MOSCOW, June 10 (UPI) -- The leader of a Russian liquefied natural gas project targeting the Asia-Pacific market said it received its first tranche of a loan from national lenders.
Two Russian lenders delivered $1.13 billion for the Yamal LNG project. Novatek, the largest private natural gas company in Russia, leads the project aimed at sourcing the markets in the Asian-Pacific. The funding is part of a broader finance effort steered from the Russian National Wealth Fund with help from Chinese banks.
Yamal LNG CEO Evgeny Kot was quoted by Russian news agency Itar-TASS as saying some tankers were already tested for LNG deliveries and the funding should help spur further developments.
"Readiness of the first stage of the LNG plant is over 70 percent," he said.
Russia's economy is hobbled by dual strains of economic sanctions related to crises in Ukraine and the low price of crude oil. Liquefied natural gas, meanwhile, offers for maneuverability outside the geopolitical constraints associated with conventional pipeline arteries, like those running to Europe through Ukraine.
In a market characterized by tight spending trends, Novatek said the costs of development are low enough to compensate for higher maritime shipping costs to the Asian-Pacific markets.
Novatek controls 60 percent of the Yamal LNG project in the arctic north of Russia, alongside French energy company Total and the China National Petroleum Corp.
The Yamal LNG project has the capacity to produce about 16.5 million tons of natural gas and exports could target consumers in the Far East. As many as 16 ice-class carriers will be designated to ship LNG year-round to global consumers.
Yamal could start full operations as early as next year.