Sempra Energy, Mitsui & Co., Mitsubishi Corp., Nippon Yusen K.K. and GDF Suez are seeking as much as $5 billion in loans from commercial banks for their Cameron LNG project, people familiar with the matter said.
The funding is part of $7 billion debt financing for the joint venture to develop a U.S. liquefied natural gas export project, five people familiar with negotiations said today. The financing will conclude as early as March and may include $1.5 billion of bonds, said two of the people, who asked not to be identified because the details are private.
The planned $10 billion terminal in Hackberry, Louisiana, is awaiting approval from the Department of Energy to export LNG to countries with which the U.S. doesn’t have free-trade agreements. Japan, the world’s biggest LNG importer, is looking to reduce fuel costs as the country relies on thermal power generation after the Fukushima disaster in March 2011.
Bank of Tokyo-Mitsubishi UFJ Ltd., Muzuho Financial Group Inc. and Sumitomo Mitsui Financial Group Inc. are among the commercial banks that may provide as much as $5 billion in funding, up to half of which would be insured by Nippon Export & Investment Insurance, the two people said. Japan Bank for International Cooperation may supply from $1.5 billion to $3 billion, they said.
The initial guidance for the NEXI-covered tranche is less than 100 basis points more than the London interbank offered rate and under 200 basis points above the benchmark for the uncovered portions, while final price will be determined through bidding, the people said.
The terms of the loan will be set by late November and the lender will be fixed as early as mid-January, the five people said. Royal Bank of Scotland Group Plc is the financial adviser on the deal.
Sempra holds 50.2 percent of the Cameron project while GDF and Mitsui own 16.6 percent each and a venture between Mitsubishi Corp. and Nippon Yusen has 16.6 percent.