Cheniere also announced that in connection with the 1.4-billion cubic feet per day (Bcf/d) expansion of its LNG receiving terminal, Sabine Pass LNG has awarded an engineering, procurement, construction, and construction management contract to Bechtel Corp., an engineering, procurement and construction (EPC) contract to Zachry Construction Corp. and Diamond LNG LLC--a subsidiary of Mitsubishi Heavy Industries Ltd., and an EPC contract to Remedial Construction Services, L.P. Cheniere expects to issue each contractor a notice to proceed by August 1, 2006.
Cheniere commenced construction on the Sabine Pass LNG receiving terminal in March 2005. Located in western Cameron Parish, La., initial start-up of the base 2.6-Bcf/d facility is targeted for early 2008. In June 2006, the Federal Energy Regulatory Commission authorized Cheniere to expand the terminal's capacity by 1.4 Bcf/d to 4.0 Bcf/d, and on July 20, 2006, it issued authorization for Cheniere to commence construction of the expansion. The expansion is slated for completion in 2009.
HSBC Securities (USA) Inc. and Societe Generale Corporate & Investment Banking, served as joint lead arrangers and joint bookrunners for the credit facility, which was syndicated to 31 financial institutions.
In connection with the closing of the Credit Facility, Sabine Pass LNG has entered into interest rate swap agreements with HSBC Bank (USA), NA and Societe Generale, New York Branch. Under the terms of the swap agreements executed on Friday and in February 2005, Sabine Pass LNG has hedged the LIBOR interest rate component of its drawings under the credit facility up to a maximum amount of $1.25 billion.
The material terms and conditions of the credit facility, the swap agreements, and the EPC contracts will be described in a current report on Form 8-K to be filed with the Securities & Exchange Commission.
Cheniere is developing a platform of three 100% owned LNG receiving terminal projects along the U.S. Gulf Coast. The three terminals will have an aggregate send-out capacity of 9.9 Bcf/d. Cheniere plans to leverage its terminal platform by pursuing related LNG business opportunities both upstream and downstream of the terminals. Cheniere is also the founder and holds a 30% limited partner interest in a fourth LNG receiving terminal, is a partner in an LNG shipping venture, and engages in oil and gas exploration in the shallow waters of the U.S. Gulf of Mexico.
Cheniere is based in Houston, Texas, with offices in Johnson Bayou, La., and Paris, France.
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