China to Invest in Siberia LNG

China to Invest in Siberia LNG
China to Invest in Siberia LNG

Russia's largest independent natural gas producer Novatek is in talks with Chinese banks to get over $10 billion for its Yamal liquefied natural gas (LNG) project, according to the company’s key owner Gennady Timchenko, RIA Novosti reported.

"Given the situation with the sanctions, we will work tightly with Chinese banks. Negotiations are in full swing, it is necessary to agree on conditions," Timchenko said on Friday. He added the total investment of Chinese banks is expected to be over $10 billion, but everything can change.

Timchenko said the issue will be discussed in detail during the forthcoming visit of Russian President Vladimir Putin to China.

Novatek is negotiating with various Chinese and Indian companies over the sale of a 9 percent stake in the Yamal LNG project, says Timchenko. The Yamal project includes the construction of a plant capable of producing 16.5 million tons of LNG per year. The deposit located in the Northeast Siberian Yamal peninsula has potential gas reserves of more than 900 billion cubic meters.

The total cost of the project is $26.9 billion. The first stage of the plant is expected to be opened by 2017. It is planned to be developed in three stages. Yamal LNG is a joint project of Novatek with a 60 percent share, Chinese petroleum corporation CNPC with 20 percent, and France’s Total with 20 percent.