Novatek and Sinopeec: report comes true

Novatek is close to signing an agreement with Sinopec on its  joining  the Yamal-LNG project. Today Novatek owns 80% in the project and French Total has 20%. As the Russian company will keep the controlling stake, the maximum share, which Sinopec may buy, will be 29%. Its value, as to make an analogy with the deal with Total, is about $600-700 million.

It is supposed that as with Total, the new partner will participate in the project financing. The amount of investment into the development of the South-Tambei field, which gas will become the resource base for the Yamal LNG and the construction of three lines of the LNG plant (capacity of each will make up 5 million tons) are estimated at $20 billion. It is assumed that $3 billion must be received from shareholders of the Yamal LNG in the form of participation in authorized capital and $6-7 billion as loans. It’s planned to additionally attract $7-8 billion due to project financing and $2 billion more due cash flows from the first phase of the project.