The construction cost for the combined three-train project is expected to be $12.5 billion, including owner’s costs and interest during construction. An additional $3.0 billion in funds were raised for refinancing and acquisition costs associated with the existing LNG import facility, letters of credit facilities, and a special contingency fund.
With closing on financing, Freeport LNG has completed all milestones and issued a full notice to proceed to CB&I, Inc., Zachry Industrial, Inc. and Chiyoda International Corporation to construct the third train of the Freeport LNG liquefaction project. Full three-train operation is expected by the third quarter of 2019. LNG production from the first liquefaction train is expected in early 2018, with commercial operation of the first train expected to commence by the third quarter of 2018.
Approximately $3.64 billion in senior debt financing for the third train is being provided by a syndicate of 27 commercial banks under a 7-year mini-perm construction facility. Approximately $925 million in equity financing for the third train is being provided through mezzanine debt financing. Freeport LNG will retain 100% equity ownership in FLIQ3 and the third liquefaction train. FLIQ3 has entered into 20-year liquefaction tolling agreements totaling 4.4 million tonnes per annum with SK E&S LNG, LLC and Toshiba Corp.
"We are excited to achieve this next great milestone in the advancement of the Freeport LNG liquefaction project. After over four-and-a-half years of incredibly hard work from so many people within Freeport LNG and from our bankers, lawyers, and consultants, we are pleased to finally have the full three-train project under construction. We are thrilled to have five of the top LNG industry participants as our customers, and world class infrastructure investors and LNG end users as our partners," said Michael S. Smith, Chief Executive Officer, Freeport LNG.
Mr. Smith continued, "This expansion will further the substantial economic growth opportunities in Texas and across the United States derived from the project. With the addition of a third train, the economic benefits derived from the project will be even greater. At peak construction, the project will employ a workforce of over 5,000 workers and 300 new full-time workers once the facility is in operation. In addition, an estimated 30-40,000 permanent new jobs will be generated upstream of the project to support the increased natural gas exploration, production and infrastructure development required to meet the project’s supply demands. Exports from the Freeport LNG project offer substantial geopolitical benefits as well, providing secure energy supplies to our key allies around the world and resulting in more than a 1% reduction in the U.S. trade deficit."
