Akin Gump Advises LUKOIL on $1 Billion Shah Deniz II Project Financing in Azerbaijan
(London) – Akin Gump has advised PJSC LUKOIL on a project financing of up to $1 billion to finance further development of the Shah Deniz gas field (Phase 2) in the South Caspian Sea in Azerbaijan. The transaction was signed on August 7 in Baku.
The deal is being financed by the European Bank of Reconstruction & Development (EBRD) and the Asian Development Bank (ADB), which are providing direct financing of up to $250 million each, while Black Sea Trade and Development Bank is providing up to $60 million. In addition, up to $440 million of the financing will be provided by commercial lenders, including Bank of China, London Branch, ING Bank N.V., Société Générale and Unicredit Bank Austria AG, through a B loan facility with EBRD and ADB.
Proceeds from the loan will be used to finance the development of the Shah Deniz field, with the intention to significantly increase production, which will feed a southern transportation corridor through Georgia and Turkey for delivery to Greece, Bulgaria and Italy. The loan will be provided to LUKOIL Overseas Shah Deniz Limited, which owns a 10 percent interest in the Shah Deniz project.
PJSC LUKOIL is Russia’s second-largest oil and gas company in terms of reserves and the largest Russian oil business group, with annual sales of over $140 billion. It was the first Russian company to receive full listing on the London Stock Exchange.
Akin Gump London finance partner Robert Aulsebrook led the team with Moscow corporate partner Natalia Baratiants. They were supported by counsel and associates from across the firm’s London, Moscow, Washington, D.C. and Abu Dhabi offices.
Founded in 1945, Akin Gump Strauss Hauer & Feld LLP, a leading international law firm, numbers more than 900 lawyers and advisors in the United States, Europe, Asia and the Middle East.