Sakhalin-2 loan secured; year-round flow to begin
JBIC and four private-sector banks are finalizing plans to provide a $5.3 billion loan for the Sakhalin-2 oil and natural gas development project.
LOS ANGELES, June 5 -- The Japan Bank for International Cooperation (JBIC) and four private-sector banks are finalizing plans to provide a $5.3 billion loan for the Sakhalin-2 oil and natural gas development project.
Japan's Nikkei newspaper reported that JBIC will lend about $3.7 billion, with Bank of Tokyo-Mitsubishi UFJ, Mizuho Corporate Bank, Sumitomo Mitsui Banking Corp., and BNP Paribas providing the remaining $1.6 billion.
The financial institutions are scheduled to sign a lending agreement with Russia's OAO Gazprom as early as June 15. Gazprom partners, Royal Dutch Shell PLC, Mitsui & Co., and Mitsubishi Corp. have already committed about $15 billion to the project.
JBIC and the three major Japanese banks plan to offer financing for the project to support efforts by Japan's public and private sectors to obtain a stable source of energy, the paper said.
The financing announcement followed reports last month that year-round production will begin from the Sakhalin-2 project this summer.
"The current plan is to start year-round production in the second half of 2008, after commissioning and testing of the pipeline has finished," said Ivan Chernyakovsky, a spokesman for the consortium.
Oil will then be transported along the 800-km pipeline to an ice-free export terminal on Sakhalin Island's southern tip. The project produces 80,000 b/d of oil.
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