Chesapeake was identified as potentially supplying up to 500 MMcfd of feed gas to the new facility.

Cheniere Energy Partners Initiating Project to Add Liquefaction Capabilities at the Sabine Pass LNG Terminal

HOUSTON, June 3, 2010 /PRNewswire via COMTEX/ --Cheniere Energy Partners, L.P. ("Cheniere") (NYSE Amex: CQP), a subsidiary of Cheniere Energy, Inc. (NYSE Amex: LNG), announced today that its general partner's Board of Directors has approved the initiation of a project to add liquefaction services at the Sabine Pass LNG receiving terminal in Cameron Parish, Louisiana. Adding liquefaction capabilities would transform the Sabine Pass terminal into a bi-directional facility capable of liquefying and exporting natural gas in addition to importing and regasifying foreign-sourced LNG. Cheniere expects to take advantage of the existing infrastructure at the Sabine Pass terminal to offer customers bi-directional services at attractive pricing. Based on preliminary estimates, the expected fee for bi-directional services will be approximately $1.40/MMBtu to $1.75/MMBtu. This added service would provide customers with an attractive option to source natural gas supply from the U.S. pipeline grid at prices indexed to Henry Hub.

"We believe current market fundamentals have created an opportunity for the U.S. to offer natural gas to global markets at competitive prices. The U.S. is experiencing an increase in natural gas production, primarily driven by unconventional gas plays, while natural gas demand in the U.S. continues to lag behind market projections. Due to the depth of the markets in South Louisiana with an abundance of supply and existing pipeline infrastructure, we can provide an additional outlet for U.S. natural gas production while offering a low cost source of supply for global buyers seeking alternatives to oil-indexed contracts," said Charif Souki, Chairman and CEO. "The ability to buy or sell natural gas in one of the world's most liquid natural gas markets provides industry players with a very powerful tool to manage their portfolios. We have begun pursuing contractual arrangements related to the project and have received favorable preliminary indications of market interest from both potential natural gas buyers interested in capacity and U.S. natural gas producers interested in committing supply to the project. Furthermore, we believe the opening of new markets for U.S. natural gas would reduce price volatility, increase stability in markets, and support continued energy investments in the U.S."

The Sabine Pass site can readily accommodate up to 4 LNG trains capable of processing approximately 2 Bcf/d of natural gas. The capacity of each liquefaction train would be approximately 3.5 million tons per annum (mtpa). The initial project would include two trains with liquefaction capacity of approximately 1 Bcf/d. Further expansion would be considered based upon customer interest.

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