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.