Temasek, RRJ to invest US$468 mln in US LNG plant

May 08, 2012

HONG KONG, May 8 — Singapore state investor Temasek Holdings and Asia-based private equity firm RRJ Capital have agreed to invest US$468 million (RM1.4 billion) in Cheniere Energy to help the US energy firm fund the country's first liquefied natural gas export plant.

Houston-based Cheniere, which has regulatory approval to build the project and has been seeking financing before construction can begin, plans to use the capital to help fund the proposed LNG export plant in Louisiana, the companies said in a statement on Monday.

Cheniere has said it planned to build the LNG plant at Sabine Pass that would chill cheap US natural gas into a liquid for shipping overseas, by 2015. It would be the first of its kind built in the United States in nearly 50 years.

Temasek and RRJ are also in discussion to help Cheniere market and sell LNG to Asia, the statement said.

"We look forward to working with both Cheniere and RRJ Capital and others to tap into opportunities in Asia, which are driven by the energy demand of growing middle income populations and continued urbanization," Greg Lanham, a Temasek Managing Director, said in the statement.

Customers across the globe — from Europe to India to South Korea -- have signed up for supply from Sabine Pass, bringing Cheniere closer to securing financial backing. In February, private equity firm Blackstone Group LP said it would invest US$2 billion in Cheniere Energy Partners to help fund the plant's construction.

Natural gas in Europe and Asia is up to seven times more expensive than the United States where record production from newly developed shale deposits has pushed prices to 10-year lows.

Low prices have prompted a string of US export proposals over the past year as producers and developers look to make the most of higher prices overseas.

Cheniere will use the investment and cash on hand to buy US$500 million of the US$2 billion of equity securities to be issued by Cheniere Energy Partners LP, the investment vehicle of the LNG project, the statement said.

Cheniere Energy Partners, which owns 100 per cent of the Sabine Pass LNG project, is a master limited partnership (MLP) run by Cheniere Energy. Cheniere Energy owns 88.8 per cent of the partnership.

Temasek and RRJ Capital will take a combined 19.8 per cent stake in Cheniere Energy Partners, a source close to the deal told Reuters. — Reuters