Osaka and Chubu sign Freeport LNG equity agreement

Freeport LNG, Osaka Gas and Chubu Electric Power have announced that they have entered into an agreement to invest approximately US$ 1.2 billion of equity funding for Freeport LNG’s proposed natural gas liquefaction and LNG loading facility on Quintana Island, near Freeport, Texas. The facility involves the development of three liquefaction trains.

Investment capital

The investment by Osaka Gas and Chubu Electric will provide equity needed to develop Freeport's first train facility (Train One). Investment capital will be drawn down over Train One's 45-month construction period. The balance of Train One's capital needs will be sourced from a group of lenders, including a Japanese government financial agency and commercial banks. Financial close for the transaction is expected to take place in H2 2014, upon receipt of regulatory approvals.

Comments

Freeport LNG CEO, Michael Smith, commented: "We are excited to announce our long-term equity partnership with Osaka Gas and Chubu Electric, our Train One customers and two of the largest Japanese utilities, which together purchase almost 25% of all Japanese LNG purchases. Combined with the previously announced equity investment by IFM Investors in our second train facility, the funding to be provided by Osaka Gas and Chubu Electric satisfies all of the equity capital needs for construction of the initial two trains of the liquefaction project."

Liquefaction agreements

In July 2012, Freeport LNG executed 20-year liquefaction tolling agreements with Osaka Gas and Chubu Electric equivalent to the minimum guaranteed production capacity of Train One.

Adapted from press release by Katie Woodward

Read the article online at: https://www.lngindustry.com/liquid-natural-gas/27022014/equity_investment_in_freeport_lng_227/