Financing close for $7.5 billion Cameron LNG Project

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Financing close for $7.5 billion Cameron LNG Project

The Cameron LNG project has secured a US$7.5 billion loan to develop the facilities to ship about 12 million tons of liquefied natural gas per year from Louisiana (USA) to Japan.

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 the remaining US$2.5 billion. HSBC, Societe Generale and ING are also contributing to the commercial tranche.

According to Bloomberg, the loan will have a term of 16 years, and its guaranteed portion will initially pay 125 basis points over Libor while the non-guaranteed part will pay 175 basis points more than Libor.

Nippon Export and Investment Insurance (NEXI) will guarantee US$2 billion of the private sector debt.

The total project investment is estimated at US$10 billion. Construction of the project is planned to start in 2014. The project is expected to be operational by 2018.

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%.

The LNG project in Hackberry, Louisiana (USA), will use several of Cameron LNG’s existing facilities, and will have three liquefaction trains. The project will be able to export approximately 1.7 billion cubic feet per day of LNG.

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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