EnLink Midstream LLC struck a 20-year, fixed-fee agreement for natural gas transportation services with Venture Global LNG to supply its planned Calcasieu Pass LNG export facility in Louisiana.
EnLink expects to spend about $20 million in growth capital expenditures on the agreement, which would mostly be logged during 2020, the company announced in its Aug. 6 earnings release. The deal is also expected to generate an adjusted EBITDA multiple of between 1x and 2x.
The company expects to begin operations on the project associated with the deal in 2021, contingent on Venture Global making a positive final investment decision on Calcasieu Pass. Analysts expect the decision to be announced by the end of the quarter, if not sooner.
Venture Global is in the late stages of completing debt financing for Calcasieu Pass, having secured financing commitments of over $10 billion to help fund the project's construction and commissioning. Previously, Venture Global received a $1.3 billion equity investment from the private equity firm Stonepeak Infrastructure Partners.
The Calcasieu Pass facility in Cameron Parish, La., would be capable of producing 10 million tonnes per annum of LNG using midscale, modular liquefaction trains. It is slated to begin commercial operations in 2022.