Blackstone to finance Cheniere natural gas exports project

Cheniere Energy Partners will receive $2 billion in financing from The Blackstone Group to fund the construction of a natural gas export plant in southern Louisiana. The existing facility was built to import natural gas, but huge increases in production of natural gas from shale formations under several states has created a glut of natural gas in the United States. Now Cheniere and others are hoping to export natural gas to markets that pay prices up to 5 times higher. Cheniere has lined up international customers for the natural gas and received approval from the Department of Energy to export it. The company is still awaiting approval from the Federal Energy Regulatory Commission to begin construction. If Cheniere gets approval, it plans to make a final investment decision on the project and begin construction later this year. Construction is expected to take two to three years. Natural gas must be chilled to a liquid before it can be shipped. That requires so-called trains of machinery and equipment to remove impurities and chill the gas to minus-260 degrees Fahrenheit before the liquefied natural gas can be loaded onto specialized tankers and shipped abroad. Not including financing charges, Cheniere says it will cost $4.5 billion to $5 billion to build the first two of four trains planned for the site. Cheniere hopes to export 2.6 billion cubic feet of gas per day, about 4% of daily U.S. production. Cheniere stock was up 13.8% to $15.99 in premarket trading on the news.