Summary
Cheniere Energy, Inc. (LNG) filed an 8-K on July 24, 2006, detailing significant financing and construction agreements for the expansion of its Sabine Pass LNG terminal. The company's wholly-owned subsidiary, Sabine Pass LNG, L.P., secured a First Amended and Restated Credit Agreement, increasing available loans from $822 million to $1.5 billion. This financing is earmarked for expanding the terminal's regasification capacity from 2.6 Bcf/d (Phase 1) to 4.0 Bcf/d (Phase 2). In conjunction with the credit agreement, Sabine entered into three key construction agreements to support the Phase 2 expansion. These include an EPCM agreement with Bechtel for overall project management and construction, a Tank Contract with Zachry Construction Corporation and Diamond LNG LLC for the construction of two new LNG tanks, and a Soil Contract with Remedial Construction Services, L.P. for soil remediation. These agreements represent a substantial commitment to increasing Cheniere's LNG infrastructure and operational capacity.
Key Highlights
- 1Sabine Pass LNG, a subsidiary of Cheniere Energy, amended its credit agreement, increasing total loan commitments to $1.5 billion from $822 million.
- 2The expanded financing is designated for the expansion of the Sabine Pass LNG terminal from 2.6 Bcf/d to 4.0 Bcf/d of regasification capacity (Phase 2).
- 3Three key construction agreements were executed with Bechtel (EPCM services), Zachry/Diamond LNG (tank construction), and Remedial Construction Services (soil remediation) for Phase 2.
- 4The Amended Credit Agreement has a final maturity date of July 1, 2015, with semi-annual principal repayments starting around October 1, 2009.
- 5Interest rates on borrowings under the credit agreement are variable (LIBOR plus a margin of 0.875% to 1.125%).
- 6Interest rate swap agreements were entered into to fix the LIBOR component on borrowings up to $1.25 billion at a blended rate of 5.26% until July 1, 2015.