Cheniere hires banks for debt financing of LNG project
(Reuters) - Cheniere Energy (LNG.A) has engaged eight financial institutions to raise up to $4 billion in debt to help finance the construction of its proposed liquefied natural gas export plant in Louisiana.
Houston-based Cheniere plans to build the LNG plant at Sabine Pass that would chill cheap U.S. natural gas to a liquid for shipping overseas by 2015, pending regulatory approval. It would be the first of its kind built in the United States in nearly 50 years.
"Obtaining financing is one of the last steps to complete before proceeding with the construction of the first two liquefaction trains being developed at the Sabine Pass LNG terminal," Cheniere Chief Executive Charif Souki said in a statement.
The financers include Bank of Tokyo-Mitsubishi UFJ, Credit Agricole Corporate and Investment Bank, Credit Suisse Securities CEBA.CH, HSBC, J.P. Morgan Securities JPMBSB.UL, Morgan Stanley (MS.N) , RBC Capital Markets, and SG Americas Securities.
Cheniere is awaiting final environmental approval, which could come as early as Thursday when the Federal Energy Regulatory Commission (FERC) votes on whether to pass the project. The company already has government approval to ship gas overseas.
If approved, and financing is secured, construction could begin within weeks, depending on the conditions imposed by FERC.
Natural gas in Europe and Asia is up to seven times more expensive than the United States where record production from newly developed shale deposits has pushed prices to 10-year lows.
Low prices have prompted a string of U.S. export proposals over the past year as producers and developers look to make the most of higher prices overseas.
Customers across the globe -- from Europe to India to South Korea -- have signed up for supply from Sabine Pass, bringing Cheniere closer to securing financial backing. In February, private equity firm Blackstone Group LP (BX.N) said it would invest $2 billion in Cheniere Energy Partners to help fund the plant's construction.
The project has been in the limelight in recent months as consumers and gas producers debate the benefits and drawbacks of exporting an abundant domestic resource. The U.S. government said in January that exporting natural gas could add between 3 and 9 percent a year to prices over the next two decades.
(This has been corrected throughout to show that Cheniere has hired banks to secure financing for Sabine Pass, but has not yet secured financing)
(Reporting By Swetha Gopinath in Bangalore and Edward McAllister in New York, editing by Dave Zimmerman and Gunna Dickson)
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