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Freeport LNG at forefront of US energy revolution

7 February 2015

The US energy revolution constitutes one of the most significant global economic developments of recent times.

Until recently the world’s largest net oil importer, the US is expected to become the largest producer of oil and liquid natural gas by 2016.

The shift in the US energy market has been driven by breakthroughs in shale gas exploration and development, which have led to a significant increase in US natural gas reserves, now estimated to last more than 100 years.

Freeport LNG is a company that has evolved its strategy in response to this market change.

In 2005, Freeport LNG began construction on a natural gas liquefaction terminal in Southern Texas to receive natural gas imports. Taking full advantage of the recent US market shift from consumption to production, the terminal pivoted its import focus on regasification to developing one of the world’s largest natural gas liquefaction and LNG export facilities.

It is now developing a facility capable of processing two billion cubic feet of shale gas a day for both domestic consumption and international export.

Until recently the world’s largest net oil importer, the US is expected to become the largest producer of oil and liquid natural gas by 2016.

Once construction is completed, the liquefaction and export facility is expected to add between $US5.1-7.4 billion in total economic benefits to the US economy per year.

The proposed expansion requires more than $US14 billion in direct investment and will take up to five years to complete. 

As Freeport LNG’s financial adviser, Macquarie has worked closely with the company on every aspect of the project over the past four years. 

The combined Freeport LNG facility was the largest project financing globally of 2014. 

Throughout the project, Macquarie drew on more than a decade of extensive experience in the global energy sector and knowledge of the energy industry’s complexities. Platts ranks Macquarie as the third largest trader of natural gas in North America. 

“Macquarie was integral to the success of this project,” says Freeport LNG Chief Executive Officer Michael Smith. 

“They worked with us from the early days until the end, providing advice across all aspects of the project, not just the financing. 

“They’ve helped us create tremendous value for our shareholders and never once wavered in their creativity, intensity and dedication.” 

The first train is due to be completed in 2018. 

Learn more about Macquarie’s energy credentials in Advisory and Capital Markets and Trading and Hedging.