Australia’s Liquefied Natural Gas Ltd., (LNG Ltd.), whose Magnolia LNG LLC (MLNG) unit is developing a liquefied natural gas (LNG) export facility at the Port of Lake Charles in Louisiana, said it has struck a preliminary agreement with Stonepeak Infrastructure Partners LP for the latter to provide project financing in exchange for a stake in the terminal.

“Based on the initial development plan of two LNG trains with a total capacity of 4 million tonnes of LNG per annum [see Daily GPI, March 4; Dec. 20, 2012], it is assessed that Stonepeak would hold about 50% of the MLNG Project for contributing the full US$660 million project equity requirement,” LNG Ltd. said. “The company would retain about 50% of the MLNG project.”

The estimated capital cost of initial development is US$2.2 billion. LNG Ltd. said it plans to finance the project based on 70% project debt financing with the 30% project equity financing provided by Stonepeak. The ownership split between LNG Ltd. and Stonepeak is to be determined at the closing of a transaction.

Under the planned agreement, Stonepeak would help LNG Ltd. secure long-term project debt financing, estimated at US$1.54 billion, for the terminal.

“This early equity commitment will allow the MLNG project to proceed in a timely manner and reduces the time from receipt of all permits and environmental approvals and completion of all bankable project documentation to achieve financial close and proceed to construction,” said LNG Ltd. Managing Director Maurice Brand. “In addition, it provides an increased level of confidence for LNG tolling parties and other stakeholders in relation to the MLNG project achieving financial close.”

Stonepeak invests in North American infrastructure assets with stable cash flows, inflation linkage and high barriers to entry, LNG Ltd. said. It manages capital on behalf of pension funds and insurance companies in the United States and abroad. Founding partners Michael Dorrell and Trent Vichie formerly led the Blackstone Group’s infrastructure division before forming Stonepeak in 2011. Stonepeak manages more than US$1.2 billion of equity.

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