Master Limited Partnerships Tempt US Export Players

20 Mar 2014: Five US liquefaction proponents with non-free trade country export authorization are in the throes of courting financiers to fund their projects. Freeport LNG in Texas is the latest to announce financing with a $1.2 billion capital injection from Chubu Electric and Osaka Gas, the two tolling customers in train 1, in the form of equally split equity funding for the 4.4 MMt/y unit. The first train is now expected to cost about $5 billion while the 13.2 MMt/y project’s total price tag has risen from $11 to $14 billion. In addition to the main $5 billion construction contract for the first two trains, there is $1 billion in refinancing and another $1 billion in owner’s costs and roughly $2.5 to $3 billion of interest during construction on these units. The third train will cost another $4 billion. While Freeport chose funding from its offtakers, the playbook for equity at Cheniere Energy’s 18 MMt/y Sabine Pass Liquefaction in Louisiana was issuing common units on a US stock exchange in a master limited partnership that continues to provide public investors an opportunity to invest in LNG. MLPs are common in LNG shipping, and 2013 was a record year for MLP public offerings in the US. At least three projects are now plotting to use MLPs to help finance US liquefaction capacity. Download here