--Investment to help Temasek expand energy and resources portfolio
--Funds will be used to help finance Cheniere's liquefaction expansion in Louisiana
(Recasts lead and adds details throughout including comment from Temasek.)
By Sam Holmes
Singapore state investment firm Temasek Holdings Pte. Ltd. and Hong Kong-based private equity group RRJ Capital will jointly invest US$468 million in Houston-based liquefied natural gas firm Cheniere Energy Inc. (>> Cheniere Energy, Inc.) as the firms look to increase their exposure to energy assets and emerging markets.
Cheniere Energy said Monday in a statement it plans to use proceeds of the investment to purchase US$500 million of the US$2 billion in securities to be issued by its subsidiary, Cheniere Energy Partners, L.P. (>> Cheniere Energy Partners, L.P.), which owns key liquefaction assets and will use its capital raising to finance an expansion of these facilities.
Last month, Cheniere Energy received federal approval to build what would be the first major natural gas export facility in the lower 48 U.S. states, putting the company a step closer to shipping some of America's newly abundant gas abroad. The project would allow Cheniere to become the only large-scale liquefied natural gas exporter in the U.S.
Cheniere still must find about $4 billion in financing to build and develop the export facility, a final step it hopes can be done within the next six months. The company on Monday announced it was working with eight banks to arrange the necessary financing. Cheniere in February secured $2 billion for the project from Blackstone Group LP (BX).
Cheniere said that Temasek and RRJ Capital are also in talks on a partnership focusing on developing LNG sales, marketing and trading relationships in Asian markets.
Greg Lanham, a managing director at Temasek, said the investment will help the group tap into opportunities in Asia which are driven by the energy demand of the growing middle income population.
According to its 2011 annual review, 3% of Temasek's S$193 billion asset portfolio was allocated to energy and resources assets as of March 31, 2011, up from 2% a year earlier. Last month, Temasek and RRJ Capital, a US$2.3 billion fund established by former Goldman Sachs Group Inc. banker Richard Ong, bought shares in a US$1.35 billion share placement by Hong Kong-listed crude oil and natural gas company Kunlun Energy Co. (0135.HK), according to a person familiar with the transaction. Last week, Temasek sold shares in Chinese lenders lenders Bank of China Ltd. (3988.HK) and China Construction Bank Ltd. (0939.HK) via placements, raising a total of US$2.48 billion.
Cheniere Energy operates the Sabine Pass LNG terminal in Louisiana through its 90.6%-owned Cheniere Energy Partners, as well as the Creole Trail Pipeline, which connects the Sabine Pass facility with downstream markets.
Its proposed Sabine Pass liquefaction project would convert the existing terminal at the site into a two-way facility that could liquefy and export natural gas as well as import and regasify foreign-sourced LNG.
-By Sam Holmes, Dow Jones Newswires; +65-6415-4157; [email protected]