OREANDA-NEWS.  Cheniere Energy has made a positive final investment decision (FID) on a fifth liquefaction train at the Sabine Pass LNG export facility it is building in Louisiana. It is the first US LNG export terminal to expand.

Construction of train 5 has started and it could come on line as early as 2018 with baseload capacity of 4.5mn t/yr, equivalent to 621mn cf/d (17.6mn m?/d) of gas, and peak capacity of 5mn t/yr. Train 1 is scheduled to send out its first test cargo late this year and begin commercial operations in February 2016, with trains 2-4 to come on line sequentially after that through August 2017.

The US is now building five LNG export projects with peak capacity of 74mn t/yr, approaching Qatari output of 77mn t/yr.

Each Sabine Pass train will have the same capacity, for a total of 22.5mn t/yr of baseload capacity and 25mn t/yr of peak capacity. Cheniere has contracted 19.75mn t/yr of its planned Sabine Pass output to customers under 20-year deals.

Train 5 will primarily target Europe, although the LNG for train 5 contracts could come from any operating train. France's Total has secured 2mn t/yr of liquefaction capacity from train 5 and UK firm Centrica has contracted for 1.75mn t/yr. Both companies will pay $3/mmBtu for 20 years for their capacity, whether they take LNG or not. If they want LNG, they will pay an additional 115pc of the Nymex Henry Hub monthly settlement price for a month in which a cargo is scheduled.

Cheniere has received all necessary regulatory approvals to build a sixth liquefaction train at Sabine Pass with the same capacity, but it has not sold any long-term capacity for that project. It has said it will need to sell 3mn t/yr of capacity from train 6 to finance it.

The Houston-based company previously said it planned to make an FID on train 6 this year with operations to begin in 2020, but it did not reply to an Argus inquiry today asking if that timeline had changed, or if falling oil prices have made it more difficult to find customers. The economics of US LNG exports are based on a wide differential between US gas prices and global oil prices, as most long-term LNG contracts to Asia from suppliers in other parts of the world are indexed to oil prices.

To fund train 5, Cheniere's wholly owned subsidiary Sabine Pass Liquefaction entered into four credit facilities, replacing previous credit facilities, for potential debt of up to $4.6bn, including $2.85bn from a syndicate of 25 banks and financial institutions. Three additional credit facilities totaling $1.75bn were entered into with The Export-Import Bank of Korea, Korean financial institutions supported by the Korea Trade Insurance Corporation and Korean financial institutions support by The Export-Import Bank of Korea.

South Korean state-owned utility Korea Gas has a 20-year agreement to buy 0.7mn t/yr of Total's supply from train 5, as well as a 20-year deal for 3.5mn t/yr of capacity from Sabine Pass train 3.

Additionally, Sabine Pass Liquefaction secured commitments for a $1.2bn revolving credit facility that is expected to close soon.

It was not immediately clear how much of the funds would be used for train 5, which Cheniere previously said had an estimated cost of $4.5bn, and how much would be used to complete the first four trains.

Cheniere is also building two liquefaction trains at a greenfield project in Corpus Christi, Texas, and plans to make an FID this year on a third train at Corpus Christi.