HOUSTON--(Business Wire)--
Cheniere Energy, Inc. (AMEX:LNG) announced today that its
marketing subsidiary is in advanced negotiations for a proposed
arrangement with a major North American natural gas marketing company
by which the marketing company will manage the throughput of LNG and
the downstream natural gas marketing for LNG cargoes delivered for
Cheniere Marketing's account at Sabine Pass LNG. The arrangement is
subject to the negotiation and execution of definitive agreements and
approval of the parties' respective boards of directors.
The proposed arrangement will eliminate Cheniere's need for
capital for the purchase of LNG cargoes, and will allow Cheniere to
reduce its investment in its U.S. natural gas marketing unit.
Furthermore, this arrangement will enable Cheniere to significantly
reduce overhead costs while maintaining its current strategy of
securing LNG supply for the U.S. natural gas markets and maximizing
the value of its capacity held under its 2 Bcf/d terminal use
agreement at Sabine Pass.
"It has become evident to us that the capital markets are
currently very difficult," said Charif Souki, Chairman and CEO. "This
proposed strategic arrangement will allow us to receive large
quantities of LNG without putting strain on our balance sheet. In
addition, this proposed arrangement will allow us to reduce our
overhead considerably, conserve our liquidity, and focus on maximizing
the value of our terminal and pipeline. We will now turn our attention
to optimizing the value of our assets through the continuation of the
strategic review process initiated last month."
Under the arrangement, proceeds from the sale of regasified LNG
will be used in part to reimburse Cheniere for certain costs,
including Cheniere Marketing's terminal use agreement, the Creole
Trail Pipeline tariff and LNG cargo origination efforts, with the
remaining proceeds to be shared by both parties.
Concurrently, the combination of the eminent completion of
construction on the initial phase of the Sabine Pass terminal and
Creole Trail Pipeline has allowed Cheniere to commence a cost and
staff reduction program which will involve a staff reduction of
approximately 200 people. Upon completion of this reduction program,
Cheniere will have approximately 80 employees at the terminal and 80
employees in the corporate office in Houston.
Cheniere also announced today the departure of its president, Stan
Horton, effective immediately.
"Given the successful completion of construction at Sabine Pass
Phase I and Creole Trail Pipeline and the reduction in staff, Stan has
decided that this was a good time to leave Cheniere and pursue other
interests. His contributions are greatly appreciated and we will miss
him," Souki said.
Souki further stated: "We continue to believe firmly that the U.S.
natural gas demand cannot be met without a significant increase in LNG
imports. In this context, we have very valuable assets and we will
focus on being in the position to maximize their value for our
shareholders."
Cheniere Energy, Inc. is developing a network of three LNG
receiving terminals and related natural gas pipelines along the Gulf
Coast of the United States. Cheniere is pursuing related business
opportunities both upstream and downstream of the terminals. Cheniere
also founded and holds a 30% limited partner interest in Freeport LNG.
Cheniere is based in Houston, Texas with offices in Louisiana, Texas;
Washington, D.C.; London, England and Paris, France. Additional
information about Cheniere may be found on its web site at
www.cheniere.com.
This press release contains certain statements that may include
"forward-looking statements" within the meanings of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934. All statements, other than statements of historical facts,
included herein are "forward-looking statements." Included among
"forward-looking statements" are, among other things, (i) statements
regarding Cheniere's business strategy, plans and objectives and (ii)
statements expressing beliefs and expectations regarding the
development of Cheniere's LNG receiving terminal and pipeline
businesses. Although Cheniere believes that the expectations reflected
in these forward-looking statements are reasonable, they do involve
assumptions, risks and uncertainties, and these expectations may prove
to be incorrect. Cheniere's actual results could differ materially
from those anticipated in these forward-looking statements as a result
of a variety of factors, including those discussed in Cheniere's
periodic reports that are filed with and available from the Securities
and Exchange Commission. You should not place undue reliance on these
forward-looking statements, which speak only as of the date of this
press release. Other than as required under the securities laws,
Cheniere does not assume a duty to update these forward-looking
statements.
Cheniere Energy, Inc.
Christina Cavarretta, 713-375-5100 (Investors)
Kim Hull, 713-375-5105 (Media)
Copyright Business Wire 2008
