FLNG Liquefaction 3 LLC (FLIQ3) closed about $4.6 billion in senior and mezzanine debt financings for construction of the third train of Freeport LNG's natural gas liquefaction and LNG loading facility near Freeport, Texas, Freeport LNG said April 28.
The third train will receive about $3.64 billion in senior debt financing from a 27-bank syndicate. The train will receive about $925 million in equity through mezzanine debt financing. Freeport LNG will keep full equity ownership in FLIQ3 and the third train. FLIQ3 entered into 20-year liquefaction tolling agreements, totaling 4.4 million tonnes per year, with SK E&S LNG LLC and Toshiba Corp.
An additional $3 billion raised will cover the existing LNG import facility’s refinancing and acquisition costs, letters of credit facilities and special contingency fund.
The facility is on Quintana Island. Construction will cost $12.5 billion, including owner's costs and interest.
LNG production from the first train is scheduled for 2018, and the train’s commercial operations are scheduled for third-quarter 2018.
Freeport LNG awarded contracts to a joint venture between CB&I Inc. and Zachry Industrial to construct the first two trains. They are now being built and are scheduled to start operations by September 2018 and February 2019, respectively.
Freeport LNG issued a full notice to proceed to CB&I Inc., Zachry Industrial Inc. and Chiyoda International Corp. They will construct the third train, which is scheduled to begin operations in third-quarter 2019, the company added. This train is scheduled to start operations by August 2019.
Each train can handle more than 5 million tonnes per year. About 13.4 million tonnes per year of this total capacity was contracted under use-or-pay liquefaction tolling agreements with Osaka Gas Co. Ltd., Chubu Electric Power Co. Inc., BP Energy Co., Toshiba Corp. and SK E&S LNG LLC.
Freeport LNG received final approvals from the Federal Energy Regulatory Commission and U.S. Department of Energy for the three-train project and facility in November 2014.
Macquarie Capital is Freeport LNG's financial adviser. White & Case is Freeport LNG's finance counsel.
Chadbourne & Parke was counsel for the 27-bank group of lenders.
Akin Gump Strauss Hauer & Feld represented SK E&S.
Norton Rose Fulbright represented Toshiba Corp.
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