What is the primary purpose of this 8-K filing?

This 8-K filing announces a significant operational agreement for Cheniere Energy's Sabine Pass LNG terminal. It details a Marine Services Agreement between Cheniere's subsidiary, Sabine Pass Tug Services, LLC, and Alpha Marine Services, L.L.C., to ensure the necessary tugboat services for the terminal's construction and future operations.

What services will Alpha Marine provide, and when will they start?

Alpha Marine will provide a range of critical marine services, including escorting LNG vessels, assisting with docking and undocking, standing by vessels and the terminal, and performing emergency response functions. These services are expected to commence between October 1, 2007, and February 12, 2008.

What is Cheniere's financial exposure or guarantee related to this agreement?

Cheniere Energy, Inc. has issued a guarantee for its subsidiary's payment obligations under the Marine Services Agreement. However, Cheniere's aggregate liability under this guarantee is capped at $5 million.

What are the key termination provisions for Cheniere?

Cheniere has considerable flexibility in terminating the agreement. They can terminate with 30 days' notice by paying a break-up fee (which decreases annually during the initial term) or terminate for cause if Alpha Marine materially breaches the agreement and fails to cure it. Termination is also possible in cases of Alpha Marine's bankruptcy or insolvency.

LNG 8-K: Regulation FD — Jun 29, 2006

Summary

Cheniere Energy, Inc. (LNG) reported on June 29, 2006, through its wholly-owned subsidiary Sabine Pass Tug Services, LLC, that it has entered into a Marine Services Agreement with Alpha Marine Services, L.L.C. This agreement, effective June 29, 2006, will secure essential marine services for Cheniere's liquefied natural gas (LNG) terminal under construction in western Cameron Parish, Louisiana. The agreement is crucial for the operational readiness of the Sabine Pass LNG terminal, which is a key project for Cheniere. The agreement outlines that Alpha Marine will provide a minimum of three newly-built tugs to perform a comprehensive range of services, including escorting LNG vessels, assisting with berthing and unberthing, standing by vessels and the terminal, and emergency response. The services are expected to commence between October 1, 2007, and February 12, 2008, with an initial term of ten years, extendable for two additional five-year periods. Investors should note Cheniere's guarantee of its subsidiary's payment obligations, capped at $5 million, and the specific termination clauses, which provide flexibility and manage risk for Cheniere.

Key Highlights

1Cheniere's subsidiary, Sabine Pass Tug Services, LLC, entered into a Marine Services Agreement with Alpha Marine Services, L.L.C.
2The agreement ensures essential marine services for the construction and operation of the Sabine Pass LNG terminal in Louisiana.
3Alpha Marine will deploy at least three newly-built tugs to provide services such as LNG vessel escorting, berthing assistance, and emergency response.
4Services are slated to commence between October 1, 2007, and February 12, 2008, with an initial 10-year term and options for two 5-year extensions.
5Cheniere Energy, Inc. has provided a guarantee for its subsidiary's payment obligations under the agreement, limited to an aggregate of $5 million.
6The agreement includes specific termination rights for Cheniere, including a break-up fee that decreases over the initial term, and termination for cause.
7Alpha Marine is responsible for the construction of the tugs, and timely delivery by February 12, 2008, is a critical condition.

Cheniere Energy, Inc. 8-K Report, Regulation FD Disclosure (Jun 29, 2006)

Summary

Key Highlights

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