International sanctions have undermined the ability of Russia's Yamal LNG project to raise necessary funds but it will be launched as scheduled, Leonid Mikhelson, head of the plant's main shareholder, said in a televised interview on Tuesday.
The company, co-owned by Gennady Timchenko, an ally of President Vladimir Putin, was placed under U.S. sanctions in 2014, soon after the final investment decision had been taken on the Yamal project in late 2013.
The punitive measure makes it harder for the company, Novatek, to raise external debt.
"Of course, technical difficulties due to sectoral sanctions against Novatek and automatically against Yamal LNG ... there are difficulties with attracting credit financing," Mikhelson told the state-run Rossiya-24 TV channel.
Yamal LNG's total investments are seen at $27 billion.
Russia's Novatek holds 50.1 percent in Yamal LNG; France's Total and China's CNPC control 20 percent each; and China's Silk Road Fund bought a 9.9 percent stake for 1.09 billion euros ($1.2 billion) this month.
Shareholders have invested $13 billion, while around $2.4 billion was secured from Russia
's state National Wealth Fund, Mikhelson said.
The project has sought to raise external financing from Chinese banks and export credit agencies in Europe, but so far has failed to reach an agreement. Banks have been cautious in evaluating the project due to the sanctions and weak oil prices.
Mikhelson reiterated that he expected to sign deals with banks in the next two to three months, while the first tanker with liquefied natural gas would be shipped next year as planned.
Russia's state development bank
VEB has also pledged $3 billion in banking guarantees, while the country's Sberbank
and Gazprombank preliminarily agreed to provide $3 billion and $1 billion in loans, respectively.
Yevgeny Kot, head of Yamal LNG operations, said last week that 47 wells out of 58 essential for the first stage had been drilled. Yamal LNG is to consist of three lines, with combined annual capacity of 16.5 million tonnes of LNG.
"Around 15,500 workers are on the site - we expect them to reach up to 20,000 people from this summer," Kot said at a conference.
Mikhelson, Russia's richest man with wealth estimated by U.S. magazine Forbes at $14.4 billion, said the project would be active until 2045, while loans have a maturity of 15 years.
"Even by the most pessimistic valuations, the project is feasible," he said.
Tatiana Mitrova at Moscow's Energy Research Institute said it was hard to estimate possible costs for LNG transportation from the project, located beyond the Arctic circle.
According to her estimates, the Yamal LNG price for Europe may be around $5.2 per million British thermal units (mmBtu) and $7.9 per mmBtu in Asia, compared to May delivery in Asia at $4.50 per mmBtu currently.
($1 = 0.8930 euros)
(By Vladimir Soldatkin and Denis Pinchuk; Additional reporting by Katya Golubkova; Editing by Dale Hudson)