OREANDA-NEWS. A consortium of investors, made up of Gazprombank, the Russian Direct Investment Fund (RDIF) and a group of foreign investors has come to an agreement on terms of an investment into a liquefied petroleum gas (LPG) and light oil products transshipment terminal. This terminal is owned by the Russian petrochemical holding, SIBUR, in the sea port of Ust-Luga. The transaction amount of the investment is over USD 700 mln.

As part of the transaction, the consortium will gain complete control over the terminal, which is not only the largest in the CIS but also the only LPG transshipment terminal in the Russian North-West. It is also one of the most modern port infrastructure facilities on the Baltic Sea. The consortium's investment will allow the terminal to optimize its capital structure and expand its capacity for both LPG and the wide range of light oil products it processes.

Construction of the terminal and the necessary rail and port infrastructure in Ust-Luga was completed by SIBUR in 2013. Currently the terminal operates at a nominal transshipment capacity of 1.5 million mt/year of LPG and 2.5 million mt/year of light oil products. Simultaneously, the terminal is undergoing optimization of operational processes and expansion plans for all products transshipped at the terminal are currently in development. The terminal is a project of national importance and was constructed as part of the federal program for development of port capacities in the Russian North-West.

According to the agreement, SIBUR will have exclusive rights to utilize 100% of the LPG transshipment capacity on the pre-agreed terms. A joint venture between the investment consortium and SIBUR will compromise the operational management of the complex, which will retain all current staff.

The transaction will be closed after regulatory approvals are received.

"Investment in Russian infrastructure is a core area of Gazprombank's activity. The LPG and light oil products terminal in Ust-Luga is an attractive investment opportunity due to its fundamental competitive advantages and significant potential for value appreciation in future”, said Alexey Matveev, Deputy Chairman of the Board, Gazprombank.

"A modern LPG terminal in the Baltic Sea is a crucial step in the future development of Russian infrastructure. This latest development has a significant role to play in reducing domestic dependence on foreign ports as well as responding to the growing European consumer demand for LPG and light oil products. This transaction is a key milestone for the Russian infrastructure sector and is in line with RDIF's strategy to invest in infrastructure assets. This allows the RDIF to gain attractive returns while the company can concentrate on its main business", said Kirill Dmitriev, CEO of RDIF.

"Construction of the terminal in the port of Ust-Luga has created an effective transportation route for Russian LPG and light oil products to Northern and North-Western European markets. Thus, we have not only managed to gain access to new, previously inaccessible markets, but has also decreased Russia's dependence on foreign port infrastructure. As a result of the deal SIBUR returns its investment in the project while gaining long-term guarantees on capacity utilization in return. This will allow us to then expand our investments in other, more specialized core business projects in the sphere of byproducts of oil and gas monetization along with the manufacturing of a wide range of petrochemical products for Russian consumers", said Dmitry Konov, CEO of SIBUR.