8-KMaterial AgreementsExhibits & Filings

Cheniere Energy, Inc. 8-K Report, Material Agreement (Jan 23, 2007)

Filed January 23, 2007For Securities:LNG

Summary

Cheniere Energy, Inc. (LNG) filed an 8-K on January 23, 2007, detailing an amendment to a material definitive agreement. The amendment involves Cheniere Creole Trail Pipeline, L.P. (CCTP), a subsidiary, and ILVA S.p.A. regarding a pipe purchase order. This amendment significantly reduces the quantity and cost of pipes ordered, reflecting a change in CCTP's pipeline construction plans from a dual to a single pipeline. This modification impacts the financial commitment for the pipeline project, reducing the immediate expenditure and adjusting future payment structures, including letters of credit. Investors should note the revised timeline for pipe delivery and production, as well as the adjusted total cost, which is now approximately $67.4 million. The update provides clarity on the capital expenditure related to the Creole Trail LNG receiving terminal's infrastructure.

Key Highlights

  • 1Cheniere Creole Trail Pipeline, L.P. (CCTP), a subsidiary of Cheniere Energy, Inc., amended a purchase order with ILVA S.p.A. for pipeline construction.
  • 2The amendment reduces the total pipe order from approximately 952,700 feet to approximately 342,140 feet.
  • 3The total cost for the pipe has been reduced from approximately $175.7 million to approximately $67.4 million.
  • 4This reduction is due to CCTP's decision to construct a single pipeline instead of the originally proposed dual pipeline.
  • 5Pipe delivery will be phased, with initial deliveries in 2007 for a planned second quarter 2008 in-service date, and second phase deliveries by August 15, 2008.
  • 6The initial letter of credit has been reduced from $88 million to approximately $4 million, with a new $30 million letter of credit to be issued for phase two obligations.

Frequently Asked Questions

The primary reason for the amendment is Cheniere Creole Trail Pipeline, L.P.'s (CCTP) decision to change its pipeline construction plans from a dual pipeline to a single pipeline, leading to a reduced need for pipe.

The amendment significantly reduces Cheniere's financial commitment for the pipe purchase, lowering the total cost from approximately $175.7 million to $67.4 million. It also reduces the immediate required letter of credit and adjusts the timing of future obligations.

The amendment adjusts the pipe delivery schedule. Initial phase pipe is needed for a planned second quarter 2008 in-service date, with deliveries in 2007. Phase two pipe production starts no earlier than December 1, 2007, and deliveries are due no later than August 15, 2008.

The parties involved are Cheniere Creole Trail Pipeline, L.P. (CCTP), a wholly-owned subsidiary of Cheniere Energy, Inc., and ILVA S.p.A., the pipe supplier.