Osaka Gas and Chubu Electric Power have announced their decision to invest in Freeport LNG's proposed liquefaction and LNG loading facility on Quintana Island near Freeport, Texas, USA. Adjacent to its existing regasification facility which Freeport owns and operates, Freeport is developing three liquefaction units with a capacity of approximately 4.4 Mt/year each. The final investment decision (FID) for the first two trains as well as commencement of construction are expected in the second half of 2014 after obtaining Federal Energy Regulatory Commission ("FERC")'s approvals, among others.
Osaka Gas and Chubu Electric will off-take LNG from the first train. After FID, Osaka Gas and Chubu Electric each plans to acquire a 25% equity of the first train project company and invest approximately US$600m (approx. JPY60bn), respectively, throughout the construction period (approx. 4 years).
By procuring LNG from this project and further facilitating destination-free LNG supply sources, Osaka Gas and Chubu Electric seek to diversify their sources of LNG supply and price indexes whereby achieving stable and competitive LNG procurement.