Hunton & Williams LLP has successfully represented Japan Bank for International Cooperation (JBIC), Nippon Export and Investment Insurance (NEXI), and a group of commercial banks on a $4.369 billion senior secured project debt finance, letter of credit, and working capital facilities to finance the construction and operation of Train 1 of a multi-train natural gas liquefaction and export facilities project to be located on Quintana Island near Freeport, Texas.
The Train 1 project will be constructed, operated, and owned by Freeport LNG Expansion LP, Osaka Gas Co. Ltd., and Chubu Electric Power Co. Inc.
Osaka Gas and Chubu Electric, two of Japan’s largest utilities, will offtake and export the full capacity of the Train 1 liquefied natural gas (LNG) production under long-term contracts. The Train 1 facilities are part of a planned three‐train LNG production and export facility being developed by Freeport LNG. The Train 1 debt and equity financing transactions closed and funded on Nov. 25, concurrently with the Freeport LNG Train 2 debt and equity financing transactions. The transactions reportedly represent the largest fully non-recourse project construction financings to have ever occurred.
JBIC is contributing 70% of the Train 1 project debt financing, with the remaining 30% of project debt financing being provided under NEXI insurance cover by Mizuho Bank Ltd., Sumitomo Mitsui Banking Corp., The Bank of Tokyo-Mitsubishi UFJ Ltd., Sumitomo Mitsui Trust Bank Ltd., Mitsubishi UFJ Trust and Banking Corp., and ING Bank NV.
The proposed three-train LNG production and export terminal facilities, which are an expansion of Freeport LNG’s existing LNG import terminal and regasification facility, are designed to provide an LNG export capacity of approximately 13.2 million metric tonnes per annum (mmtpa).
The LNG production and export project is expected to add long-term support to US shale plays and other natural gas-producing regions, including Texas and the Gulf Coast, and significant benefits for the state’s economic and employment growth.
The Hunton & Williams team was led by Raj Pande and included energy and infrastructure lawyers Ellis M. Butler, Laurence E. Skinner, Kevin C. Felz, Miki Kondo, Timothy R. Coughlin, W. Benjamin Falk, Henry H. Jin, Grétel Martínez, and John Papaspanos; regulatory and environmental lawyers Mark W. Menezes, Kevin J. Finto, Karma B. Brown, and Eric M. Hutchins; real estate lawyers Howard E. Schreiber and Michael E. Sievers; bankruptcy lawyer Gregory G. Hesse; finance and banking lawyers Thomas A. Rice and Luppe B. Luppen; and litigation lawyers John Jay Range and Carter T. Coker.