US player Cheniere Energy will move forward with construction on a sixth train at its flagship Sabine Pass liquefied natural gas export facility in Louisiana after reaching a final investment decision, writes Caroline Evans.

The company has issued a notice to proceed to Bechtel, which holds the engineering, procurement and construction contract for the project, chief executive Jack Fusco confirmed.

Analysts at Tudor Pickering Holt expect the project timeline to be similar to that of the third train at Cheniere's Corpus Christi LNG site in Texas, which is expected online around three years after its May 2018 project sanction. To fund Train 6 construction as well as the proposed phase three expansion at the company's Corpus Christi LNG facility, Cheniere announced a new capital allocation framework.

The new policy allows Cheniere to take more than 50% equity investments in Sabine Pass Train 6 and Corpus Christi Stage 3 over five years.

In addition, Cheniere has entered five-year, $1.5 billion senior credit facilities with 29 banks and financial institutions to fund Train 6 and a third LNG berth at Sabine Pass.

The new capital allocation framework also includes a three-year, $1 billion share repurchase programme. "We believe the framework will also strengthen the balance sheets across our corporate structure, which is vital to our sustained growth, and enables us to return excess capital to shareholders through share repurchases," Fusco said.

Cheniere also raised its run-rate production guidance to between 4.7 million and 5 million tpa per train from 4.4 million to 4.9 million tpa.

"The increase in run-rate production is based on the impact of production optimisation, maintenance optimisation, and debottlenecking projects at both the Sabine Pass project and Corpus Christi project," the company said.

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Sixth train gets go-ahead at Sabine Pass