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Cheniere Energy Partners entered into an exclusive arrangement with Blackstone Energy Partners LP, Blackstone Capital Partners VI LP and certain affiliates to finalize and execute definitive agreements under which Blackstone would purchase newly issued Cheniere Partners senior subordinated paid-in-kind units for $2 billion.
Cheniere Partners would use the proceeds to fund the equity portion of the costs of developing, constructing and placing into service its Sabine Pass liquefaction project being developed at the Sabine Pass LNG terminal, the purchase of the Creole Trail Pipeline from Cheniere Energy Inc. and other partnership business purposes.
The cost for the construction of the first two trains is currently estimated to be $4.5 billion to $5.0 billion, before financing costs. The debt financing for the liquefaction project is expected to be completed by the end of the first quarter.
Construction is expected to commence in the first half of 2012. The purchase of the Creole Trail Pipeline is expected to close concurrently with the closing of the financing. The closing is subject to, among other things, the execution of definitive documents, receipt of regulatory approvals required to permit commencement of construction of the liquefaction project, closing of the purchase of the Creole Trail Pipeline, closing of the debt financing for the first two trains and other conditions necessary to complete the transaction
Cheniere Partners expects a final investment decision for the development and construction of the first two of four liquefaction trains in the first quarter. Currently, the company is awaiting approval by the Federal Energy Regulatory Commission for the liquefaction plant.
The parties contemplate that the board of directors of Cheniere Partner's general partner would consist of 11 members, including four directors appointed by Blackstone, four directors appointed by Cheniere Energy and three independent directors.
"Obtaining this financing will be a significant milestone for the advancement towards construction of the first two liquefaction trains. Blackstone is one of the world's largest private equity investors, with significant experience in the energy sector and a history of successful development of large scale energy projects," said Charif Souki, Cheniere’s chairman and chief executive officer. "We expect to obtain the remaining financing needed to fund the first two trains by the end of the first quarter and to commence construction in the first half of 2012."