Cheniere Energy Partners has authorized construction of the first two units of its multibillion-dollar Sabine Pass project that will export liquefied natural gas from southwest Louisiana.
Cheniere said Thursday that it gave Bechtel Oil, Gas and Chemicals Inc. the go-ahead to build the two units.
Total project costs are about $5.6 billion — funded with $2.0 billion of equity and $3.6 billion of debt, the company said.
Cheniere Partners, based in Houston, owns 100 percent of the Sabine Pass LNG terminal, located on the Sabine Pass Channel in western Cameron Parish.
The first liquefaction unit is expected to start operations as early as 2015, with the second unit starting up six to nine months after the first one, the company said.
Construction for a third and fourth unit will be determined by contracts, financing and Cheniere Partners making a final investment decision, the company said.
“Two years after announcing our plans to develop the liquefaction facility, we will begin construction,” Chairman and Chief Executive Officer Charif Souki said in a news release.
“The Sabine Pass LNG terminal will become the first facility in the contiguous U.S. capable of exporting natural gas as LNG,” he said.
Over the past two years, Cheniere has negotiated long-term contracts with four global LNG buyers for the purchase of more than 2 billion cubic feet per day over 20 years.
Customers include BG Gulf Coast LNG LLC, Gas Natural Fenosa, KOGAS and GAIL (India) Ltd.
The company also had to obtain financing and get regulatory approval for the project.
“It is a testament to the flexibility of the U.S. markets and institutions that a small company like ours was able to accomplish so much in a short time,” Souki said.
In a news release, he expressed his appreciation to state leaders, the state’s Congressional delegation, legislators and local officials in Cameron Parish for their support. He also noted the Louisiana Teachers Retirement System for investing in the project.
David Foley, senior managing director of Blackstone and CEO of Blackstone Energy Partners, said Blackstone was pleased to provide growth capital to fund the construction of the project, creating thousands of jobs and benefits to the U.S. economy.
Cheniere Partners is developing the project to add liquefaction and export capabilities adjacent to the existing infrastructure at the Sabine Pass LNG terminal, originally built to import LNG when natural gas prices were high.
The Sabine Pass LNG terminal will have regasification capacity to send out up 4 billion cubic feet per day and storage capacity of 16.9 billion cubic feet, the company said.