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Freeport firms up $1bn loan for Train 4

Chief executive Michael Smith said final investment decision eyed in next several months

US liquefied natural gas player Freeport LNG has firmed up a loan from Westbourne Capital to fund an additional fourth train at the company’s export facility in Texas.

The up to $1.025 billion mezzanine loan, along with a contemplated bank facility, "will be sufficient to provide 100% of the capital required for Train 4", Freeport said.

"We are happy to continue to progress our Train 4 expansion with an eye towards FID in the next several months," chief executive Michael Smith said in a statement.

"The Westbourne-led consortium have all been very supportive investors of Freeport in the past and we are excited to do more with them to grow the company."

The facility on Quintana Island initially included three liquefaction trains with a total capacity of 15 million tonnes per annum. The fourth train would add an additional 5 million tpa.

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Last week, the private LNG player shipped is first commissioning cargo from the facility on Quintana Island. The shipment was around 150,000 cubic metres and was loaded onto the tanker LNG Jurojin.

The fourth train has already cleared several regulatory hurdles, even as the whole project has been hit with construction delays.

Freeport was recently granted approval by the Federal Energy Regulatory Commission to site, construct, and operate the fourth train. Additionally, earlier in 2019 the Department of Energy issued an order granting Freeport the right to export LNG volumes to countries with which the US does not have a free trade agreement.

The company has also selected US contractor KBR for a fixed-price contract to provide engineering, procurement, construction, commissioning and start up of the fourth train.

Freeport’s second train is expected to be in service by January 2020, as it advances through the pre-commissioning phase. The third train is anticipated to be in service by May 2020.

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