Western LNG secures US$150mn to support Ksi Lisims LNG

Western LNG, the Houston-based developer leading the proposed 12mn tonnes/year Ksi Lisims LNG project in northern BC, said January 14 it had completed a US$150mn private placement of equity securities to support the development of both Ksi Lisims and the Prince Rupert Gas Transmission (PRGT) project.

The private placement was anchored by a commitment from Blackstone Energy Transition Partners, an affiliate of Blackstone. With more than US$1.1 trillion in assets under management, Blackstone’s participation “underscores investor confidence in the viability and strategic importance of Ksi Lisims LNG and PRGT,” Western LNG said in a statement.

“Blackstone’s anchor investment in this private placement demonstrates its confidence in the Ksi Lisims LNG and PRGT projects and confirms that our approach to delivering responsible, net-zero-ready energy infrastructure is aligned with market demand,” Western LNG CEO Davis Thames said. “Ksi Lisims LNG and PRGT are designed to meet or exceed Canada’s rigorous environmental standards and will help meet global energy needs while driving regional prosperity.”

Blackstone’s support, he added, positions Western LNG to proceed to a final investment decision (FID) on Ksi Lisims LNG later this year and construction of both projects.

Western LNG also received significant commitments in the private placement from affiliates of Jefferies Financial Group, Transition Equity Partners, and other new and existing private investors.

Proceeds will support continued discussions with participating indigenous nations, the completion of front-end engineering for Ksi Lisims LNG and PRGT, and the completion of environmental and regulatory permitting and compliance for both projects. This funding also allows Western to substantially increase staffing levels for both projects this year.

Blackstone and the other participants also secured equity investment rights at FID in Ksi Lisims LNG. These rights, combined with similar rights already secured by Stonepeak, secures all of the equity capital needed to commence construction upon the project reaching FID.

Earlier this month, Ksi Lisims LNG, which is a partnership of Western LNG, Rockies LNG (a consortium of western Canadian gas producers) and Nisga’a Nation, signed the liquefaction project’s first LNG offtake agreement, a 20-year sale and purchase agreement (SPA) with Shell Eastern Trading. Under the SPA, Shell will purchase 2mn tonnes/year from Ksi Lisims LNG on a free-on-board basis.

The BC Environmental Assessment Office (EAO) has released a draft assessment report of Ksi Lisim LNG’s application for an environmental certificate and is now collecting public comment before finalising its assessment report and submitting it to provincial and federal environment ministries later this year.

Meanwhile, PRGT’s request for a substantial start determination by the EAO is expected this spring. That determination would extend PRGT’s existing environmental approval, first issued in 2014, and avoid the necessity of a new environmental assessment.