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CQP > SEC Filings for CQP > Form 8-K on 25-Mar-2013All Recent SEC Filings

Show all filings for CHENIERE ENERGY PARTNERS, L.P.

Form 8-K for CHENIERE ENERGY PARTNERS, L.P.


25-Mar-2013

Entry into a Material Definitive Agreement, Other Events, Financia


.,kITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
LNG Sale and Purchase Agreement
On March 25, 2013, Cheniere Energy Partners, L.P. ("Cheniere Partners") issued a
press release announcing the signing of an LNG Sale and Purchase Agreement
("SPA") between Sabine Pass Liquefaction, LLC, a subsidiary of Cheniere Partners
("Sabine Liquefaction"), and Centrica plc ("Centrica").
Under the SPA, in summary and subject to the more detailed provisions and
conditions set forth therein:
            Commencing on the date of first commercial delivery of LNG from the
             fifth liquefaction train (as determined in accordance with the SPA),
             Sabine Liquefaction will sell and make available for delivery, and
             Centrica will take and pay for, cargoes of liquefied natural gas
             ("LNG") with an annual contract quantity of 91,250,000 MMBtu
             (equivalent to approximately 1.75 million tonnes per annum
             ("mtpa")).


            Centrica will pay Sabine Liquefaction a contract sales price for
             each MMBtu of LNG delivered under the SPA. The contract sales price
             will be equal to $3.00 plus 115% of the final settlement price for
             the New York Mercantile Exchange Henry Hub natural gas futures
             contract for the month in which the relevant cargo is scheduled.
             11.5% of the fixed portion of the contract sales price will be
             subject to an annual adjustment for inflation.


            Centrica will have the right to suspend delivery of all cargoes of
             LNG scheduled in a month by a timely advance notice, in which case
             Centrica will continue to be obligated to pay the fixed portion of
             the contract sales price with respect to the quantity of LNG
             suspended but will forfeit its right to receive the suspended
             quantity. Centrica will have the right to resume delivery of cargoes
             of LNG by a timely advance notice.


            The SPA will have a 20-year term, commencing on the date of first
             commercial delivery of LNG from the fifth liquefaction train (as
             determined in accordance with the SPA). Centrica will have the right
             to extend the 20-year term for an additional period of up to 10
             years.


            The obligations of Sabine Liquefaction to proceed with the fifth
             liquefaction train under the SPA will become effective when the
             following conditions have been satisfied or waived:


?               Sabine Liquefaction has received all regulatory approvals
                required for construction and operation of its fifth liquefaction
                train and related facilities in Cameron Parish, Louisiana;


?               Sabine Liquefaction has secured the necessary financing
                arrangements to construct and operate its fifth liquefaction
                train and related facilities;


?               Sabine Liquefaction has taken a positive final investment
                decision to proceed with construction of its fifth liquefaction
                train and related facilities;


?               specified regulatory authorizations are in effect permitting
                Sabine Liquefaction to export LNG from the United States; and


?               Sabine Liquefaction has issued an unconditional notice to proceed
                with the construction of the fifth liquefaction train.


            Sabine Liquefaction will designate the date for the first commercial
             delivery of LNG from the fifth liquefaction train within the 180-day
             period commencing 50 months after the date the preceding conditions
             have been satisfied or waived.


Centrica would have the right to terminate the SPA if Sabine Liquefaction declared an event of force majeure (as defined and provided in the SPA) one or more times and the interruptions from such force majeure events aggregated 24 or more months during any 36-month period and resulted in a 50 percent or greater reduction in the annual contract quantity of LNG available to Centrica during that period. Centrica would also have the right to terminate the SPA if, among other things, Sabine Liquefaction failed to make available to Centrica 50 percent or greater of the cargoes scheduled in any 12-month period, or the fifth liquefaction train had not commenced commercial operations at the Sabine Liquefaction facility within 180 days after the date designated for the first commercial delivery.
Sabine Liquefaction would have the right to terminate the SPA if: (i) Centrica declared an event of force majeure one or more times and the interruptions from such force majeure events aggregated 24 or more months during any 36-month period and resulted in Centrica being prevented from taking 50 percent or more of the annual contract quantity of LNG during that period; (ii) Centrica failed to take 50 percent or greater of the cargoes scheduled in any 12-month period;
(iii) any guaranty required to be delivered by Centrica under the SPA was not delivered for a period exceeding 10 business days or such guaranty ceased to be in effect for longer than 10 business days; (iv) Centrica or its guarantor failed to satisfy certain credit rating requirements; (v) any guarantor was not an affiliate of Centrica; (vi) Centrica or its guarantor failed to execute certain agreements with financial lenders; (vii) Centrica failed to comply with applicable trade laws; or (viii) Centrica violated provisions of the SPA restricting how LNG purchased under the SPA may be used. Either party would have the right to terminate the SPA if: (i) a bankruptcy event (as defined in the SPA) occurred with respect to the other party; (ii) the other party failed to pay amounts due under the SPA in excess of US$30 million;
(iii) the other party's business practices caused it to violate certain applicable laws; or (iv) the conditions to the commencement of the 20-year term specified in the SPA were not satisfied or waived by June 30, 2015, or a later date if so agreed by Centrica and Sabine Liquefaction. Under the SPA, Sabine Liquefaction and Centrica will be responsible for their respective taxes, and each may assign the SPA as provided in the SPA. The descriptions of material terms of the SPA set forth above are not complete, are subject to further provisions (including exceptions, qualifications and alternatives), and are qualified in their entirety by reference to the full text of the SPA, a copy of which is filed herewith as Exhibit 10.1 and incorporated herein by reference.



ITEM 8.01 OTHER EVENTS.
A copy of the press release relating to the SPA is filed as Exhibit 99.1 hereto and is incorporated herein by reference. Information included on Cheniere Partners' website is not incorporated herein by reference.



ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
d) Exhibits
Exhibit
Number     Description

10.1*      LNG Sale and Purchase Agreement (FOB), dated March 22, 2013, between
           Sabine Pass Liquefaction, LLC (Seller) and Centrica plc (Buyer).

99.1*      Press Release, dated March 25, 2013.

* Filed herewith.


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