Cheniere Energy and Cheniere Partners rise on Citigroup comments

NEW YORK - Cheniere Energy Inc. (NYSE: LNG) and Cheniere Energy Partners (NYSE: CQP) recovered some of the market capitalization they lost as a result of the disclosure on March 8 that Cheniere Inc. had filed a defamation suit against a hedge fund that had alleged it was in default on some notes.

CPQ alone lost $720 million in market cap on March 8 as a result of the disclosure.

Citigroup on the morning of March 9 said Cheniere Energy Inc.'s Sabine Pass unit appears not be in default under terms of the notes brought into question by the hedge fund.

Cheniere Inc. filed a defamation lawsuit against the hedge fund that alleged it had strayed from generally accepted accounting principles, but Sabine Pass, Cheniere Energy and Cheniere Energy Partners L.P. "all received unqualified audit opinions from Ernst & Young" last week, Citigroup said.

On March 8, LNG and CQP fell 35 percent and 22 percent respectively, Sabine Pass, LNG, and CQP "all received unqualified audit opinions from Ernst & Young," last week, Citigroup noted, adding "We view recent volatility around the price of LNG shares and units of CQP as somewhat unfounded...In our opinion, Sabine Pass LNG is not in default."

Cheniere signs MOU with Sumitomo for Sabine Pass LNG terminal

CAMERON PARISH, La. - Cheniere Energy Partners, L.P. (NYSE Amex: CQP) announced on Jan. 27 that its subsidiary, Sabine Pass Liquefaction, LLC, has entered into a non-binding memorandum of understanding with Sumitomo Corp., under which Sumitomo intends to contract up to approximately 1.5 million tons per annum (mtpa) of processing capacity at the Sabine Pass LNG terminal located in Cameron Parish, La.

Under the MOU, Sumitomo and Sabine have agreed to proceed with negotiations of definitive agreements for Sumitomo to contract bi-directional capacity, subject to receipt of regulatory approvals and making a final investment decision to construct the liquefaction facilities.

"We are pleased to have Sumitomo as a customer at Sabine Pass." said Charif Souki, chairman and CEO of Cheniere Energy Partners. "With this MOU we have up to 7.7 million tons per annum of LNG processing capacity reserved. We have reached our targeted capacity for the first two trains and look forward to advancing discussions and entering into definitive agreements."

Cheniere Partners owns 100 percent of the Sabine Pass LNG terminal located in western Cameron Parish, La., on the Sabine Pass Channel. The terminal has sendout capacity of 4.0 Bcf/d and storage capacity of 16.9 Bcfe.

As currently contemplated, the Sabine Pass liquefaction project would be designed and permitted for up to four modular LNG trains, each with a peak processing capacity of up to 0.7 Bcf/d of natural gas and an average liquefaction processing capacity of 3.5 mtpa. The initial project phase is anticipated to include two modular trains and the capacity to process 1.2 Bcf/d of pipeline quality natural gas.

Start of construction is subject to regulatory approvals and a final investment decision contingent upon Cheniere Partners obtaining satisfactory construction contracts and entering into long-term customer contracts sufficient to underpin financing of the project.