Cheniere Takes FID on Sabine Pass Train 6 (Correction)

(Corrects identity of upstream seller)

US LNG developer Cheniere Energy said June 3 it has finalised a new capital allocation plan, a key feature of which is the final investment decision (FID) on Train 6 at its Sabine Pass LNG export terminal in Louisiana.

The capital allocation plan prioritises the reinvestment of cash flows to grow Cheniere’s LNG complex, targets improved credit metrics and promises a return of excess capital to shareholders.

The company expects to generate some $9bn of available cash through the first half of 2024, and the new capital allocation plan covers the period until then.

“The capital allocation framework we announced today prioritises continued investment in our LNG platform through new high-return growth projects, beginning with Sabine Pass Train 6, on which we have made a positive FID and have issued full notice to proceed to Bechtel,” Cheniere CEO Jack Fusco said.

To fund the 4.5mn mt/yr Train 6 – and construction of a third berth – at Sabine Pass, Cheniere Energy Partners entered into 5-year, $1.5bn senior secured credit facilities with 29 banks and financial institutions in a transaction that closed May 29.

In a separate announcement also June 3, Cheniere said it has entered into a long-term gas supply agreement with US producer Apache for 140,000 mn Btu/day of natural gas to Cheniere’s Corpus Christi Stage 3 project in Texas. The LNG associated with this supply – about 0.85mn mt/yr – will be marketed by Cheniere.

Under terms of the gas sales agreement, Apache will receive an LNG price, net of a fixed liquefaction fee and certain costs incurred by Cheniere, for the natural gas delivered to Corpus Christi. The LNG price is based on international LNG indices.

Corpus Christi Stage 3 is being developed to include up to seven mid-scale liquefaction trains with a total nominal production capacity of about 9.5mn mt/yr. It received its final environmental assessment from the Federal Energy Regulatory Commission in March 2019 and expects to receive all other regulatory approvals by the end of this year.