![LUKoil signed credit agreement to fund the Shah Deniz 2 project](https://turan.az/resized/media/2015/main/081000125599-750-500-resize.webp)
LUKoil signed credit agreement to fund the Shah Deniz 2 project
The credit agreement to fund investments of LUKoil company in the project for development of the gas condensate field Shah Deniz Phase took place in Mariott Absheron hotel on August 7, 2015.
The Russian company has borrowed a syndicated credit worth $1 billion. $470 million has been allotted by the European Bank for Reconstruction and Development (EBRD) and Asian Development Bank (ADB) each and another $60 million has been allotted by the Black Sea Bank for Trade and Development.
As Turan has found out, $500 million out of the allotted funds are credits of the international financial institutions (EBRD and ADB) and they have 50% share each ($250 million each). The remaining $440 million is the syndicated credit.
The partners of the syndicated credit include French Societe Generale Bank, Bank of China, Dutch ING and Italian UniCredit.
EBRD and ADB have allotted a credit for the period of 12 years and the commercial banks for 10 years. Sergei Suchok, LUKoil Overseas Vice President, said at the credit agreement signing ceremony that this is the biggest foreign credit of the company for the projects for the energy resources extraction.
“This is of a significant importance for LUKoil Overseas, because our company has joined the Shah Deniz project from the day one. This is the company’s first foreign asset,” Suchok added.
LUKoil reported that the peak gas production volume of 26 billion cub.m. from the Shah Deniz field will be achieved in 2022 and will last till 2026.
Last year 9.9 billion cub.m. of gas and 2.38 million tons of condensate was extracted on Shah Deniz last year.
* The contract for the Shah Deniz exploration project was signed in Baku on June 4, 1996 and ratified by the Milli Mejlis on October 17, 1996. The gas condensate field was discovered in June 1999. The field development started at the end of 2006. Export of gas from the field to Turkey started in July 2007. Since that time over 60 billion cub.m. of gas and 15 million tons of condensate was extracted from the field.
In December 2013 the Azerbaijani government authorized the Shah Deniz Phase 2 project worth $28 billion. Annual volume of production is expected to be 16 billion cub.m., of which 10 billion cub.m. will be exported to Europe and 6 billion cub.m. to Turkey.
At present the Shah Deniz project partners include BP (operator with 28.8%), TPAO (19%), Petronas (15.5%), SOCAR (10%), LUKoil(10%), NICO (10%) and SGC JS Co. (Azerbaijan – 6.7%).—0--
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