OREANDA-NEWS. September 19, 2013. Novatek has secured preliminary backing from leading Chinese banks for its Yamal LNG project, bringing Russia's largest independent gas producer a step closer to breaking Gazprom's export monopoly.

With the global trade in liquefied natural gas (LNG) expected to grow by a third in the next five years as the United States and Australia boost production, Russia is under pressure to complete new projects.

The USD20 billion Arctic Yamal LNG project would be the first Russian plant built since Gazprom, the world's top producer of conventional gas, launched its Sakhalin-2 facility in 2009.

Key to unlocking the financing is allowing Gazprom's rivals to export the super-cooled fuel, and a source familiar with the matter told Reuters that the Russian Energy Ministry had circulated a proposal to that effect.

Novatek, whose largest shareholders are CEO Leonid Mikhelson and commodities trader Gennady Timchenko, said that along with China National Petroleum Corp (CNPC) it had signed a memorandum with Chinese banks on project financing.

China Development Bank Corporation, Bank of China , China Construction Bank and Industrial and Commercial Bank of China - the world's largest bank by market capitalisation - will consider actively participating in the external project financing transaction.

Novatek, in a statement, did not specify the size of the financing but said that other financial institutions, including Russian ones, are likely to support the project too.

Yamal LNG, which is being developed by Novatek, France's Total and China's CNPC, is scheduled to start producing LNG in 2016 with a view to supplying 16.5 million tonnes of the tanker-shipped fuel by 2018.