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Japan banks set to extend loans to Sakhalin-2 project

Reuters

Japan banks set to extend loans to Sakhalin-2 project

Tue Jun 3, 2008 12:05am EDT

TOKYO, June 3 (Reuters) – The state-run Japan Bank for International Cooperation and four private banks are in final talks to co-finance loans to back the Sakhalin-2 liquefied natural gas project, the JBIC said on Tuesday.

 

The Nikkei business daily said the banks were likely to extend about $5.3 billion in loans for the project, one of the world’s largest LNG plants on Russia’s Pacific island of Sakhalin.

JBIC is likely to lend about $3.7 billion to Sakhalin Energy, the project’s operating group led by Russian gas giant Gazprom (GAZP.MM: QuoteProfileResearch), with the remainder set to be provided by Bank of Tokyo-Mitsubishi UFJ, Mizuho Corporate Bank, Sumitomo Mitsui Banking Corp and French bank BNP Paribas, the Nikkei said.

The banks may sign the loan agreement in mid-June, it added.

Sakhalin Energy has been in talks with lenders and plans to conclude financing by the first half of this year.

A JBIC spokesman said no formal decision on the loans has been made yet.

The Sakhalin-2 project is controlled by Russian gas export monopoly Gazprom, with Shell (RDSa.L: QuoteProfile,Research), Mitsui & Co (8031.T: QuoteProfileResearch) and Mitsubishi Corp (8058.T: QuoteProfileResearch) also involved.

Sakhalin Energy has said its largest lender will continue to be JBIC, which aims to ensure stable energy supplies to Japan, the world’s third-biggest oil consumer.

Sakhalin Energy is investing $22 billion in the project, which is set to start LNG production after construction finishes late this year. (Reporting by Osamu Tsukimori; Editing by Hugh Lawson)

 

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