EBRD OKs loan for Shah Deniz development
By Aynur Jafarova
The European Bank for Reconstruction and Development (EBRD) has approved a loan worth $200 million for Russia's Lukoil Overseas Shah Deniz Ltd for financing the development of giant Shah Deniz gas condensate field located in Azerbaijan's sector of the Caspian Sea.
The loan was approved by the Board on January 15, the EBRD said on January 22.
The proposed financing is a pre-planned increase to the existing exposure of the bank to the Lukoil Overseas Shah Deniz Ltd relating to the development of the off-shore Shah Deniz gas and condensate field in Azerbaijan.
Financing is sought for the first stage extension of field development and implementation of the more advanced technologies, including the existing terminal and platform.
The total cost of expenditures on the first stage of the Shah Deniz field development project is estimated at $2.128 billion. Lukoil's share in the projects will amount to $212.8 million.
Lukoil Overseas Shah Deniz Ltd is a 100-percent daughter company of Lukoil Overseas, a holding company that manages Lukoil's participation in exploration and production projects outside Russia.
Lukoil holds a ten-percent interest in the Shah Deniz development project.
The Shah Deniz field was discovered in 1999. It is one of the world's largest gas-condensate fields. The reserves are estimated at 1.2 trillion cubic meters of gas.
The Shah Deniz Stage 1 was launched in 2006. It has the capacity to produce about 9 billion cubic meters of gas per year and approximately 50,000 barrels a day of condensate.
Shah Deniz is operated by the London-based BP. The partners include SOCAR, Statoil, Total, Lukoil, NICO and TPAO. BP and Shah Deniz partners have invested $6 billion in Shah Deniz Stage 1 up to date.
The EBRD invests in the enterprise, financial and infrastructure sectors to promote sustainable growth in Azerbaijan.
Since the start of its operations in the country, the EBRD has invested around $ 2 billion in about 137 projects, with over 90 percent of these projects investing in the development of the private sector. Around 73 transactions with a total value of approximately $540 million have been signed with financial institutions in Azerbaijan.