February 27, 2012 / 7:00 AM / 8 years ago

UPDATE 2-Blackstone to invest $2 bln in Cheniere Energy

Feb 27 (Reuters) - Cheniere Energy Partners said private equity giant Blackstone Group LP will invest $2 billion to help the company build a gas-liquefaction plant in Sabine Pass, Louisiana.

As per the deal, Blackstone will buy newly-issued Cheniere senior subordinated paid-in-kind units. Cheniere will use the proceeds to fund the equity portion of the costs of developing and constructing the plant and the purchase of the Creole Trail pipeline from its general partner Cheniere Energy Inc.

Houston-based LNG developer Cheniere said the debt financing for the project is expected to be completed by the end of the first quarter. Construction is expected in the first half of 2012.

The company is developing the first two of four liquefaction trains. The cost for the construction of the first two trains is expected to be $4.5 billion to $5 billion.

As per the deal, Blackstone will also appoint four directors to the board of the company’s general partner Cheniere Energy.

U.S. producers and liquefied natural gas (LNG) shippers are scrambling to develop export plants after a sudden surge in domestic natural gas production, thanks to shale gas, swamped the market and pushed gas prices way below global levels.

In December, Cheniere Energy had proposed to build a second LNG export plant on the U.S. Gulf Coast, after buyers across the world lined up to buy the cheap American fuel.

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