Cheniere and EIG have decided to move ahead with the construction of their indirectly and jointly owned Midship Pipeline Project, a 321km long natural gas pipeline in Oklahoma, US, having securing financing for the project.
Image: Cheniere, EIG complete financing for Midship Pipeline Project. Photo: courtesy of xedos4/FreeDigitalPhotos.net.
The partners have issued a notice to proceed to Strike, M.G. Dyess, TRC Pipeline Services, and Cenergy to construct the $1bn Midship Pipeline Project along with its related compression and interconnect facilities.
For completing the financing of the project, Cheniere and EIG entered into senior secured credit facilities with total commitments of up to around $680m. The credit facilities include a construction loan facility of about $615m and a $65m revolving credit facility.
Cheniere said that the proceeds from the credit facilities will be utilized for funding a part of the costs of developing, constructing, and commissioning of the Midship Pipeline Project, to fund working capital requirements, and other purposes.
The pipeline, which will have a firm transportation capacity of up to 1,440,000 Dekatherms per day, is expected to be commissioned by the year end.
It will source natural gas from the STACK and SCOOP resource plays in the Anadarko Basin in Oklahoma and deliver it to the emerging Gulf Coast and Southeast markets.
Earlier this month, the natural gas pipeline secured final notice to proceed from the US Federal Energy Regulatory Commission (FERC).
The Midship Pipeline Project comprises a 36inch diameter new mainline pipeline, various laterals, compressor stations and interconnects that will collect gas from STACK and SCOOP processing plants and deliver it to Bennington, Oklahoma, and also to downstream markets such as the TexOk hub near Atlanta, Texas, and the Perryville Hub near Tallulah in Louisiana.
The natural gas pipeline is underpinned by commitments from subsidiaries and/or affiliates of Cheniere, Devon Energy, Marathon Oil and Gulfport Energy.
The mainline of the Midship Pipeline Project will start from the existing Okarche gas processing plant in Kingfisher County and extend in south-south-eastern direction via the Canadian, Grady, Garvin, Stephens, Carter, and Johnston counties before terminating at the new Bennington compressor station in Bryan County.
Overall, the natural gas pipeline project is expected to create up to 1,300 jobs during its construction phase.