Under the deal, the Japan Bank for International Cooperation, Japan's leading financial institution, will provide $3.7 billion for Sakhalin II. A consortium of international commercial banks will contribute an extra $1.6 billion, Sakhalin Energy, which is the project's operator, said.
The Sakhalin II oil and gas fields have estimated reserves of 150 million metric tons (1.1 billion barrels) of oil and 500 billion cubic meters of natural gas.
"The funds will finance the final stages of construction, testing and commissioning of Sakhalin II, Phase 2, which will soon start delivering liquefied natural gas to customers in Japan, Korea and the North American West Coast," Sakhalin Energy said in a statement.
The Sakhalin II project, with an estimated cost of $20 billion, is designed to produce LNG at two fields off Sakhalin. After Russian energy giant Gazprom bought a 50% stake plus one share in the project for $7.45 billion in late 2006, Royal Dutch/Shell, Mitsui and Mitsubishi now own 27.5%, 12.5% and 10%, respectively.
Japanese, U.S. and South Korean companies have already paid for the bulk of the Sakhalin II project gas 25 years in advance.
Sakhalin is some 10,000 km (6,200 miles) east of Moscow. The island was once a Soviet military outpost and was off limits to foreigners for many years. The development of the oil and gas fields has been criticized by environmental groups who say that it could lead to the extinction of the world's last Western Pacific gray whales.