HOUSTON, June 28 /PRNewswire-FirstCall/ -- Cheniere
Energy, Inc. ("Cheniere") (NYSE Amex: LNG) announced today that
Cheniere Marketing, LLC ("Marketing") has assigned its existing
terminal use agreement ("TUA") with Sabine Pass LNG, L.P.
("Sabine") to Cheniere Energy Investments, LLC ("Investments"), a
subsidiary of Cheniere Energy Partners, L.P. ("Cheniere Partners"),
and concurrently entered into a Variable Capacity Rights Agreement
("VCRA") with Investments. The TUA provides 2.0 Bcf/d of
send-out capacity and 6.9 Bcfe of storage capacity at the Sabine
Pass LNG receiving terminal.
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Under the terms of the new VCRA, which becomes effective
July 1, 2010, Marketing will continue
to be responsible for monetizing the capacity at the Sabine Pass
LNG receiving terminal and will have the right to utilize all of
the services and other rights at the Sabine Pass LNG receiving
terminal available under the TUA assigned to Investments. In
consideration of these rights, Marketing will pay Investments a fee
for each cargo delivered to the Sabine
Pass facility equal to eighty percent of the expected
positive gross margin to be received with respect to each cargo.
These transactions do not impact the previously announced
arrangement between Marketing and JPMorgan LNG Co or any existing
agreements with other counterparties.
As a result of the assignment of the TUA, the funds held in the
TUA reserve account of approximately $64
million will be released as the funds are no longer needed
to make quarterly TUA payments. These funds will be used to
pay down $64 million of the
convertible senior secured loans of which $311 million is outstanding as of June 28, 2012.
Prior to the TUA assignment, Cheniere Partners had been using
cash paid under the Marketing TUA to make distributions back to
Cheniere on the subordinated units. Subsequent to this
transaction, Cheniere will receive distributions on its
subordinated units only to the extent Cheniere Partners generates
distributable cash flows above the minimum quarterly distribution
requirement for its common unitholders and general partner.
Such distributable cash flows could be generated through new
business development or fees received from Marketing under
the VCRA. As a result of the TUA assignment, the ending of
the subordination period and conversion of the subordinated units
into common units will depend upon future business development and
is no longer expected to occur as early as the second quarter of
2012 as previously estimated.
Additionally, Cheniere Partners and Cheniere have agreed to
amend the payment terms of the management services agreement under
which a Cheniere subsidiary provides certain management, accounting
and other related services to Cheniere Partners, in order to
subordinate the payment of the services fees to distributions to
the common unitholders and general partner and provide additional
coverage for the common unit distributions.
Cheniere Energy, Inc. is a Houston-based energy company primarily engaged
in LNG related businesses, and owns and operates the Sabine Pass
LNG receiving terminal and Creole Trail pipeline in Louisiana. Cheniere is pursuing related
business opportunities both upstream and downstream of the Sabine
Pass LNG receiving terminal. Additional information about
Cheniere Energy, Inc. may be found on its web site at
www.cheniere.com.
For additional information, please refer to the Cheniere Energy,
Inc. Annual Report on Form 10-K for the year ended December 31, 2009, filed with the Securities and
Exchange Commission.
This press release contains certain statements that may include
"forward-looking statements" within the meanings of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. All statements, other than statements of
historical facts, included herein are "forward-looking statements."
Included among "forward-looking statements" are, among other
things, (i) statements regarding Cheniere's business strategy,
plans and objectives and (ii) statements expressing beliefs and
expectations regarding the development of Cheniere's LNG receiving
terminal and pipeline businesses. Although Cheniere believes that
the expectations reflected in these forward-looking statements are
reasonable, they do involve assumptions, risks and uncertainties,
and these expectations may prove to be incorrect. Cheniere's
actual results could differ materially from those anticipated in
these forward-looking statements as a result of a variety of
factors, including those discussed in Cheniere's periodic reports
that are filed with and available from the Securities and Exchange
Commission. You should not place undue reliance on these
forward-looking statements, which speak only as of the date of this
press release. Other than as required under the securities laws,
Cheniere does not assume a duty to update these forward-looking
statements.
SOURCE Cheniere Energy, Inc.