US liquefied natural gas player Freeport LNG has secured a $1.2 billion equity funding agreement with Osaka Gas and Chubu Electric to finance its proposed LNG facility on Quintana Island near Freeport, Texas.
The Houston-based venture said that the Japanese pair’s investment would provide the equity needed to develop the first of the three planned trains at the facility.
Freeport LNG chief executive Michael Smith said that the first two trains were now fully funded between Thursday’s deal and last December’s $1.3 billion equity investment by IFM Investors in the second train.
Investment capital from the Japanese duo will be drawn down over the first train’s planned 45-month construction period, Freeport LNG said.
The balance of capital set to come from a consortium of lenders comprised of a Japanese government financial agency and commercial banks, the company added.
Osaka Gas and Chubu Electric have already signed up to buy the equivalent of the minimum guaranteed production volumes from the first train from the project under a 20-year deal signed in 2012.
Construction is planned to start on the first two trains in the second half of this year pending approvals and a final investment decision.