ICBC contributes $112 million USD to the $3.64179 billion USD term loan tranche to a $4.61679 billion USD syndicated loan for Train 3 of the Freeport LNG Project (Linked to Record ID#107593)

Project narrative

On April 28, 2015, financial close was reached on a deal in which a syndicate of 28 lenders — including the Industrial and Commercial Bank of China (ICBC) — entered into a $4.61679 billion USD syndicated loan agreement with FLNG Liquefaction 3, LLC (FLIQ3) — a Delaware-incorporated special purpose vehicle (SPV) wholly-owned by Texas-incorporated SPV FLIQ3 Holdings, LLC, wholly-owned Freeport LNG Expansion, L.P., a Delaware-incorporated wholly-owned subsidiary of Delaware-incorporated American liquefied natural gas developer Freeport LNG Development, L.P. (FLEX) — for Train 3 of the Freeport LNG Project. This debt was divided into three tranches: a $3.64179 billion USD mini-perm senior term loan tranche, a $50.00 million USD working capital tranche, and a $925.00 million USD mezzanine debt tranche. The term loan and working capital tranches carried a maturity period of seven years, a final maturity date of April 28, 2022, and an interest rate of LIBOR plus an initial margin of 175 basis points (bps), rising to 200 bps upon the start of operations of the project. ICBC contributed $112.00 million USD to the $3.64179 billion USD term loan tranche, as captured by Record ID#107592. 27 lenders, including ICBC, contributed to the tranche: Korea Development Bank (KDB) ($112.00 million USD), Bank of America Corporation ($112.00 million USD), Bank of Montreal ($112.00 million USD), Barclays Bank Plc ($50.26 million USD), Banco Bilbao Vizcaya Argentaria, S.A. (BBVA) ($112.00 million USD), Canadian Imperial Bank of Commerce (CIBC) ($112.00 million USD), Crédit Agricole Group ($185.00 million USD), Credit Suisse AG ($112.00 million USD), Deutsche Bank AG ($185.00 million USD), Goldman Sachs Group Inc. ($112.00 million USD), HSBC Bank ($185.00 million USD), ING Group N.V. ($185.00 million USD), Intesa Sanpaolo S.p.A. ($185.00 million USD), Lloyds Bank plc ($112.00 million USD), Mitsubishi UFJ Trust and Banking Corporation ($50.26 million USD), Mizuho Bank, Ltd. ($185.00 million USD, MUFG Bank ($185.00 million USD), National Australia Bank (NAB) ($112.00 million USD), Natixis ($185.00 million USD), Royal Bank of Canada (RBC) ($112.00 million USD), Banco Santander, S.A. ($112.00 million USD), the Bank of Nova Scotia (Scotiabank) ($185.00 million USD), Shinsei Bank ($50.26 million USD), Société Générale S.A. (SocGen) ($185.00 million USD), Standard Chartered Bank plc ($112.00 million USD), and Sumitomo Mitsui Banking Corporation (SMBC) ($185.00 million USD). ICBC contributed $1.54 million USD to the $50 million USD working capital tranche, as captured by Record ID#107593. 24 lenders, including ICBC, contributed to the tranche: Bank of America ($1.54 million USD), Bank of Montreal ($1.54 million USD), Barclays ($0.69 million USD), BBVA ($1.54 million USD), CIBC ($1.54 million USD), Crédit Agricole Group ($2.54 million USD), Credit Suisse ($1.54 million USD), Deutsche Bank ($2.54 million USD), Goldman Sachs ($1.54 million USD), HSBC ($5.46 million USD), ING Group ($2.54 million USD), Intesa Sanpaolo ($2.54 million USD), Lloyds Bank ($1.54 million USD), Mizuho Bank ($2.54 million USD), Mitsubishi UFJ Trust and Banking Corporation ($2.54 million USD), NAB ($1.54 million USD), Natixis ($2.54 million USD), RBC ($1.54 million USD), Banco Santander ($1.54 million USD), Scotiabank ($2.54 million USD), SocGen ($2.54 million USD), Standard Chartered Bank ($1.54 million USD), and SMBC ($2.54 million USD). IFM Investors was the sole provider of the $925 million USD in mezzanine debt, which would fund the equity of Freeport LNG's into the project. The proceeds were used by the borrower to finance the development of the 4.64 million tons per annum (mtpa) third liquefaction train of the Freeport LNG Project, a 13.2 mtpa three-liquefaction train complex and export terminal on Quintana Island on the Gulf Coast, south of Freeport in Brazoria County, Texas, about 70 miles south of Houston. The project used Air Products’ C3MR (AP-C3MR™) propane-precooled mixed-refrigerant liquefaction process and powered all trains with General Electric's 75 MW motors with variable frequency drives. The Freeport LNG Project was a conversion of an import facility to an export one due to the shale revolution in the United States. The project had a $4.61679 billion USD value. The project had a debt-to-equity ratio of 75:25. Train 3 had 20-year offtaker liquefaction tolling agreements with SK E&S LNG and Toshiba Corporation for 4.4 mtpa of LNG. Though Train 3 was financed via a standalone special purpose vehicle, Train w's operation would be integrated into the total Freeport LNG Project, all managed by the same operations & maintenance provider, sharing costs, access to and ownership of various common facilities, and a joint bearing of he risk of operating performance. After installing Train 1 and 2, the existing regasification terminal was to be converted to a bi-directional facility capable of importing and exporting LNG. Upon completion of the entire project, Freeport LNG would consist of three liquefaction trains, three natural gas pre-treatment facilities, a second marine dock and loading lines, a 165,000 cubic meter full containment LNG storage tank, and related equipment and facilities. The entire project was expected to require a peak construction workforce of over 4,000 workers and 300 new full-time workers once