Cheniere affiliate to raise money for Louisiana LNG export project

Cheniere Energy Partners LP (NYSE MKT: CQP) announced Feb. 26 that wholly owned subsidiary Sabine Pass Liquefaction LLC intends to offer, subject to market and other conditions, $1.0 billion of principal amount of Senior Secured Notes due in 2025 (called the “SPL 2025 Notes”).

Sabine Pass Liquefaction intends to use the net proceeds from the offering to pay capital costs in connection with the construction of the first four liquefaction trains at its facility in Cameron Parish, Louisiana, and to pay fees and expenses associated with the offering. In connection with the offering, Sabine Pass Liquefaction will reduce commitments on a ratable basis under its four credit facilities totaling approximately $2.7 billion (collectively called the “2013 Liquefaction Credit Facilities”).

The SPL 2025 Notes will rank pari passu in right of payment with all existing and future senior secured indebtedness of Sabine Pass Liquefaction, including borrowings under the 2013 Liquefaction Credit Facilities, its outstanding senior secured notes due 2021, senior secured notes due 2022, senior secured notes due 2023, and senior secured notes due 2024 and its obligations under the senior letter of credit and reimbursement agreement.

The Sabine Pass liquefaction project is being developed for up to six liquefaction trains with a total design capacity of about 27 million tons per year. Construction has begun on LNG Trains 1-4 at Sabine Pass.

Federal Energy Regulatory Commission staff filed with the commission on Feb. 26 a report on an inspection done at the site earlier in the month. That report said in part: “The Stage 1 Liquefaction area consisting of Train 1 and Train 2 continues with installation of equipment, aboveground piping, and cabling for electrical and instrumentation. All major process vessels have been installed in Train 1 and work continues on the mechanical completion, testing, and insulating of all piping systems. Train 1 Waste Heat Recovery Units have been erected onto the refrigerant compressor exhaust stacks and all motors have been installed on the Train 1 propane cooler fans. The refrigerant compressors have started to be oil flushed. Activities in Train 2 include setting of major process equipment. Piping continues to be installed, pressure tested, and insulated in Train 2. Electrical cable trays are being installed and the structural steel pipe rack (bridge) that connects the north end of Train 2 to Stage 1 Outside Battery Limits (OSBL) has been erected to continue cable pulling activities into Train 2. The installation of liquefied natural gas (LNG) spill trenches continues in Trains 1 and 2.”

The report later added: “The gas turbine generators (G-101E and G-101F) have been set and testing has commenced on the equipment in the revamp area (existing Sabine Pass LNG terminal). Fire water tie-ins for LNG tanks S-103 and S-105 in the revamp area are also being installed. Work is complete on the Creole Trail Pipeline Expansion Project at the Sabine Pass Liquefaction site and the area has been cleaned and fenced-off from the rest of the construction site. The feed gas inlet meters and underground gas piping has been installed with fencing around the area. The fuel gas heaters (E-102A/B/C) within the existing terminal have been replaced with larger capacity heaters and are being utilized for testing the new gas turbine generators. Two of the three heaters are fully functional and are being operated manually during testing activities.”

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.