In compliance with the company's diversification strategy, the management board of Alrosa, which accounts for 25% of global diamond output, made a decision on the tender results December 28.
"The volume of required capital investment is estimated at 6 billion rubles (about $227 million)," Alrosa said in a statement.
The project aims to build an oil refinery with a capacity of 250,000 metric tons of oil (1.8 million barrels) annually at the Irelyakh oil field in the Republic of Sakha (Yakutia) in East Siberia. The oil field, which is located near the main production sites of Alrosa, is owned by its subsidiary Irelyakhneft.
"The project's implementation will enable Alrosa to considerably cut production costs for the purchase, transportation and trans-shipment of oil products, ensure security against price risks, use stable prognostic indices in its long-term plans and raise the company's economic efficiency," the statement said.
The project lending is designed for eight years, with a grace period for the construction period. Loans will be repaid from the sale of oil products, the statement said.
To fulfill its construction program, Irelyakhneft may draw a $50 million interim loan from the consortium of the bid winners already at the start of next year, the statement said.
