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Freeport LNG agrees financing for liquefaction train

LNG Industry,

Freeport LNG subsidiary, FLNG Liquefaction, has entered into agreements for the debt financing of approximately US$ 3.85 billion required for the development of Freeport LNG’s first train facility.

Freeport LNG is proposing to construct a natural gas liquefaction and loading facility on Quintana Island near Freeport, Texas.

Train One financing

The Train One debt financing is being provided by Japan Bank for International Cooperation (JBIC) and six commercial banks: The Bank of Tokyo-Mitsubishi UFJ, Ltd., Sumitomo Mitsui Banking Corporation, Mizuho Bank, Ltd., Sumitomo Mitsui Trust Bank, Limited, Mitsubishi UFJ Trust and Banking Corporation, and ING Bank N.V., Tokyo Branch.

The portion of the loans financed by the commercial banks is insured by Nippon Export and Investment Insurance (NEXI). Osaka Gas Co., Ltd. (Osaka Gas) and Chubu Electric Power Co., Inc. (Chubu Electric) are also investing approximately US$ 1.2 billion for the development of Train One.

Japanese utilities

"We are excited to announce our partnership with Japanese governmental institutions to support the financing needs of the Freeport LNG liquefaction facility and to become a key contributor to the long-term diversification and security of energy supplies to Japanese utilities," commented Michael S. Smith, CEO of Freeport LNG.

"We look forward to commencing construction of the initial two trains of the liquefaction project in the coming weeks and beginning commercial exports in 2018."

Final funding

Freeport LNG expects to soon announce the execution of definitive agreements for the debt financing for its second train facility (Train Two). These agreements, together with the Train One financing agreements and the previously announced US$ 1.3 billion equity commitment to Train Two by IFM Investors, will position Freeport LNG to close initial funding and commence construction of the initial two trains of the liquefaction facility, following FERC and DOE final approvals.

Financial close and commencement of construction on Freeport LNG's third train facility is expected in H1 2015.

Macquarie Capital is serving as Freeport LNG's financial advisor with respect to the financing for the Train One project.

Adapted from press release by Katie Woodward

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