Cheniere to get $2.5 billion for Texas LNG export terminal
By TINA DAVIS
Bloomberg
Cheniere Energy has found buyers for $2.5 billion in convertible notes that will help fund construction of its Corpus Christi, Texas, facility to export natural gas from booming US shale production.
EIG Management and RRJ Capital II will buy the notes, which can be converted into common stock in Cheniere, the Houston-based company said in two separate statements today.
RRJ will have the right to transfer a portion of the $1 billion in notes it’s buying to Temasek Holdings, Singapore’s state-owned investment company.
The Corpus Christi facility would be Cheniere’s second project, after Sabine Pass, to export natural gas from shale-rock formations. Gas producers are seeking new markets for the fuel as US output reached a record 66.7 billion cubic feet/day last year.
By cooling the gas to minus-270 degrees Fahrenheit, it can be reduced to a liquid state for shipment overseas by tankers.
“We are continuing to make progress on our Corpus Christi liquefaction project and expect to commence construction in early 2015,” Charif Souki, CEO of Cheniere, said in the statements.
The announcement marks the second investment in Cheniere by RRJ and Temasek, which joined forces in May 2012 to buy shares in the company for about $468 million. Temasek sold 9.2 million shares last year after the stock price tripled. Former Goldman Sachs partner Richard Ong runs RRJ with his brother Charles, who was previously chief investment officer for Temasek.
Blackstone Investment
The latest investment will be from RRJ’s $3.6 billion second Asia fund, amassed last year after an initial pool of $2.3 billion raised in 2010. RRJ has offices in Singapore and Hong Kong, where most of its investment professionals are based.
Cheniere signed a 2012 deal for $2 billion in funding from Blackstone Group for the Sabine Pass terminal, which is under construction and would be the first to export US shale gas.
Cheniere gained 1% to $72.75 at 9:39 a.m. in New York. The shares have climbed 68% this year.
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