– Building $550 Million Condensate Storage and Marine Terminal
– Cheniere Partners Taking on $5.8 Billion Debt to Build Train 5 at Sabine Pass LNG Export Facility
Cheniere Energy (ticker: LNG) is moving forward now on several energy export fronts.
Word came out this week that the company’s plans are moving forward to construct a $550 million export terminal in Texas that would allow it to ship processed condensate and eventually crude oil abroad—in addition to enjoying first mover status with respect to LNG exports from the U.S., something the company has said it is targeting to begin initial shipments in late 2015.
Last fall Cheniere said it was looking at a 550 acre industrial property for a marine and storage terminal in Ingleside along the La Quinta Ship Channel.
Nelson Lee, Cheniere Energy’s (ticker: LNG) director of crude trading and origination, spoke about the plan for exporting crude oil condensate at a crude oil markets and storage conference this week in Houston. “The terminal will be able to export any type of domestic oil if the decades-old U.S. crude export ban is ever lifted,” Reuters reported. Lee said the timing on condensate exports would be 2017.
“The reason why we’re going ahead with that project is we think that we will have unfettered crude oil exports in U.S at some point, and there aren’t the sort of logistics for the crude to exit the United States,” Lee said at the conference, according to the Reuters report. Lee said that the terminal will have two million barrels of oil storage and dock infrastructure that can accommodate Aframax-sized tankers.
Aframax tankers are medium-sized oil tankers with a dead weight tonnage (DWT) between 80,000 and 119,999, according to Maritime Connector. Aframax tankers are “ideal for short to medium-haul oil trades, and are primarily used in regions of lower crude production, or the areas that lack large ports to accommodate giant oil carriers.”
Train 5 – Sabine Pass LNG Export Facility Funding Update
Cheniere said it has engaged 18 financial institutions to act as Joint Lead Arrangers to assist in the structuring and arranging of up to approximately $5.8 billion of debt facilities, including approximately $4.6 billion of credit facilities and an approximately $1.2 billion revolving credit facility. The capital is being raised to finance the construction of Train 5 at the company’s Sabine Pass LNG export facility in Cameron Parish, Louisiana.
The Sabine Pass Liquefaction Project is being designed for up to six liquefaction trains, each with nominal production capacity of approximately 4.5 million tonnes per annum (“mtpa”). Cheniere Partners owns 100 percent of the Sabine Pass LNG terminal located on the Sabine Pass deep water shipping channel less than four miles from the Gulf Coast.
The Sabine Pass LNG terminal includes existing infrastructure of five LNG storage tanks with capacity of approximately 16.9 billion cubic feet equivalent (Bcfe), two docks that can accommodate vessels with nominal capacity of up to 266,000 cubic meters and vaporizers with regasification capacity of approximately 4.0 Bcf/d.
Cheniere Partners plans to construct six liquefaction trains at Sabine Pass, four of which are in various stages of development. Each liquefaction train is expected to have a nominal production capacity of approximately 4.5 mtpa. The overall project completion percentage of Trains 1 and 2 is approximately 90.8% as of May 31, 2015. The overall project completion percentage of Trains 3 and 4 is approximately 67.7% as of May 31, 2015. Cheniere Partners has received all regulatory approvals to construct and operate Trains 5 and 6.
“The company has locked in contracts to sell all of the capacity from the fifth production train. Total Gas and Power, a leading energy supplier in the United Kingdom, and British utility company Centrica each inked 20-year contracts to buy LNG produced in Sabine Pass,” Reuters reported.