Russia’s Lukoil gets $1-billion loan to expand gas project supplying Europe

By STEPHEN BIERMAN
Bloomberg

Lukoil, the Russian oil company with the most overseas assets, signed a $1 billion loan deal to fund the expansion of the BP-led Shah Deniz natural gas project in Azerbaijan.

The European Bank for Reconstruction & Development and the Asian Development Bank arranged two loans to help Lukoil’s finance its share of $28 billion project, according to a statement on Friday from the Russian producer.

The company has a 10% stake of Shah Deniz.

Thwarted by Gazprom’s pipeline monopoly from exporting its gas output, Lukoil has turned to its overseas units for access to world markets. The Caspian’s Shah Deniz project already supplies Turkey, while gas from Lukoil’s Uzbek projects is shipped to China.

The EBRD and ADB provided a 12-year, $560 million credit facility and helped arrange a $440 million, 10-year loan from a group comprised of ING Bank, Bank of China, UniCredit and Societe Generale, according to the statement.

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