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Freeport,TX: King & Spalding Advises Freeport LNG on Tolling Agreements, USA

King & Spalding’s global energy practice has advised Freeport LNG on the liquefaction tolling agreements for the first of three proposed liquefaction trains to be built near Freeport, Texas, at Freeport LNG’s existing LNG import terminal.

All three trains are expected to be fully subscribed by the end of 2012 and, once completed, will be capable of liquefying approximately 13.2 million tons per annum of natural gas.

Freeport LNG’s liquefaction tolling agreements with Osaka Gas and Chubu Electric Power will cover 100% of the first train’s liquefaction capacity. Subject to regulatory approval and a final investment decision, Osaka Gas and Chubu Electric will each acquire rights to 2.2 million tons per annum production capacity of the first train over an initial 20-year term.

King & Spalding will continue to represent Freeport LNG on the two remaining trains of the liquefaction project, with definitive agreements for both expected before year-end. The firm also represented Freeport LNG on the front-end engineering and design (FEED) contract for the facility earlier this year.

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Zachry-CB&I venture lands Freeport FEED

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Texas-based Freeport LNG Development has awarded a front-end engineering and design contract to a joint venture between Zachry Industrial and CB&I for a liquefaction facility on the Gulf Coast.

Luke Johnson  16 February 2012 17:51 GMT

Zachry and CB&I will engineer and design a trio of 4.4-million-tonnes-per annum liquefaction trains and corresponding pre-treatment facilities that will be located near the existing Freeport LNG regasification terminal at the Quintana Island terminal near Freeport, Texas.

The two companies will develop a fixed-priced, fixed-schedule proposal within the three-train design for both a one-train initial development and a two-train initial development, Freeport said in a statement.

“This optionality will provide Freeport LNG with the ability to choose the optimum size of the initial phase of the project based upon customer demand and financing considerations,” Freeport said.

Financial terms of the deal were not disclosed.

LNG companies like Freeport and Cheniere Energy – which, just a few years ago, were anticipating being net importers of the fuel – are trying to reinvent themselves as exporters in the wake of a gas glut in the US thanks to the shale boom.

Cheniere is well on its way, having secured sales deals and proper permitting to export gas as soon as 2015.

Freeport is in the process of securing permits. The Department of Energy has given the OK to export LNG while Freeport has started preliminary applications for approval from the Federal Energy Regulatory Commission (Ferc).

It expects to file a formal Ferc application by the end of the first quarter this year and hopes to have all permits in place to begin construction early next year.

Construction will take about 32 months, Freeport says on its website, with start-up at the facility expected in early 2016.

The liquefaction facility will have a processing capacity of about 1.9 billion cubic feet per day of gas. The gas will come via interconnecting intrastate pipeline systems operated by Dow Pipeline, Kinder Morgan and Brazoria Interconnector, through Freeport LNG’s existing Stratton Ridge metre station.

The gas will be liquefied and stored in full-containment LNG storage tanks as it awaits export by tanker, according to Freeport’s website.

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