The European Bank of Reconstruction and Development has decided to pull its funding for the $20-plus billion Sakhalin-2 liquefied natural gas project, located in Russia`s Far East, following Gazprom`s entrance into the Sakhalin Energy Investment consortium.
Since January, EBRD and the Sakhalin Energy shareholders -- Gazprom, Royal Dutch Shell, Mitsui and Mitsubishi -- have held talks over the project`s finance. EBRD cut off discussions in favor of financing other projects, such as those that promote sustainable energy, the bank said.
Sakhalin Energy is developing oil and gas resources in two fields off the eastern Russia island and hopes to commence LNG exports in 2008.
Late last year Shell and its partners sold a controlling stake in the project to Russian gas giant Gazprom. The project facilities include three offshore production platforms, two island-long pipelines, an oil tanker terminal and a liquefied natural gas plant.
This changed the structure of the operating company and its agreements with financial institutions.
'It has become clear that in the light of the timetable envisaged by the shareholders, the financing from ERBD is not feasible,' the ERBD said. 'Gazprom and the other shareholders have reached an advanced stage in the negotiations for the financing of Sakhalin II and now expect to reach financial closure in the next few months.'
Some of the other potential lenders, including Britain`s Export Credit Guarantee Department and the U.S. Export-Import Bank, are still awaiting a report from environmental consultants.
Since January, EBRD and the Sakhalin Energy shareholders -- Gazprom, Royal Dutch Shell, Mitsui and Mitsubishi -- have held talks over the project`s finance. EBRD cut off discussions in favor of financing other projects, such as those that promote sustainable energy, the bank said.
Sakhalin Energy is developing oil and gas resources in two fields off the eastern Russia island and hopes to commence LNG exports in 2008.
Late last year Shell and its partners sold a controlling stake in the project to Russian gas giant Gazprom. The project facilities include three offshore production platforms, two island-long pipelines, an oil tanker terminal and a liquefied natural gas plant.
This changed the structure of the operating company and its agreements with financial institutions.
'It has become clear that in the light of the timetable envisaged by the shareholders, the financing from ERBD is not feasible,' the ERBD said. 'Gazprom and the other shareholders have reached an advanced stage in the negotiations for the financing of Sakhalin II and now expect to reach financial closure in the next few months.'
Some of the other potential lenders, including Britain`s Export Credit Guarantee Department and the U.S. Export-Import Bank, are still awaiting a report from environmental consultants.
Via: Monster & Critic
by Andrea Mihailescu
by Andrea Mihailescu
