Freeport LNG closes financing for third train

Freeport LNG’s unit, FLNG Liquefaction 3, closed on financing commitments of approximately $4.56 billion in capital required for the construction of the third train of its natural gas liquefaction and LNG loading facility on Quintana Island, Texas.

The construction cost for the combined three-train project is expected to be $12.5 billion, including owner’s costs and interest during construction. An additional $3 billion in funds were raised for refinancing and acquisition costs associated with the existing LNG import facility, letters of credit facilities, and a special contingency fund, Freeport LNG said in a statement on Tuesday.

With closing on financing, Freeport LNG has completed all milestones and issued a full notice to proceed to CB&I, Zachry Industrial and Chiyoda International Corporation to construct the third train of the Freeport LNG liquefaction project. Full three-train operation is expected by the third quarter of 2019.

LNG production from the first liquefaction train is expected in early 2018, with commercial operation of the first train expected to commence by the third quarter of 2018.

Approximately $3.64 billion in senior debt financing for the third train is being provided by a syndicate of 27 commercial banks under a 7-year mini-perm construction facility. About $925 million in equity financing for the third train is being provided through mezzanine debt financing. Freeport LNG will retain 100% equity ownership in FLIQ3 and the third liquefaction train.

FLIQ3 has entered into 20-year liquefaction tolling agreements totaling 4.4 million tonnes per annum with SK E&S LNG and Toshiba Corp.

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Image: Freeport LNG

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