Coming in on the coat-tails of FERC’s pro-LNG actions last week, Houston-based Cheniere Energy Inc. said it has received a sizeable advance toward the development of its Freeport, TX, LNG receiving facility project. The company also appointed management for the project.

Freeport LNG Investments LLC, Cheniere’s partner in Freeport LNG Development LP, advanced Cheniere $650,000 and agreed to fund all expenses related to the development of the LNG receiving facility until the closing of the previously announced transaction between Freeport LNG Investments and Cheniere.

Cheniere, which laid out a broad plan last year to build three LNG terminals along the Texas coast, agreed in August to sell the majority interest in its planned Freeport terminal to entities controlled by Michael S. Smith, CEO and majority-interest owner of Freeport LNG Development (see NGI, Sept. 23).

Although the original closing date was scheduled to be Sept. 19, and more recently revised to Dec. 13, Cheniere said the transaction is now expected to close in mid-February under the terms of the agreement between the parties. For consideration received, Cheniere has also extended to mid-February the option held by Contango Oil & Gas Co. to acquire a 10% interest in the Freeport facility.

Under the project proposal, the companies plan to build a 1 Bcf/d, state-of-the-art LNG regasification facility on Quintana Island near Freeport. The property would be leased from the Brazos River Harbor Navigation District. A nine-mile, 36-inch pipeline from the facility to the Stratton Ridge storage hub would be built to allow adequate takeaway capacity by intrastate pipelines. Cheniere said it expects the entire project to cost in excess of $300 million.

On the management side, Cheniere announced that Charles M. Reimer has accepted the position of president and COO for Freeport LNG Development, formed by majority-owner Smith (founder and previous chairman of Basin Exploration) to pursue the development of the Freeport facility. Charif Souki, chairman of Cheniere, will assume the positions of president and CEO of the company vacated by Reimer.

At its regular meeting on Wednesday, the Federal Energy Regulatory Commission granted a significant concession to the LNG industry by agreeing to move “open access” regulation downstream of all LNG import terminals to plant tailgates where gas is delivered into interstate pipeline systems (see related story). In the future, FERC will treat LNG facilities as the functional equivalent of natural gas production facilities, over which it has no open access jurisdiction, and allow them to charge market-based rates for terminal services.

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