HOUSTON, June 28 /PRNewswire-FirstCall/ -- Cheniere Energy
Partners, L.P. ("Cheniere Partners") (NYSE Amex: CQP) announced
today that its direct subsidiary, Cheniere Energy Investments, LLC
("Investments"), has accepted the assignment of the existing
terminal use agreement ("TUA") with Sabine Pass LNG, L.P.
("Sabine") from Cheniere Marketing, LLC ("Marketing"), a subsidiary
of Cheniere Energy, Inc. and concurrently entered into a Variable
Capacity Rights Agreement ("VCRA") with Marketing. The TUA
provides 2.0 Bcf/d of sendout capacity and 6.9 Bcfe of storage
capacity at the Sabine Pass LNG receiving terminal.
Investments will assume the TUA effective July 1, 2010. Under the terms of the new
VCRA, Marketing will have the right to utilize the services and
other rights at the Sabine Pass LNG receiving terminal available
under the TUA assigned to Investments and to commercialize these
rights on Investments' behalf. 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.
Subsequent to the assignment of the TUA, distributions on
subordinated units will only be made to the extent Cheniere
Partners generates distributable cash flows above the initial
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
Cheniere Marketing under the VCRA. Prior to these
transactions, Cheniere Partners had been using cash paid under the
Marketing TUA to make distributions on the subordinated units.
Consequently, the ending of the subordination period and the
conversion of 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.
This transaction is not expected to impact the ability of
Cheniere Partners to pay the initial quarterly distribution to its
common unitholders and general partner. In order to provide
additional distribution coverage, 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, which will subordinate the payment of the services fees
to the distributions to the common unitholders and general partner.
Cheniere Partners owns 100 percent of the Sabine Pass LNG
receiving terminal located in western Cameron Parish, Louisiana on the Sabine Pass
Channel. Construction is complete and the terminal is now operating
with sendout capacity of 4.0 Bcf/d and storage capacity of 16.9
Bcfe. Additional information about Cheniere Energy Partners,
L.P. may be found on its website:
www.cheniereenergypartners.com.
For additional information, please refer to the Cheniere Energy
Partners, L.P. 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 Energy Partners' business
strategy, plans and objectives and (ii) statements expressing
beliefs and expectations regarding the development of Cheniere
Energy Partners' LNG receiving terminal business. Although Cheniere
Energy Partners 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 Energy Partners' 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 Energy Partners' 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 Energy Partners does not assume a duty to update these
forward-looking statements.
SOURCE Cheniere Energy Partners, L.P.