What is the primary purpose of the Master Ex-Ship LNG Sales Agreement between Cheniere Marketing and GDF?

The Master Agreement establishes a framework for the future purchase and sale of Liquefied Natural Gas (LNG) between Cheniere Marketing and GDF. It outlines the terms under which specific transactions can be agreed upon, though neither party is obligated until a written order detailing quantity, price, and other terms is executed.

What are the key terms of the specific order for LNG cargoes for April-October 2008?

Cheniere Marketing is committed to purchasing up to seven LNG cargoes from GDF during this period. The purchase price is based on the NYMEX settlement price with a discount. Deliveries are to the Sabine Pass terminal, with flexibility to divert to other North American terminals. Cancellation fees apply for cargoes from May to October 2008.

What are the 'Transatlantic Option Agreements' and when do they become active?

These are two separate agreements. The "GDF Transatlantic Option Agreement" gives GDF the option to sell LNG to Cheniere Marketing monthly. The "Cheniere Transatlantic Option Agreement" gives Cheniere Marketing the option to sell LNG to GDF monthly. Both "Option Periods" begin on the first day of the month following the commercial startup of either GDF's Isle of Grain terminal expansion or Cheniere's Sabine Pass terminal, and extend for 15 years.

Are there any conditions that need to be met for these agreements to become effective?

Yes, the effectiveness of these transactions is contingent upon the satisfaction of certain conditions, including the approval by the respective boards of directors or management committees of Cheniere Energy, Inc. and Gaz de France, or their parent companies, by July 1, 2007.

LNG 8-K: Material Agreements

Summary

Cheniere Energy, Inc. (LNG) filed an 8-K on April 26, 2007, to report the execution of a Master Ex-Ship LNG Sales Agreement and related option agreements between its subsidiary, Cheniere Marketing, Inc., and Gaz de France International Trading S.A.S. (GDF). This agreement establishes a framework for the future purchase and sale of Liquefied Natural Gas (LNG) between the two entities. The key operational aspect of this filing is a specific order under the Master Agreement for Cheniere Marketing to purchase up to seven LNG cargoes from GDF between April and October 2008. These cargoes are designated for the Sabine Pass regasification terminal, with a provision allowing diversion to alternative North American terminals. The pricing for these cargoes is tied to NYMEX settlement prices, with a discount. The filing also details two option agreements that grant GDF the option to sell LNG to Cheniere Marketing and Cheniere Marketing the option to sell LNG to GDF, both commencing upon the operational start of key regasification terminals and extending for a significant period.

Key Highlights

1Cheniere Marketing, Inc. (a subsidiary) entered into a Master Ex-Ship LNG Sales Agreement with Gaz de France International Trading S.A.S. (GDF).
2A specific order under the Master Agreement obligates Cheniere Marketing to purchase up to seven LNG cargoes from GDF between April and October 2008.
3The purchase price for these cargoes is set at 94% of the final NYMEX settlement price per MMBtu, less a discount of $0.65 per MMBtu.
4Deliveries under this specific order are primarily for the Sabine Pass regasification terminal, with an option to divert to other North American terminals.
5Two transatlantic option agreements were executed: one granting GDF an option to sell LNG to Cheniere Marketing, and another granting Cheniere Marketing an option to sell LNG to GDF.
6The option agreements' "Option Period" commences upon the operational start of either the Isle of Grain LNG regasification terminal expansion or the Sabine Pass LNG regasification terminal.
7The effectiveness of these agreements is subject to certain conditions, including board and management approvals by July 1, 2007.

Cheniere Energy, Inc. 8-K Report, Material Agreement (Apr 27, 2007)

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