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Global Infrastructure Partners Taking Stake in Freeport LNG

A Global Infrastructure Partners (GIP) fund is acquiring a 25% stake in Freeport LNG Development LP from a consortium of institutional investors managed by Hastings Funds Management (USA) Inc. and Zachry American Infrastructure LLC.

Global Infrastructure Partners II is paying $850 million, subject to certain milestones and purchase price adjustments. Freeport LNG is developing a three-train liquefied natural gas (LNG) export facility at its existing LNG receiving and regasification facility on Quintana Island, near Freeport, TX.

The transaction is expected to close in the fourth quarter (following financial closing for Trains 1 and 2 of the Freeport LNG facility).

"As the energy revolution in the U.S. turns it into a major LNG exporter, Freeport LNG is one of a handful of projects at an advanced stage of development," said GIP Chairman Adebayo Ogunlesi. "GIP has worked closely with Freeport LNG's CEO, Michael Smith, and his experienced management team and we look forward to further developing our strategic relationship with Freeport LNG."

Last month, Federal Energy Regulatory Commission staff issued the final environmental impact statement for the Phase II Modification Project and the Liquefaction Project proposed by Freeport LNG and found the projects' impacts would not be significant provided the developer incorporated planned and suggested mitigation measures (see Daily GPI, June 16).

Freeport LNG Development has four limited partners that, collectively, own all of the economic interests: Freeport LNG Investments LLLP, an entity owned by Michael S. Smith; ZHA FLNG Purchaser LLC, a Delaware limited liability company; Texas LNG Holdings LLC, a subsidiary of The Dow Chemical Co.; and Turbo LNG LLC, a subsidiary of Osaka Gas Co. Ltd.

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