* Deal means Yamal LNG external financing needs covered
* Loan agreement likely be lauded as Putin win over West (Adds details, quote from Yamal director general)
By Vladimir Soldatkin and Olesya Astakhova
MOSCOW, April 29 (Reuters) - Russia's Yamal liquefied natural gas (LNG) project has signed loan agreements with Chinese banks worth over $12 billion, it said on Friday, circumventing Western sanctions in a major boost for the project led by gas producer Novatek.
Talks with European and Chinese lenders had dragged on for months, complicated by Western sanctions against Novatek and its major shareholder Gennady Timchenko, a friend of Russian President Vladimir Putin, over Moscow's role in the Ukraine crisis.
With the deal, Yamal LNG's external financing needs, seen at $18-$19 billion, are fully covered.
The project has already secured state funds worth 150 billion roubles ($2.3 billion) from a rainy day fund and 3.6 billion euros from state-controlled lender Sberbank and Gazprombank.
Yamal LNG's future had been in jeopardy due to the lack of access to Western capital markets. Plunging oil prices, the benchmark for gas prices, had also clouded its prospects.
Several other global LNG projects, notably the proposed $30 billion Browse floating LNG project off Australia, have been shelved due to global oversupply.
"The project is progressing in accordance with the approved schedule. With the first train of the LNG plant 65 percent complete we are currently at the most intensive phase of construction and assembly works," Yevgeny Kot, director general of Yamal LNG, said in a statement.
The loan deals, the third-largest in Russian corporate history, are likely to be presented in Russia as a victory over what are seen as Western attempts to curb Russia's energy expansion to punish it for its role in the Ukraine crisis.
They are also in line with Russia's "Eastwards Pivot", a policy of forging closer political and economic ties with Asia's biggest powerhouses, such as China, to compensate for poorer relations with the West.
Earlier this decade, Kremlin energy champion Rosneft , raised over $30 billion in Western loans to acquire Anglo-Russian oil firm TNK-BP, while oil pipeline monopoly Transneft jointly with Rosneft got $25 billion from Chinese banks to build a pipeline to Asia.
The new funds will help the $27 billion Yamal LNG project to start producing liquefied gas next year. Three LNG production lines are envisaged, each with an annual capacity of 5.5 million tonnes.
About 95 percent of future production has been pre-sold.
Yamal LNG, the world's most northerly project of its kind, is located beyond the Arctic circle. The gas, frozen at a temperature of around minus 160 Celsius (minus 320 Fahrenheit)will be shipped to global markets including China.
Russia wants to double its share in the global LNG market by 2020 from 4.5 percent currently. Kremlin-controlled Gazprom and Royal Dutch Shell are key shareholders in Russia's only LNG plant, located on the Pacific island of Sakhalin. It produces over 10 million tonnes of LNG per year.
The 15-year loan deals of 9.3 billion euros ($10.6 billion) and 9.8 billion yuan ($1.5 billion) were signed with Export-Import Bank of China and the China Development Bank.
The euro-denominated part of the loan is being made at 3.3 percent above the European benchmark 6-month EURIBOR rate at the construction stage and 3.55 percent above thereafter, Yamal LNG said. The renminbi loan is being made at 3.3 percent above China's 6-month SHIBOR benchmark, and then 3.55 percent above.
Novatek holds 50.1 percent of Yamal LNG. France's Total and China National Petroleum Corp control 20 percent each while China's Silk Road Fund owns 9.9 percent.
($1 = 0.8790 euros)
($1 = 6.4840 Chinese yuan renminbi)
$1 = 64.3000 roubles Editing by David Goodman and Mark Potter