Gazprom will soon receive syndicated loan for Blue Stream project
A European banking syndicate is expected to extend a euro-denominated credit to Gazprom in the first quarter of this
year. The Russian natural gas monopoly will have to repay the loan, worth 250 mm euros, in five years.
Company managers have said that Gazprom will use proceeds from its gas exports to make payments on the credit, which has been fully underwritten. The company will be permitted to make the payments directly out of a special offshore account.
The credit will carry an interest rate of Euribor plus 350 bnp, and the lending syndicate will be led by HypoVereinsbank. The deal will mark Gazprom's debut on the euro-denominated borrowing market as well as its first foray into the commercial loan sector since the Russian economic crisis erupted in August of 1998.
Gazprom plans to use the loan to fund work on the last stage of the Goluboi Potok (Blue Stream) gas pipeline project. The Russian company is building the pipeline from Izobilnoye to Samsun, beneath the bed of the Black Sea,in order to boost gas deliveries to Turkey. It expects to complete the pipe before the end of this year, but company managers say the Blue Stream conduit will not begin operating at its full capacity of 16 bn cmpy of gas before 2002 or 2003 at the earliest.