Cheniere Energy Partners, L.P. (CQP) announced Tuesday that it has agreed to sell $2 billion of equity for its liquefaction project at Sabine Pass, of which Blackstone will buy $1.5 billion in Cheniere Partners and Cheniere Energy, Inc., will invest $0.5 billion. The commencement of the operations is targeted for 2015.
Cheniere Partners owns 100 percent of the Sabine Pass LNG receiving terminal located on the Sabine Pass Channel in western Cameron Parish, Louisiana.
As per the Unit Purchase Agreement with investment funds managed by Blackstone Energy Partners L.P. and Blackstone Capital Partners VI L.P., Blackstone has agreed to purchase $1.5 billion newly issued Cheniere Energy Class B units from Cheniere Partners in a private placement. As announced earlier, Cheniere Energy, Inc., will also buy $500 million newly issued Class B units in a separate agreement.
Charif Souki, chairman and CEO of the company said, "Financing is the last milestone we need to complete in order to proceed with the construction of the first two trains of our Liquefaction Project at Sabine Pass. We expect to finance the Liquefaction Project with a combination of debt and equity, and these financings with Blackstone and CEI complete the equity portion."
As per its recent announcement, the company has engaged eight joint lead arranger banks to arrange the debt financing.
Blackstone and Cheniere Energy, Inc., have agreed to purchase 100 million and 33.3 million, respectively, Class B Units for $15.00 per unit. The company noted that the Class B units will accrete at a compounded rate of 3.5 percent per quarter.
At initial funding, Blackstone and Cheniere Energy, Inc., will purchase 33.3 million Class B units each.
The company intends to use the proceeds to fund the equity portion of the costs of developing, constructing and placing into service the Sabine Pass LNG liquefaction project. It will also use the funds to buy Creole Trail Pipeline from Cheniere Energy, Inc. and to fund modifications to the Creole Trail Pipeline and for other partnership business purposes. .
Credit Suisse Securities LLC acted as financial adviser to Cheniere Partners.
CQP is currently trading at $24.28, down $0.76 or 3.05 percent, on a volume of 55 thousand shares on the NYSE.
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