What is the significance of the ConocoPhillips agreement for Cheniere Energy?

The agreement with ConocoPhillips is highly significant as it secures a major customer for the Freeport LNG terminal, provides substantial construction funding, and brings a strategic partner with a 50% general partner interest. This validates Cheniere's development strategy and de-risks the project considerably, paving the way for its construction and operation.

What is Cheniere's ownership stake in the Freeport LNG terminal, and how did it evolve?

Cheniere initially acquired an option on the Freeport LNG site in June 2001. In February 2003, it formed the Freeport LNG partnership, selling 60% of its interest to Freeport LNG Investments and 10% to an affiliate of Contango Oil and Gas by March 2003. Currently, Cheniere holds a 30% limited partnership interest in Freeport LNG.

When is the Freeport LNG terminal expected to be operational, and what are the key project milestones?

Commercial start-up for the Freeport LNG terminal is scheduled for mid-2007. Key milestones include expected FERC approval in the first quarter of 2004, completion of the front-end engineering and design study in January 2004, and commencement of construction in the second half of 2004.

Beyond Freeport, what other LNG projects is Cheniere developing?

Cheniere is also actively developing two other major LNG receiving terminals on the U.S. Gulf Coast: one in Sabine Pass, Louisiana, and another in Corpus Christi, Texas. The company plans to submit permit applications for both of these facilities to FERC by the end of December 2003.

LNG 8-K SEC Disclosure — Dec 22, 2003

Summary

Cheniere Energy, Inc. (LNG) filed an 8-K on December 22, 2003, detailing significant progress in its Liquefied Natural Gas (LNG) receiving terminal business. The most crucial announcement is the agreement between Freeport LNG Development, L.P. (Freeport LNG) and ConocoPhillips. Under this deal, ConocoPhillips will acquire 1 billion cubic feet (bcf) per day of regasification capacity at the proposed Freeport, Texas terminal, along with a 50% interest in the general partner of Freeport LNG and significant construction funding estimated between $400-$450 million. This development marks a critical step forward for Cheniere's LNG strategy, confirming substantial third-party commitment and financing for its flagship project. The company is actively developing other major LNG receiving terminals in Sabine Pass, Louisiana, and Corpus Christi, Texas, with FERC applications planned for submission by year-end 2003. While the company maintains oil and gas exploration activities, its primary focus is clearly on the expansion and development of its LNG infrastructure, positioning itself as a key player in the emerging U.S. LNG market.

Key Highlights

1ConocoPhillips to acquire 1 bcf/day capacity and a 50% general partner interest in the Freeport LNG terminal.
2ConocoPhillips will provide an estimated $400-$450 million in construction funding for the Freeport LNG terminal.
3Cheniere is a 30% limited partner in Freeport LNG, which is developing a terminal on Quintana Island, Texas.
4Freeport LNG terminal is targeted for commercial start-up in mid-2007, with FERC approval anticipated in Q1 2004.
5Cheniere is also actively developing LNG receiving terminals in Sabine Pass, Louisiana, and Corpus Christi, Texas.
6FERC permit applications for Sabine Pass and Corpus Christi terminals are expected by the end of December 2003.
7The company retains its focus on oil and gas exploration but emphasizes the LNG terminal business as its primary strategic direction.

Cheniere Energy, Inc. 8-K Report (Dec 22, 2003)

Summary

Key Highlights

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