Cheniere gets financing for Sabine Pass LNG export trains 3, 4

Houston (Platts)--29May2013/536 pm EDT/2136 GMT


Cheniere Energy Partners has received a needed $5.9 billion in financing to build trains 3 and 4 of its Sabine Pass Liquefaction Project in Louisiana and intends to start construction immediately, the company said Wednesday.

Cheniere Partners has also told Bechtel to begin building trains 3 and 4, the company said in a statement.

Sabine Pass Liquefaction, a wholly owned subsidiary of Cheniere Partners, has closed on credit facilities totaling $5.9 billion, including a Term Loan A credit facility of $4.4 billion with a syndicate of 27 banks and financial institutions, the statement said.

It also has closed three additional credit facilities with Republic of Korea financial institutions -- the Export-Import Bank of Korea and Korea Trade Insurance Corp. -- for $1.5 billion. The credit facilities mature on May 28, 2020.

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The credit facilities complete the financing needed to develop, build and start up the first four liquefaction trains at Sabine Pass, the statement said.

"We have completed all milestones to start construction on the first four liquefaction trains being developed by Sabine Liquefaction," Charif Souki, chairman and CEO, said in the statement.

Construction on trains 1 and 2 began last August and is about 30% complete, Souki said.

Construction of trains 3 and 4 would start immediately and the first LNG is expected by late 2015, he added.

The company expects to complete the required resource reports for trains 5 and 6 to file an application by September with the US Federal Energy Regulatory Commission, Souki said.

Societe Generale acted as sole and exclusive financial adviser to Sabine Liquefaction in connection with the $5.9 billion of credit facilities, the statement said. Standard Chartered Bank was a consultant in connection with the ROK Credit Facilities.

Cheniere Partners has also completed the acquisition of the Creole Trail Pipeline from subsidiaries of Cheniere Energy, the statement said. The 94-mile pipeline would be used to deliver domestic gas to the liquefaction project. The company also completed $400 million of financing to fund capital expenditures needed to reverse the flow of the pipeline, to fund interest during construction, and for general business purposes.

Cheniere Partners owns 100% of the Sabine Pass LNG terminal, located on the Sabine Pass deepwater shipping channel less than four miles from the Gulf Coast. The terminal has regasification facilities that include existing infrastructure of five LNG storage tanks with capacity of about 16.9 billion cubic feet, two docks that can accommodate vessels of up to 265,000 cubic meters, and vaporizers with regasification capacity of about 4.0 Bcf/d.

Cheniere Partners plans to build up to six gas liquefaction trains, which are in various stages of development, the company said. Each train is expected to have nominal capacity of about 4.5 million mt/year.

A Cheniere Partners subsidiary, Sabine Pass Liquefaction, has lump-sum turnkey contracts with Bechtel for engineering, procurement and construction of trains 1 through 4, the statement said. Sabine Pass Liquefaction has started building the first four trains and related new facilities needed to treat, liquefy, store and export natural gas.

Sabine Pass Liquefaction recently began developing trains 5 ang 6 after starting the regulatory process in February. Construction of trains 5 and 6 and related facilities may start after the company gets regulatory approvals, financing commitments to fund the trains and makes a final investment decision, the company said.

Sabine Pass Liquefaction has also entered into third-party LNG sale-and-purchase agreements with BG for 5.5 million mt/year, Gas Natural Fenosa for 3.5 million mt/year, Korea Gas for 3.5 million mt/year, Gail (India) for 3.5 million mt/year, Total Gas & Power for 2.0 million mt/year and Centrica for 1.75 million mt/year.

Sabine Pass Liquefaction also has an SPA with Cheniere Marketing for up to 2.0 million mt/year of LNG that is not already committed to third parties, the company said.

The BG and Cheniere Marketing SPAs start when train 1 begins operating and the Gas Natural Fenosa SPA starts when train 2 begins operating, the statement said. The Kogas SPA starts with operations of train 3 and the Gail SPA with train 4 operations. The Total and Centrica SPAs start with train 5 operations.

--Michael Rieke, Michael.rieke@platts.com --Edited by Derek Sands, derek.sands@platts.com