The China National Petroleum Company is taking on a key role in the development of the major Arctic gas project as it commits itself to buy an annual 3 million tons of Yamal LNG. From before, the company owns a 20 percent stake in the project.
The agreement was signed during Russian President Vladimir Putin’s visit to Shanghai this week. Signed was also an agreement between Novatek and the China Development Bank, according to which the financial institution will facilitate project financing on ”the best possible conditions by the fourth quarter of 2014”, a press release from Novatek reads. The CDB will also coordinate relations with other Chinese financial institutions and do ”whatever it can” to generate the necessary project financing for the next 15 years.
With the investments in the Yamal LNG, Chinese interests are getting a firm foothold in the Russian Arctic.
The Yamal agreements come on the backdrop of strained relations between Moscow and the countries in the EU. As previously reported, European banks increasinly show reluctance to particpate in the Yamal LNG project following the crisis in Ukraine. That could lead to delays in project development, leader of project partner Total, Chistophe de Margerie said this week.
The Russian-Chinese agreements on the Yamal LNG project were among a total of 46 bilateral agreements signed during Putin’s visit.