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6th train at Cheniere's Sabine Pass gets positive final investment decision

Cheniere Energy Partners LP made a final investment decision to proceed with the construction of the sixth train at its Sabine Pass natural gas liquefaction and export facility in Louisiana.

The Cheniere Energy Inc. subsidiary gave project contractor Bechtel Oil Gas and Chemicals Inc. full notice to proceed with construction, according to a June 3 news release.

Cheniere Energy Partners also struck five-year senior secured credit facilities with 29 banks and financial institutions providing $1.5 billion in funds for the project construction, as well as a third LNG berth and other supporting infrastructure. The deals closed May 29 and include a $750 million delayed draw term loan and a $750 million revolving credit facility.

In addition, Cheniere Energy Partners increased its run-rate production guidance per train to between 4.8 million tonnes per annum and 4.9 mtpa, from a range of 4.5 mtpa and 4.9 mtpa. The partnership attributed the guidance change to impacts of production and maintenance optimization and debottlenecking projects at Sabine Pass.

As a result, Cheniere Energy Partners' run-rate distributable cash flow was also raised to $3.70 to $3.90 on an annual basis, from $3.30 to $3.60.

SG Americas Securities LLC served as financial adviser to Cheniere Partners for the credit facilities transactions and MUFG Bank Ltd. acted as sole coordinating lead arranger.

Separately, Cheniere's other subsidiary, Cheniere Corpus Christi Liquefaction Stage III LLC, signed a gas supply agreement with oil and gas producer Apache Corp. providing for 140,000 MMBtu/d of natural gas to an expansion of Cheniere's Corpus Christi export terminal in Texas under a 15-year term.

The LNG associated with the gas supply is equivalent to about 0.85 mtpa and would be marketed by Cheniere, according to a separate June 3 release. The supply would feed Cheniere's Corpus Christ Stage III expansion project. Apache would sell the gas for an LNG price based on international LNG indices, net of a fixed liquefaction fee and certain costs incurred by Cheniere.

The deal allows Apache to access global LNG pricing and diversify its customer base and cost structure, Cheniere and Apache executives said in the release. It also provides new markets for Alpine High-produced gas, according to Apache CEO and President John Christmann IV.

Corpus Christi Stage III involves the construction of up to seven mid-scale liquefaction trains, expected to be capable of producing about 9.5 mtpa. The project received a positive environmental assessment from the Federal Energy Regulatory Commission in March.