EBRD to allocate LUKOIL loan within framework of Azerbaijani gas project

Aug 04, 2015 12:00 AM

The EBRD will provide a syndicated loan to the Russian company LUKOIL for providing its share within the framework of the second stage of development of the gas condensate field Shah Deniz in the Azerbaijani sector of the Caspian Sea, said the message posted on the website of the bank.

The message said that the total amount of the loan is $1 billion, half of which will be provided in the form of a syndicated loan of the EBRD and the Asian Development Bank (ADB). “At present, preparations are underway for an agreement,” the message said.

LUKOIL has 10 percent stake in the Shah Deniz field development project. The total volume of additional funding of LUKOIL within the framework of the equity in the Shah Deniz 2 project is $3 billion.

The LUKOIL Overseas Shah Deniz company also plans to raise a loan from the ADB, which is ready to allocate $450 million to the company.

Of the total funds provided by the ADB loan, $250 million will be allocated at the rate of LIBOR, and the remaining $200 million will be provided by the scheme of additional funding.

Means of additional financing will be used to drill more than 20 subsea wells, construct two platforms, create subsea infrastructure, expand the Sangachal oil terminal and the South Caucasus gas pipeline.

As part of the implementation of the Shah Deniz projects, the annual gas production volume will increase from 9 billion cubic meters (within the first phase) by additional 16 billion cubic meters in the second phase. Two offshore platforms will be installed and over 20 subsea wells will be drilled to produce additional volumes of gas within the Shah Deniz-2 project.

As part of the second stage of the field’s development, gas will be exported to Turkey and European markets by expanding the South Caucasus gas pipeline and the construction of Trans-Anatolian (TANAP) and Trans-Adriatic (TAP) gas pipelines.

The contract for development of the Shah Deniz offshore field was signed on June 4, 1996. The field’s reserve is estimated at 1.2 trillion cubic meters of gas.

The shareholders are: BP, operator (28.8 percent), AzSD (10 percent), SGC Upstream (6.7 percent), Statoil (15.5 percent), Lukoil (10 percent), NICO (10 percent) and TPAO (19 percent).

The volume of gas produced at the Shah Deniz field stood at 9.9 billion cubic meters in 2014, while the volume of condensate production at this field totaled 2.3 million metric tons (18.7 million barrels), compared to 9.8 billion cubic meters of gas and 2.48 million metric tons of condensate (19.6 million barrels) in 2013.

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