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FLNG Makes Final Investment Decision on Train One
= Chubu Electric and Osaka Gas to invest 25% each =
Chubu Electric and Osaka Gas announced on October 30 that FLNG Liquefaction, LLC (FLIQ1) that is promoting development of the train one of Freeport LNG project in Texas, USA. made a final investment decision (FID). Upon the FID, the two Japanese companies are to make first investment to acquire 25% equity of FLIQ1.

Earlier on October 29 in Houston, U.S.A., Freeport LNG Expansion LP (Freeport LNG) announced that FLIQ1executed the loan agreements for approximately US$3.85 billion, in project finance scheme, with the Japan Bank for International Cooperation (JBIC) and six commercial banks including Bank of Tokyo Mitsubishi UFJ, Mizuho and Sumitomo Mitsui.

According to JBIC, its loan amount is approximately US$2.60 billion and the balance, insured by Nippon Export and Investment Insurance (NEXI), will be from the six banks. The insurence by NEXI covers the risk of revocation of the orders permitting the export of LNG.

Chubu Electric and Osaka Gas each concluded a toll liquefaction contract for 2.2 million tonnes per year of LNG with FLIQ1 that will produce 4.4 million tpy of LNG at the train one. The two Japanese companies entered into an agreement with Gulf South Pipeline Company, LP, which is one of the major pipe-line companies in the USA. The agreement enables Osaka Gas and Chubu Electric to procure natural gas from the major sources located in the USA.

Freeport LNG is planning to also announce soon execution of the loan agreements by its subsidiary, FLNG Liquefaction 2 LLC that is promoting development of the train two of the project.

The loan agreements for train one and two will allow Freeport LNG to commence construction of the two trains most probably in November upon receipt of a final authorization from the Department of Energy to export LNG, since it already received this month an approval from the U.S. Federal Energy Regulatory Commission (FERC) to start construction. Financial close and commencement of construction on train three is expected in the first half of 2015.

The project plans to build three trains of 4.4 million tpy capacity each. Two American companies, CB&I and Zachry Industrial have been appointed as the constructors for the trains one and two.

Construction period for train one is estimated about 45 months, enabling it to start-up in 2018, and train two is scheduled to start-up 6 months later. In 2019, train three will join, making the project's total liquefaction capacity to 13.20 million tpy. The capacity has been committed on a toll-liquefaction basis to Chubu Electric and Osaka Gas for train one, to BP for train two and to Toshiba and SK E&S LNG for train three.
last modified : Thu 06 Nov, 2014 [11:25]
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