LUKoil in Baku Signs Loan Agreement worth $ 1 Billion to Finance Shahdeniz-2

Today at the Mariott Absheron hotel in Baku a loan agreement was signed to finance the investment of the company LUKoil in the project Phase-2 for the development of the gas condensate field Shah Deniz.

The Russian company has attracted a syndicated loan of $ 1 billion $ 470 million granted by the European Bank for Reconstruction and Development (EBRD) and the Asian Development Bank (ADB), another $ 60 million – by Black Sea Trade and Development Bank.

As Turan found, from the allocated funds $ 500 million are direct loans from international financial institutions (EBRD and ADB), and the proportion is 50 to 50 (in $ 250 million). The remaining $ 440 million is a syndicated loan.

Participants of the syndication are the French bank Societe Generale, the Bank of China, the Dutch ING and the Italian UniCredit.

EBRD and ADB will provide a loan for 12 years, and the commercial banks for 10 years.

As the Vice-president of the mining company LUKoil Overseas Sergei Suchok said at the ceremony of signing the loan agreement, the loan is the largest in the history of the involvement of external financing of projects for the extraction of energy resources.

"For LUKoil Overseas this event is of great importance, since our company has been involved in the project Shah Deniz from the very outset. This is the first foreign asset of the company," Suchok said.

According to the company LUKoil, peak gas production of 26 billion cubic meters from the Shah Deniz field will be reached in 2022 and will last till 2026 inclusive.

Note that last year Shah Deniz produced 9.9 billion cubic meters of gas and 2.38 million tons of condensate.

* The contract for the exploration project Shah Deniz was signed in Baku on 4 June 1996 and ratified by Milli Majlis on October 17 of the same year. In June 1999, gas and condensate were discovered in the field. The development of the field began in late 2006. Export of gas from the field to Turkey began in July 2007. Since then, the field has removed more than 60 billion cubic meters of gas and 15 million tons of condensate.

In December 2013 the Government of Azerbaijan authorized the project Phase-2 worth $ 28 billion. The annual output of 16 billion cubic meters is expected, of which 10 billion will be sent to Europe and 6 billion to Turkey.

At present, the project Shah Deniz includes BP (operator, 28.8%), TPAO (19%), Petronas (15.5%), SOCAR (10%), LUKoil (10%), NICO (10%) and SGC JS Co (Azerbaijan – 6.7%). -12C--