OREANDA-NEWS. The French state will bear some of the risk of financing the multi-billion dollar 16.5mn t/yr Yamal LNG project in Russia with main stakeholder Russian independent gas producer Novatek unable to raise US dollar financing because of US sanctions, French credit agency Coface said.

Coface is commissioned by the French state to manage its account for financing the project.

Financing for Yamal has faced issues since Novatek, which has a 60pc stake in the project, was placed on a US sanctions list last year. "The main consequence of the sanctions is that the project will not be able to raise US dollar financing. So basically, the financing will be delayed," Total chief financial officer Patrick de la Chevardiere said in October last year.

Total is looking for \$10bn-15bn in yuan equivalent from Chinese banks. And, as well as the French state, further financing will come from Russia's sovereign wealth fund, Russian banks, Italian credit agency Sace and potentially other credit agencies in Germany, Japan and South Korea, Total said.

Italy's Sace could not be reached for comment.

Total said on 9 June that it plans to have financing secured before the end of this year while Total chief executive Patrick Pouyanne said last week that project financing would be in place by mid-year.

Around \$9bn had been spent on the \$27bn project by late last month.

Total has a 20pc stake in the Yamal LNG project while French gas company Engie, formally GDF Suez, signed a 23-year contract with Novatek to receive 1mn t/yr of LNG from the project at the beginning of June.

French engineering firm Technip, along with Japanese firms JGC and Chiyoda, signed the final and full engineering procurement and construction contract for the Yamal LNG project last year.

Yamal LNG remains on schedule, Pouyanne said last week. Developers plan to commission its first 5.5mn t/yr LNG train in 2017 and reach full capacity in 2019.