Cheniere Gains $3.4 Billion in Additional Funding for US LNG Export Terminal

Sabine Pass, image: Cheneire

Only 3 years after completion of phase 2 of the Sabine Pass LNG import terminal in Louisiana, Cheniere Energy Partners (NYSE Amex: CQP) announced today that it has received an additional $3.4 billion in financial commitments to fund the costs of developing, constructing and placing into service, the first two liquefaction trains of the Sabine Pass LNG liquefaction project in Louisiana.  Total committed funding for this new export facility now stands at approximately $5.4 billion.

“Our Credit Facility will be one of the larger facilities in the project financing market, underlying the strong fundamentals of the transaction,” said Charif Souki, Chairman and CEO.  “Our ability to access a very large credit facility will significantly reduce our costs of financing during construction.  We expect to reach a final investment decision and issue notice to proceed to Bechtel upon meeting all conditions precedent under the financial agreements, including, but not limited to, completion of the financing process with the Lenders and having all regulatory approvals in full force and effect.”

Cheniere Partners owns 100 percent of the Sabine Pass LNG receiving terminal located on the Sabine Pass Channel in western Cameron Parish, Louisiana.  The Sabine Pass terminal was originally designed by Bechtel to receive liquefied natural gas via LNG carrier, regasify, and send out via pipeline upwards of 4.0 billion cubic feet per day (Bcf/d).  Storage capacity at the terminal equals 16.9 billion cubic feet equivalent (Bcfe).

The Liquefaction Project is being designed and permitted for up to four modular LNG trains, each with a nominal capacity of approximately 4.5 mtpa.  The Liquefaction Project is expected to be constructed with each LNG train commencing operations approximately six to nine months after the previous train.

In November 2011, Sabine Liquefaction entered into a lump sum turnkey contract for the engineering, procurement and construction of the first two trains of the project with Bechtel Oil, Gas and Chemicals, Inc.

Sabine Liquefaction has also entered into four long-term customer sale and purchase agreements (“SPAs”) for a total of 16.0 mtpa of LNG volumes, which represents approximately 89 percent of the nominal LNG volumes.  The customers include BG Gulf Coast LNG, LLC (“BG”) for 5.5 mtpa, Gas Natural Fenosa for 3.5 mtpa, KOGAS for 3.5 mtpa and GAIL (India) Ltd. for 3.5 mtpa. In addition, Sabine Liquefaction has entered into a SPA with Cheniere Marketing, LLC for up to approximately 2.0 mtpa of LNG that is produced but not already committed to third parties.  The BG and Cheniere Marketing SPAs commence with the start of train one operations and the Gas Natural Fenosa SPA commences with the start of train two operations.

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