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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 16, 2006
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CHENIERE ENERGY, INC.
(Exact name of registrant as specified in its charter)
Delaware 1-16383 95-4352386
(State or other jurisdiction of (Commission File (I.R.S. Employer
incorporation or organization) Number) Identification No.)
717 Texas Avenue
Suite 3100
Houston, Texas 77002
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 659-1361
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
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Item 1.01 Entry into a Material Definitive Agreement.
To the extent applicable, the information set forth in Item 8.01 of the Current
Report on Form 8-K is incorporated into this Item 1.01.
Item 8.01 Other Events.
On November 16, 2006, Cheniere Creole Trail Pipeline, L.P ("CCTP"), an indirect
wholly owned subsidiary of Cheniere Energy, Inc. ("Cheniere"), filed a motion
with the Federal Energy Regulatory Commission ("FERC") to partially vacate the
certificate of public convenience and necessity granted to CCTP by the FERC on
June 15, 2006 ("June 15 Certificate"). The June 15 Certificate authorized CCTP
to transport up to 3.3 Bcf/d of natural gas from the Creole Trail LNG receiving
terminal ("CTLNG Terminal") to downstream interconnects north and northeast of
the CTLNG Terminal. On August 4, 2006, CCTP also filed an application with the
FERC to add a segment connecting CCTP's pipeline with the previously authorized
Cheniere Sabine Pass Pipeline system at an interconnect near Johnson's Bayou,
Louisiana to the west of the CTLNG Terminal.
Cheniere Marketing, Inc. ("Cheniere Marketing"), an affiliate of CCTP, is
presently the sole contracted shipper on both components of the proposed Creole
Trail pipeline. Through discussions with Cheniere Marketing, CCTP determined
that a single pipeline to the north and northeast of the CTLNG Terminal (rather
than the dual pipeline as permitted under the June 15 Certificate), together
with the additional segment connecting CCTP's pipeline to the Cheniere Sabine
Pass Pipeline system to the west, will be sufficient for Cheniere Marketing to
satisfy its transportation requirements. This would result in a decrease in the
maximum design capacity of the pipeline extending to the north and northeast of
the CTLNG Terminal from 3.3 Bcf/d to 2.0 Bcf/d. Should market demand for
transportation service on the Creole Trail Pipeline increase as a result of the
CTLNG Terminal going into service, CCTP will seek additional FERC authorization
at that time to modify its receipt pattern and/or increase its pipeline capacity
as necessary to satisfy such demand. Once the CTLNG Terminal becomes
operational, the flow of gas on the Creole Trail Pipeline system may be
modified, with volumes moving both west and north/northeast from the CTLNG
Terminal, to accommodate the full sendout requirements of the CTLNG Terminal.
The increase in pressure resulting from operation of the CTLNG Terminal, in
conjunction with the modified receipt pattern, will enable CCTP to transport up
to 3.3 Bcf/d on a long term basis. Alternatively, CCTP may seek additional FERC
authorization to modify the Creole Trail pipeline via extension, looping and/or
compression addition as dictated by evolving market requirements.
In conjunction with its motion filed with the FERC, CCTP initiated discussions
with its suppliers furnishing the pipe for the Creole Trail pipeline. On
November 20, 2006, CCTP sent a proposal to ILVA S.p.A. ("ILVA") to amend the
previously disclosed ILVA purchase order dated August 4, 2006. The proposal
contained a notice in accordance with the purchase order terminating for
convenience 616,300 of the 952,700 feet of pipe originally required under the
purchase order. This partial termination will require CCTP to pay a $500,000
termination fee unless ILVA otherwise agrees in connection with CCTP's proposed
amendment.
Upon approval by the FERC of the motion and application referred to above, which
is anticipated in the first quarter of 2007, CCTP intends to begin construction
of the initial phase of the Creole Trail pipeline. The initial phase is expected
to include the segment connecting with the Cheniere Sabine Pass Pipeline system
approximately 18.1 miles to the west of the CTLNG Terminal as well as a segment
extending approximately 58.0 miles north and northeast from the CTLNG Terminal.
This initial phase is expected to be placed in service in the second quarter of
2008.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CHENIERE ENERGY, INC.
Date: November 22, 2006 By: /s/ Don A. Turkleson
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Name: Don A. Turkleson
Title: Senior Vice President
and Chief Financial
Officer