Cheniere Energy Partners, L.P. (Cheniere Partners) announced Monday that its subsidiary, Sabine Pass Liquefaction, LLC ("Sabine"), has entered into a non-binding memorandum of understanding (MOU) with Morgan Stanley Capital Group Inc. in connection with the potential acquisition by Morgan Stanley of certain import capacity and approximately twenty percent of a proposed 7.0 million tonnes per annum (mtpa) of LNG liquefaction capacity at the Sabine Pass LNG terminal located in Cameron Parish, Louisiana.
Consistent with the MOU, definitive agreements would provide Morgan Stanley the ability to export or import 1.7 mtpa of LNG from the proposed facility. The arrangement is subject to negotiation and execution of definitive agreements and certain other customary conditions to closing for transactions of this type including but not limited to the receipt by each party of requisite internal approvals, the receipt of necessary regulatory approvals and Sabine making a final investment decision to construct the liquefaction facilities. The MOU does not represent a final and binding agreement with respect to its subject matter.
"This is a significant development for our liquefaction project at Sabine Pass," said Charif Souki, Chairman and CEO of Cheniere Partners. "I am pleased with all of the progress we have made to date and look forward to continuing discussions with Morgan Stanley and with additional customers in order to advance with our project."
Cheniere Partners owns 100 percent of the Sabine Pass LNG terminal located in western Cameron Parish, Louisiana 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 liquefaction project would be designed and permitted for up to four modular LNG trains, each with a peak processing capacity of up to approximately 0.7 Bcf/d of natural gas and an average liquefaction capacity of approximately 3.5 mtpa. The initial project phase is anticipated to include two modular trains and the capacity to process on average approximately 1.2 Bcf/d of pipeline quality natural gas. Cheniere Partners intends to enter into contracts for at least 0.5 Bcf/d of natural gas liquefaction capacity per train in support of reaching a final investment decision regarding the development of the project. It believes that the time and cost required to develop its proposed liquefaction project would be materially lessened by Sabine Pass LNG's existing large acreage and infrastructure (docks, LNG storage tanks, power generation assets and pipeline connections). Cheniere Partners will fund development costs incurred during the assessment of this project using existing funds. The partnership will contemplate making a final investment decision to commence construction of the liquefaction facilities upon, among other things, achieving regulatory approval and entering into acceptable commercial and financing arrangements. It anticipates LNG export could commence as early as 2015.