Cheniere Energy Partners announced that it has completed all milestones and has issued a full notice to proceed to Bechtel Oil, Gas and Chemicals to construct the first two liquefaction trains of the Sabine Pass liquefaction project.
The first liquefaction train is expected to start operations as early as 2015, with the second liquefaction train expected to commence operations six to nine months thereafter.
“The Sabine Pass LNG terminal will become the first facility in the contiguous U.S. capable of exporting natural gas as LNG. Two years after announcing our plans to develop the liquefaction facility, we will begin construction. In those two years, we were able to finalize long-term commercial arrangements with four global LNG buyers for over 2 Bcf/d for 20 years, negotiate a construction agreement for the first 1 Bcf/d on a lump sum basis, and most importantly work with governmental agencies at the federal, state and local level to receive all necessary permits to begin construction on a new facility with no precedent in the Lower 48. It is a testament to the flexibility of the U.S. markets and institutions that a small company like ours was able to accomplish so much in a short time,” said Charif Souki, Chairman and CEO of Cheniere.
Mr. Souki continued, “We are grateful to the state of Louisiana and its elected leaders – including Governor Jindal and his Cabinet, the entire Congressional delegation, state legislators, and local officials in Cameron Parish for their support in the development of our Liquefaction Project and welcoming Cheniere to Louisiana, and the Louisiana Teachers Retirement System, for being an investor in the project.”
David Foley, Senior Managing Director of Blackstone and CEO of Blackstone Energy Partners, said, “We are pleased to provide the growth capital to fund the construction of the first LNG export facility in the continental United States, creating thousands of jobs for American workers and providing significant benefits to the U.S. economy. We look forward to being a value-added, long term partner to Cheniere’s outstanding management team as we work together to bring this facility online in a safe, efficient and timely manner.”
Total project costs of approximately $5.6 billion will be funded with approximately $2.0 billion of equity and approximately $3.6 billion of debt. The aggregate $2.0 billion equity investment initially represents approximately 100.0 million Class B Units for affiliates of Blackstone Capital Partners and 33.3 million Class B Units for Cheniere Energy (CEI). Blackstone has made its initial investment and purchased $500 million of Cheniere Partners Class B Units. Blackstone will purchase additional Class B Units up to an investment of $1.5 billion as funds are needed for the Liquefaction Project. As previously announced, CEI has completed its purchase of $500 million of Class B Units. Sabine Pass Liquefaction has also received an initial advance of $100 million on its previously announced credit facility.
The Board of Directors of the general partner of Cheniere Partners will be comprised of eleen directors, including four directors appointed by CEI, three directors appointed by Blackstone, and four independent directors.
LNG World News Staff, August 10, 2012