NEW YORK & HOUSTON : Global Infrastructure Partners (“GIP”), a leading independent infrastructure investor, announced today an agreement to sell its 25.7% interest in Freeport LNG Development, L.P. (“Freeport”) to JERA Americas Inc. for US$2.5 billion, subject to customary purchase price adjustments. GIP’s second flagship fund, Global Infrastructure Partners II, acquired the stake in 2015.
JERA Americas Inc. (“JERA Americas”) is the U.S.-based subsidiary of global energy leader JERA Co., Inc. (“JERA”), the world’s largest buyer of liquefied natural gas (“LNG”). JERA, through its subsidiaries, owns 25% of Freeport LNG Train 1 and purchases and transports 2.32 mtpa of LNG for use in Japan and other LNG importing countries. Closing of the transaction is subject to customary regulatory approvals and closing conditions.
Freeport owns and operates an LNG export facility on Quintana Island, near Freeport, Texas. In May 2020, Freeport completed construction on the third of its three liquefaction trains, which together produce 15+ mtpa and are underpinned by long-term contracts with top-tier offtakers. Today, Freeport is the seventh largest LNG facility in the world, the second largest in the U.S., and the only U.S. facility to use electric motor-driven technology, emitting 90% less CO2 than a comparable gas turbine-driven facility. Freeport is in the process of pursuing multiple accretive growth opportunities across the LNG value chain, including a fully permitted, shovel-ready Train 4 expansion.
Michael Smith, the Chairman, CEO, Founder and majority shareholder of Freeport said, “As global energy needs continue to grow, there is a global push toward a low-carbon future; we are privileged to play a leading role in fulfilling both of these objectives. We liquefy cost-advantaged, clean American natural gas to provide energy security to key allies such as Japan while reducing emissions by using our electric drive motors and displacing coal. Since 2015, GIP has been an invaluable partner, contributing their expertise and relationships. We look forward to building on our success with JERA, who is already a key partner and offtaker at Freeport, and are excited to have them take a larger role in our growing LNG platform.”
Adebayo Ogunlesi, Chairman and Managing Partner of GIP said, “We are extremely proud to have partnered with Michael Smith in transforming Freeport from a regasification facility into a leading LNG export platform that will help drive industrial growth and development. Through its agility and entrepreneurial spirit, Freeport is continuing to innovate and find ways to deliver more LNG with lower carbon intensity to consumers around the world. We congratulate JERA Americas as they participate in the next stage of Freeport’s growth.”
Steven Winn, CEO of JERA Americas said, “Increasing our ownership position in Freeport not only provides JERA Americas with highly cost-competitive LNG that may be used to ensure a stable supply to the global market, it also will allow us to build upon and accelerate some of efforts that Freeport has already initiated toward the goal of cleaner energy. Securing a stable supply of LNG is becoming increasingly important as we witness sharp price increases around the world. We will leverage the knowledge and expertise accumulated through JERA’s global LNG value chain business and power plant operations as we work together with Freeport on its various businesses to meet the growing demand for electricity in Asian countries and help facilitate the transition from coal to lower emission transitional fuel LNG.”
About Freeport LNG
Freeport LNG is an LNG export company headquartered in Houston, Texas. The company’s three train, 15 mtpa liquefaction facility is the seventh largest in the world and second largest in the U.S. Freeport LNG’s liquefaction facility is the largest all-electric drive motor plant of its kind in the world, making it the most environmentally sustainable site of its kind. The facility’s electric drive motors reduce carbon emissions by over 90% relative to gas turbine-driven liquefaction facilities. Freeport plans to expand by adding a fourth liquefaction train, which has received all regulatory approvals for construction. Freeport was formed in 2002 to develop, own and operate an LNG terminal on Quintana Island, near Freeport, Texas. The terminal started LNG import operations in June 2008 and began LNG export operations in 2019. Further information can be found on Freeport’s website at www.freeportlng.com.
About Global Infrastructure Partners
Global Infrastructure Partners is an independent infrastructure fund manager that makes equity and debt investments in infrastructure assets and businesses. GIP targets investments in the energy, transport and water/waste sectors in both OECD and select emerging market countries. GIP’s teams are located in 10 offices: London, New York, Stamford (Connecticut), Sydney, Melbourne, Brisbane, Mumbai, Delhi, Singapore and Hong Kong. GIP’s credit platform provides financing solutions and makes debt and non-common equity investments in infrastructure assets and companies. For more information, visit www.global-infra.com.
About JERA Americas
Houston-based JERA Americas is a leading integrated energy provider supporting the Americas’ energy transition in an environmentally and socially responsible manner. A subsidiary of JERA, the world’s largest buyer of LNG and supplier of 30% of the electricity in Japan, JERA Americas is supporting a “JERA Zero CO2 Emissions 2050” objective to achieve zero CO2 emissions from its businesses by 2050. JERA, which stands for Japanese Energy for a New Era, has a vision to contribute to the development of a sustainable society, and to become a global company that is worthy of the regard of the global energy market and indispensable to the people of the world. Further information may be found at www.jera.co.jp/english/.
Rothschild & Co and Mizuho Securities USA LLC are serving as joint financial advisors and Simpson Thacher & Bartlett LLP is serving as legal advisor to GIP. Goldman Sachs & Co. LLC is serving as financial advisor and Sidley Austin LLP is serving as legal advisor to JERA Americas.
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