Final investment decision reached for Cameron LNG Liquefaction-Export Project

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Final investment decision reached for Cameron LNG Liquefaction-Export Project

Sempra Energy announced that the Cameron Liquefaction Project sponsors, Sempra LNG, GDF Suez SA, Mitsui & Co. and Mitsubishi Corp., through a related company jointly established with Nippon Yusen Kabushiki Kaisha (NYK), each have approved a final investment decision for the development, construction and operation of the natural gas liquefaction and export project planned at the site of Sempra Energy's Cameron LNG receipt terminal in Hackberry, Luisiana, USA.

The total project cost is estimated at approximately US$10 billion, including contribution of the existing Cameron LNG facilities, construction of the new facilities and financing cost. Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group and Mizuho Bank are three of the thirty banks that will provide about US$5 billion in commercial debt, with the Japan Bank for International Cooperation supplying US$2.5 billion. Nippon Export and Investment Insurance (NEXI), HSBC, Societe Generale and ING are also contributing to the commercial tranche.

The three-train natural gas liquefaction facilities will have an export capability of 12 million tonnes per annum of liquefied natural gas (LNG) from USA to Japan, or approximately 1.7 billion cubic feet per day. Subject to final regulatory approval, satisfaction of conditions of the initial equity funding and first disbursement of the financing, construction on the project is expected to begin later this year. All three trains are expected to commence operations during 2018, with the first full year of operations in 2019.

Earlier this year, Cameron LNG received authorization from the Federal Energy Regulatory Commission to site, construct and operate the liquefaction facilities and was awarded conditional authorization from the U.S. Department of Energy (DOE) to export LNG to non-free-trade-agreement (non-FTA) countries, including Japan and European nations. A final authorization from DOE is expected later this year.

Sempra Energy owns 50.2% of the Cameron facility while Mitsui & Co. owns 16.6%, GDF Suez SA owns 16.6%, and the joint venture NYK Line & Mitsubishi Corp. own the remaining 16.6%.

Japanese firms have agreed to buy 8.8 million tons of production. Japan aims to secure U.S. energy supplies. This is the first of three U.S. LNG projects from which Japanese companies plan to buy the fuel. LNG has become an important fuel source for the country since the 2011 Fukushima Daiichi nuclear-power disaster.

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