in 2023.