Construction to begin on Brazoria County LNG export plant

BRAZORIA COUNTY – Freeport LNG has secured financing for two of three natural gas liquefaction units, clearing the way for construction to begin on one of only a handful of natural gas export terminals authorized by federal regulators.

The privately owned company plans to pay for most of the project — about $8.4 billion — with loans from an array of Japanese banks. The remaining $2.5 billion will come from two Japanese companies — Osaka Gas Co. and Chubu Electric Power Co.

The first of the production units, called trains, is scheduled to be operating by third quarter 2018. The second is to come online five months later.

The debt and equity financing commitments add up to nearly $11 billion. That’s $1.4 billion more than the two trains are expected to cost, giving Freeport LNG a buffer for potential cost overruns, the company said.

At its peak, construction will generate more than 4,000 jobs. Once open, the plant will employ 300 full-time workers.

Freeport LNG received final approval from federal regulators earlier this month to export domestically produced liquefied natural gas to countries that do not have free trade agreements with the United States. Each train has the capacity to produce 4.6 million tons of LNG per year.

The company has secured use-or-pay tolling arrangements with Osaka Gas, Chubu Electric, BP Energy Co., Toshiba Corp. and SK E&S LNG for 13.2 million tons per year.