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Lukoil to borrow $200 mln from EBRD for Shah Deniz stage 1 financing

12 November 2013 15:23 (UTC+04:00)
Lukoil to borrow $200 mln from EBRD for Shah Deniz stage 1 financing

By Aynur Jafarova

Russia's Lukoil Company intends to attract $200 million from the European Bank of Reconstruction and Development (EBRD) for financing the development of giant Shah Deniz gas condensate field located in Azerbaijan's sector of the Caspian Sea.

"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," the EBRD said.

The borrower is Lukoil Overseas Shah Deniz Ltd, which is a 100-percent daughter company of Lukoil Overseas, operator of Lukoil's foreign projects.
Lukoil holds a ten-percent interest in the Shah Deniz development project.

"Financing is sought for the stage 1 extension of field development and implementation of the more advanced technologies, including the existing terminal and platform," the bank said.

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.

"The project will also support wider spread of private capital in the gas production sector in Azerbaijan," the EBRD said.

Lukoil Overseas is a holding company that manages Lukoil's participation in exploration and production projects outside Russia.

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 Shah Deniz field has proved to be a secure and r

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