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$5.4 billion funding ready to start Cheniere LNG Phase 1

Cheniere secured first phase Sabine Pass LNG funding

In February, the private equity firm Blackstone Group LP (Blackstone) provided Cheniere Energy Partners (Cheniere) with $2 billion to finance Sabine Pass LNG Export Terminal conversion project.

Since then Cheniere had appointed eight financial institutions to raise up to $4 billion in debt to complete the financing.

As a result, the Texas-based, Cheniere secured an additional $3.4 billion loans.

With $5.4 billion cash now available for capital expenditure, Cheniere can proceed with the first phase of the Sabine Pass LNG project.

Originally planned to be a LNG  Import Terminal the Sabine Pass LNG project in Lousianna, USA, had to be reconsidered to become bi-directional in the context of US U-turn from large natural gas importer to potential exporter with the unexpected boom of the shale gas industry.

With natural gas prices standing below $3/mmBTU in USA, in refering to Henry Hub trading prices, any opportunity to export US natural gas to Europe or Asia is to considered with great attention since regional price there are at least three times higher.

Benefiting from this large spread between the regional natural gas prices, Cheniere signed long term contracts with BG in UK, Korea Gas (KOGAS) in South Korea, Gas Natural Fenosa in Spain, GAIL in India.

These contracts totalize 16 million t/y of LNG representing 90% of the capacity of the LNG Trains planned by Cheniere at the Sabine Pass LNG project.

EPC to Bechtel with ConocoPhillips Cascade design

Located at the Sabine Pass receiving terminal in Cameron Parish, Louisiana, USA, the Sabine Pass LNG terminal is now designed with bi-directional import-export capabilities.

With a total capacity of 18 million t/y the Sabine Pass LNG project will include up to

 – 4 LNG Trains

 – 2.2 Bcf/d of natural gas total processing capacity

 – 4.5 million t/y nominal capacity per Train

 – ConocoPhillips Cascade LNG Trains technology

 – 6 GE LM2500+G4 gas turbines driven refrigerant compressor per Train.

 – SAC water injection for emission control

 – Gas turbine inlet air humidification

– BASF aMDEA acid gas removal

The total capital expenditure for the Sabine Pass LNG project is estimated to $10 billion out of which $5.4 billion are now secured.

In order to match with the financing time frame and start deliveries as soon as possible, the Sabine Pass LNG project will be executed in two phases.

In November 2011, Cheniere awarded Bechtel Oil, Gas and Chemicals Inc. (Bechtel) a $3.9 billion Lump sum turn key contract for the engineering, procurement and construction (EPC) work to build the first phase of Sabine Pass LNG project.

This first phase would include:

 – 2 LNG Trains with liquefaction capacity of 9 million t/y

 – The reconfiguration of the existing infrastructure at the Sabine Pass terminal into a bi-directional system with 5 storage tanks, 2 berths, 94-mile Creole Trail Pipeline

On April 17th, Cheniere has got the formal approval from the Federal Energy Regulatory. 

 

With the funding in place for the Sabine Pass LNG project phase 1 and customers such as BG, KOGAS, Gas Natural Fenosa or GAIL asking for more, Cheniere is proceeding with Bechtel to load the first LNG carrier in 2015.

For more information and data about oil and gas and petrochemical projects go to Project Smart Explorer

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