Freeport LNG announces financing for part of project

Freeport LNG has secured financing for the first of three liquefaction units proposed for a natural gas export terminal in Brazoria County, the company said Wednesday.

Two Japanese firms — Osaka Gas Co. and Chubu Electric Power Co. — that previously contracted to buy the liquefied natural gas  from the plant will invest $1.2 billion in the project while Freeport LNG will borrow $3.85 billion from an array of Japanese banks to pay for the construction of the first unit, called a train.

“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,” CEO Michael S. Smith said in a prepared statement.

The announcement puts Freeport LNG a step closer to fully financing the project, which is among a handful authorized by federal regulators to begin construction.

The privately owned company said it plans to announce financing agreements soon for a second train and expects to secure funding and start construction on the third train early next year.

The project has conditional approval from the federal government to export 1.8 billion cubic feet per day of natural gas to countries that lack free-trade agreements with the United States.

Pending final export authorization from the U.S. Department of Energy, construction is expected to begin in November, the company said. The first commercial exports will ship out of the plant in 2018.

SHOW MORE