Global law firm White & Case LLP has advised long-standing client, the European Bank for Reconstruction and Development (EBRD), on its US$87 million project financing for the construction and operation of a specialized gas processing plant in the Khanty-Mansiysk region in Russia. The new technology allows commercial utilization of associated petroleum gas, which is currently being widely burnt at source. It also offers a model for other oil and gas regions in Russia as producing companies race to meet the government’s gas flaring deadline of 1 January 2012.
The EBRD is advancing an eight-year “A” loan of US$55 million to UgraGas Processing, an independent Russian gas processing company, with a five-year “B” loan of US$32 million syndicated to Italy’s Unicredit group. The EBRD will remain the lender of record for the full amount of US$87 million.
“This project is the first of its kind in Russia, and has considerable environmental and commercial benefits,” said partner Marc Polonsky, who led the Firm’s work. He continues: “Projects like this can have a very positive impact on Russian business: they encourage private investment in the oil & gas sector, introduce valuable new technologies, and cut pollution. This is an important and innovative transaction for Russia, and we are very pleased to be involved with it.”
The Russian government has made a strong commitment to the reduction of flaring, by requiring that 95% of APG be processed by January 2012.
The deal was signed on 9 July 2010 in Moscow.
The White & Case LLP team was led by partner Marc Polonsky, and included banking and finance partners Irina Nesvetova and Maxim Kobzev, and associates Peter Kotelevtsev (Energy & Utilities), and Ekaterina Logvinova (Banking and Finance).
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