Mikhelson: Yamal LNG has already signed LNG shipment contracts totalling 600bn RUB.

Key Yamal LNG clients are APR countries, accounting for 86% of all contracts signed

The amount of signed LNG shipment contracts with Yamal LNG exceeds 600bn RUB, further extensible, as informed by Leonid Mikhelson, Novatek CEO.

“Yamal LNG has signed contracts totalling 600bn RUB, and we intend to boost the amount rapidly”, – he said to Dmitry Medvedev. Medvedev replied: “As far as I know, the majority of these contracts is associated with Russian manufacturers’ shipments”.

Mikhelson has also reported that the amount of investment needed for the construction of Arctic LNG 2 may be 30% lower than Novatek’s Yamal LNG $27bn worth.

“27bn [USD] of capital investment in Yamal LNG. But due to the new solutions, we expect 30% cost cutting [of the Arctic LNG 2 project]”, – he said answering Dmitry Medvedev’s question regarding the cost of the Arctic LNG 2 project.

Head of Novatek has also reported on the progress of Yamal LNG, another LNG project. He said that a number of European banks intend to join financing in the next 2 months.

“We have signed the limit of financing with banks as of $19bn (in equivalent – Editor’s note), and the limit is completely closed out. But we are applying for the limit reduction in several financial institutions, as there are other volunteers to enter the financing pool, who are about to join the next couple of months. A number of banks from European countries holding shares in the project will join financing”, – he noted.

“Those are large-scale projects involving a huge amount of people. A good thing is that new hi-tech employment opportunities are being created. And as to cooperation, it totals dozens thousands of employment opportunities, which represents a considerable effect from the projects”, – Medvedev said.

The Prime Minister has highlighted that in addition to new job opportunities, the crucial thing is the creation of new competences or recovery of lost competences both in shipbuilding, and engineering in general. “Which is extremely important in this country”, – he emphasized.

As previously reported, Novatek intends to attract more credit organizations possible from various countries to Yamal LNG financing. The latest loans from the German Hermes and the Export Agency of Sweden were involved by means of Chinese banks’ drawdown reduction.

The project is already co-funded by Japanese JBIC, European Intesa, French Coface, and Italian SACE.

Chinese banks joined Yamal LNG financing after Sergey Ivanov, Special Presidential Envoy for Environmental Activity, Ecology and Transport, visited Beijing in the late March.

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