Freeport LNG Development LP said last Tuesday it closed on $383 million of private placement note funding with nine institutional investors for the construction of the first phase of its liquefied natural gas (LNG) terminal on Quintana Island in Brazoria County, TX.
The $383 million from the notes will be combined with previously arranged financing provided by ConocoPhillips to fund Phase 1 of the project, which includes two above-ground LNG storage tanks with a capacity of 6.9 Bcf and sendout capacity of 1.75 Bcf/d, Freeport LNG Development said. Natural gas will be transported through a nine-mile, 42-inch diameter pipeline extending from the import terminal to a proposed meter station at Stratton Ridge hub in Brazoria County, a major hub within the Texas intrastate gas pipeline system.
Construction of the terminal began in January of this year and is expected to be completed by January 2008, Freeport LNG Development reported. The terminal's Phase 1 capacity has been sold to ConocoPhillips (1 Bcf/d) and to Dow Chemical Co. (0.5 Bcf/d).
The proceeds of the notes also will be used to fund the development of 7.5 Bcf of underground salt cavern gas storage at Stratton Ridge and a portion of the cost of an expansion of the LNG terminal, the company said. The Phase II expansion of the LNG terminal calls for a second unloading dock and 0.5 Bcf/d of additional sendout capacity, which has been sold to MC Global Gas Corp., a subsidiary of Mitsubishi Corp., and ConocoPhillips under long-term agreements.
Assuming FERC approval of the proposed expansion in mid-2006, Freeport LNG said Phase II capacity is expected to be available in 2009. It noted that future expansions of the terminal are planned and will be constructed as additional capacity is sold.
Freeport LNG Development, which is 60% owned by privately held Freeport Investment, also is partially owned by two Houston-based independents, Cheniere Energy Inc., with a 30% interest, and Contango Oil & Gas, which has a 10% stake.
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