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. Last Updated: 07/27/2016

EBRD Will Not Finance Sakhalin-2

LONDON -- The European Bank for Reconstruction and Development said Tuesday that it would not resume talks on financing Sakhalin-2, the world's largest liquefied natural gas project.

The decision was unlikely to have any effect on the implementation of the project. The EBRD had reportedly been considering a loan of $300 million to the project -- a small portion of the $20 billion it is expected to cost overall.

The bank said the decision had been made with Gazprom and other shareholders of the Sakhalin Energy Investment Company.

The EBRD said in January that it would no longer consider investing in the project after Gazprom became majority owner, but it had said at the time that it would remain open to discussing future involvement.

"The EBRD withdrew from active consideration of the project in January because there was a significant change of shareholding of SEIC and the new shareholders were reviewing financing plans," the bank said in a statement.

"In informal discussions with the EBRD since then, it became clear that in light of the timetable envisaged by the shareholders, the financing from the EBRD was not feasible."

Gazprom took the majority stake in SEIC from Shell at the end of 2006. The other shareholders in the project are Japan's Mitsui and Mitsubishi.

(Reuters, AP)