Financing for the Freeport LNG expansion project successfully closed Wednesday and construction has begun on the facility’s initial two LNG trains.
Freeport LNG Expansion L.P secured $11 billion in capital to develop the first two trains at the natural gas liquefaction and loading facility on Quintana Island near Freeport, Texas.
The commitments are in excess of the anticipated $9.64 billion in project costs, including financing costs, and will “provide significant buffer for contingencies and cost overruns to ensure successful completion,” the company said.
Financing and commencement of construction on the third liquefaction train is expected in the second quarter of 2015.
The first liquefaction train is expected to start operations in third quarter 2018, with the second liquefaction train expected to commence operations five months later.
Each liquefaction train has a nameplate design capacity of 4.64 million tonnes per year.
The $14 billion project will expand an existing terminal and build three new LNG trains to provide nominal export capacity of about 13.2 million metric tonnes of LNG per year.
The terminal expansion will enable the liquefaction and export of about 2.0 billion cubic feet per day of gas.
The terminal will still be able to import LNG into the domestic market.
“We are excited to bring together a diverse group of the world’s most sophisticated investors, lenders, LNG industry participants, and governmental institutions to support the advancement of the Freeport LNG liquefaction project,” CEO of Freeport LNG Michael S. Smith said.
Freeport LNG Expansion is a wholly owned subsidiary of Houston-based Freeport LNG Development, owner and operator of an existing LNG regasification terminal located near Freeport, Texas.
Freeport partners include Freeport LNG Investments, FLNGI Option Holdco, ZHA FLNG Purchaser, Dow Chemical subsidiary Texas LNG Holdings and Osaka Gas subsidiary Turbo LNG.