Freeport LNG Expansion LP has entered into a binding 20-year liquefaction tolling agreement with BP for 4.4 million tons per annum, equivalent to the production capacity of the second train of Freeport LNG’s proposed natural gas liquefaction and LNG loading facility on Quintana Island near Freeport, Texas.

The agreement with BP will commence upon completion of construction of the second liquefaction train.

In July 2012, Freeport LNG executed liquefaction tolling agreements with Osaka Gas Co. Ltd. and Chubu Electric Power Co. for a total of 4.4 million tons per annum. The Osaka Gas and Chubu Electric agreements commence upon completion of construction of the initial liquefaction train.

Commencement of construction of Freeport LNG’s liquefaction project is subject to receipt of regulatory approvals and final investment decision by Freeport LNG. Key regulatory approvals include Federal Energy Regulatory Commission (FERC) authorization to commence construction and Department of Energy (DOE) approval to export LNG to non-Free Trade Agreement (non-FTA) countries.

Freeport LNG is next in line to receive DOE approval, which would cover the entire production volume of the initial two liquefaction trains and would allow for Freeport LNG to begin exporting to non-FTA countries immediately upon completion of construction. The DOE is expected to commence review of Freeport LNG’s pending non-FTA export application immediately after the period for response to the initial comments raised in respect of DOE’s 2012 LNG Export Study ends on Feb. 25. Freeport LNG’s second DOE application covering up to two additional trains of production volume is fourth in line in the order established by DOE for review and processing of pending non-FTA export applications.

Freeport LNG expects to receive FERC approval to commence construction of the first three liquefaction trains in the third quarter of 2013, and to begin construction of the first two trains in the fourth quarter of 2013. The first train is anticipated to commerce operations 48 months from start of construction, with the second train in operation six to nine months after the first train. Marketing of the capacity of the third train is anticipated to be completed before year end, with financing to be closed and construction to begin on the third train as early as late-2014.

Freeport LNG has contracted with CB&I Inc. and Zachry Industrial Inc. to conduct FEED for the initial three trains of the liquefaction project. Macquarie Capital is serving as Freeport LNG’s financial advisor with respect to the proposed financing for the first two trains of the project. King & Spalding advised Freeport LNG on its agreement with BP.

Freeport LNG Expansion LP is a wholly owned subsidiary of Freeport LNG Development LP, which owns and operates an existing LNG regasification terminal located near Freeport, Texas.