Summary
Cheniere Energy, Inc. (LNG) filed an 8-K on January 31, 2007, reporting a material definitive agreement through its wholly-owned subsidiary, Cheniere Creole Trail Pipeline, L.P. (CCTP). CCTP entered into a purchase order with The Bayou Companies, LLC for the application of external concrete weight coating to approximately 43.3 miles of pipeline. This agreement is a critical step for the CCTP pipeline project, which is designed to traverse marsh and marine environments where buoyancy of the pipe is a concern. The total cost of the coating work is approximately $22.3 million, with initial payments and progress payments outlined. The project is scheduled to commence in March 2007 and is expected to take about 18 weeks to complete.
Key Highlights
- 1Cheniere's subsidiary, CCTP, has entered into a significant agreement for pipeline coating.
- 2The agreement with The Bayou Companies, LLC is for concrete weight coating on 43.3 miles of pipe.
- 3The coating is necessary due to the pipeline's route through marsh and marine environments to prevent flotation.
- 4The total cost of the concrete weight coating is approximately $22.3 million.
- 5Payment terms include an initial $2 million for raw materials and subsequent progress payments.
- 6Work is scheduled to begin around March 19, 2007, with an estimated completion by mid-July 2007.
- 7CCTP retains the right to terminate the agreement for convenience, subject to payment obligations.