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Global Infrastructure Partners Announces Agreement to Sell Interest in Freeport LNG to JERA Americas for $2.5 billion

11/19/2021

Global Infrastructure Partners - Press release

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.”