Cheniere Energy Partners, L.P. (LNG) said late Monday that it has received approval from the Federal Energy Regulatory Commission or FERC to construct and operate facilities to liquefy domestic natural gas for export to international markets.
This is the FERC's first approval of a project that would export liquified natural gas or LNG from production resources within the U.S. Shares of Cheniere gained more than 7 percent in after-hours trading following the news.
Chenerie Energy said that the regulator's approval was received for export of domestically produced natural gas at the Sabine Pass LNG terminal located in Cameron Parish, Louisiana.
The regulatory approval authorizes the development of up to four modular LNG trains, each with a nominal capacity of about 4.5 million tonnes per annum or mtpa.
The approval requires Chenerie to complete construction and have the proposed facilities available for service within five years of the date of the order. The project is estimated to cost $10 billion.
Cheniere Partners owns 100 percent of the Sabine Pass LNG receiving terminal. The Sabine Pass terminal has regasification and send-out capacity of 4.0 billion cubic feet per day or Bcf/d, and storage capacity of 16.9 billion cubic feet equivalent or Bcfe.
Cheniere Energy's subsidiaries, Sabine Pass LNG and Sabine Pass Liquefaction, plan to construct and operate liquefaction and related facilities that would enable them to liquefy and export up to 2.2 billion cubic feet, or 16 million tons per annum, of domestically produced natural gas.
The subsidiary companies had earlier received approval from the U.S. Department of Energy for their plans to export LNG for a 20-year period.
The liquefaction project will be built in two stages, each consisting of two LNG process trains with a liquefaction capacity of an estimated 4.0 mtpa. Each LNG train will commence operations about six to nine months after the previous train.
Sabine Liquefaction has entered into four long-term customer sale and purchase agreements for 16.0 mtpa of LNG volumes, representing about 89 percent of the nominal LNG volumes. The customers include BG Gulf Coast LNG, LLC for 5.5 mtpa, and Gas Natural Fenosa of Spain, KOGAS of Korea, and GAIL (India) Ltd. for 3.5 mtpa each.
Earlier in the day, Cheniere said it has engaged eight financial institutions to act as joint lead arrangers to assist in the structuring and arranging of up to $4 billion of debt facilities.
The eight financial institutions are the Bank of Tokyo-Mitsubishi UFJ, Ltd., Credit Agricole Corporate and Investment Bank, Credit Suisse Securities (USA) LLC, HSBC, J.P. Morgan Securities LLC, Morgan Stanley, RBC Capital Markets, and SG Americas Securities, LLC.
Cheniere will use the proceeds to pay for costs of development and construction of the liquefaction project at the Sabine Pass LNG terminal, to fund the acquisition of the Creole Trail Pipeline from Cheniere Energy, Inc. and for general business purposes.
LNG closed Monday's trading at $16.99, up $0.13 or 0.77 percent on a volume of 10.70 million shares. In after-hours, the stock further gained $1.26 or 7.42 percent to $18.25.
by RTT Staff Writer
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