in operation, and generate 25,000 to 30,000 permanent new jobs upstream for increased natural gas exploration, production and infrastructure development and offer geopolitical benefits by unlocking a new source of energy for U.S. allies and an expected reduction of the U.S. trade deficit by reportedly 1%. A joint venture between CB&I, Inc., Chiyoda Corporation, and Zachry Industrial, Inc. was awarded the a fixed-price, date-certain turnkey engineering, procurement, and construction (EPC) contract. The project was expected to be completed in the third quarter of 2019. Upon financial close on April 28, 2015, Freeport issued a full notice to proceed to CB&I, Inc., Chiyoda Corporation, and Zachry Industrial, Inc. to construct Train 3. On May 6, 2020, Train 3 began commercial operations. In June 2022, a fire and explosion occurred in a pipe rack near the LNG storage tanks at the facility, reportedly due an overpressure and rupture of a segment of an LNG transfer line connecting the facility’s LNG storage tanks to its dock facilities, leasing some 120,000 cubic feet of LNG. The project was taken offline, with a mandate from the U.S. Pipeline and Hazardous Materials Safety Administration to take corrective actions before it could be restarted. As of June 2023, after a series of anticipated and delayed restarts, all trains went back online. In January 2024, a freeze hit the facility which caused damage to Train 3's electric motors. As a result, Freepoint LNG reviewed Train 1 and 2 and found similar problems. In April 2024, Freeport LNG filed a lawsuit in Texas district court against Zachry Industrial (which filed for bankruptcy in May 2024), Chiyoda International, and CB&I alleging that their work on the project, including Train 3, had installation defects that caused prolonged outages and costly repairs; specifically, it alleged defects in electric motors resulting from loose assembly hardware, including nuts and bolts, a "significant partial discharge" partly due to excessively long cables, and additional workmanship issues found in Train 2. As of June 2024, the facility had experienced roughly a dozen incidents. Because of the LNG facility's large production capacity, these outages roiled global gas markets. In July 2024, Hurricane Beryl forced shutdown of the facility, which was reopened by the end of the month. In November 2021, Freeport announced plans to develop a carbon capture and sequestration (CCS) project adjacent to the project's gas pretreatment facilities. In April 2023, the Texas Commission on Environmental Quality fined Freeport LNG $152,173 USD for violating state air pollution emissions rules for periods between 2019 and 2021, with emissions exceeding allowable levels included carbon monoxide, hydrogen sulfide, nitrogen oxides, sulfur dioxide, and volatile organic compounds from the project. On May 27, 2020, financial close was reached on a deal in which a syndicate of 18 lenders — including BOC and ICBC — entered into a $3.405 billion USD syndicated loan agreement with FLNG Liquefaction 3, LLC (FLIQ3) for the Train 3 of Freeport LNG 2020 Refinancing Project. This loan was divided into four tranches: a $2.424 billion USD term loan tranche, $750.00 million USD term loan tranche, $181.00 million USD debt service reserve facility tranche, and $50.00 million USD working capital tranche. This loan carried a maturity period of seven years and a final maturity date of May 27, 2027. The proceeds were to be used by the borrower to repay a portion of outstanding debt for Train 3 of the Freeport LNG Project. BOC contributed $33 million USD and ICBC contributed $55.05 million USD to the $750 million USD term loan tranche, as captured by Record ID#107596 for BOC and Record ID#107597 for ICBC. BOC contributed $3.67 million USD and ICBC contributed $3.67 million USD to the $50 million USD working capital tranche, as captured by Record ID#107598 for BOC and Record ID#107599 for ICBC. BOC contributed $7.96 million USD and ICBC contributed $13.28 million USD to the $181 million USD debt service reserve facility tranche, as captured by Record ID#107600 for BOC and Record ID#107601 for ICBC. On April 27, 2021, financial close was reached on a deal in which a syndicate of at least 24 banks — including the Bank of China (BOC) and ICBC — entered into a $1.780 billion USD syndicated loan agreement with FLNG Liquefaction 3, LLC for the Train 3 of Freeport LNG 2021 Refinancing Project. This loan was divided into three tranches: a $1.549 billion USD term loan tranche, a $50.00 million USD working capital tranche, and a $181.00 million USD letter of credit tranche. This loan carried a maturity period of six years and two months (6.178 years) and a final maturity date of June 30, 2027. The proceeds were to be used for the refinancing (repricing) of the existing facilities that supported the construction and operation of Train 3. Each lender, including BOC and ICBC, contributed $64.54 million USD to the $1.549 billion USD term loan tranche, $7.54 million USD to the $50 million USD working capital tranche, and $2.08 million USD to the $181 million USD letter of credit tranche. Record ID#107602 captures BOC's contribution to the $1.549 billion USD term loan tranche. Record ID#107603 captures ICBC's contribution to the $1.549 billion USD term loan tranche. Record ID#107604 captures BOC's contribution to the $50 million USD working capital tranche. Record ID#107605 captures ICBC's contribution to the $50 million USD working capital tranche. AidData does not consider letters of credit to be flows.