Cheniere Energy Partners Sets IPO Terms

Cheniere Energy Partners, which will trade under the CQP ticker on NYSE, has announced the indicated terms of its pending and proposed IPO spin-off.  Cheniere Energy "Partners" is the formed Limited Partnership that will operate the LNG terminal being constructed in Cameron Parish, Louisiana on the Sabine Pass Channel. 

The Sabine Pass LNG receiving terminal will be the largest LNG receiving terminal in North America with approximately 4.0 billion cubic feet per day, or Bcf/d, of regasification capacity and approximately 16.8 Bcf of LNG storage capacity.  Its capacity has been contracted for under three 20-year firm commitment contracts with payments on a "take or pay" basis.  Each customer will be obligated to pay the full contracted amount of monthly fees whether or not it uses any of its reserved capacity.  These payments are expected to begin in Q3 2008.  Total LNG USA, Chevron USA, and Cheniere Marketing (subsidiary of Cheniere-LNG) are the three customers.

The IPO will be 12.5 million units, including 7.2 million from selling shareholders.  The company now has an expected price range of $19.00 to $21.00. Citigroup, Merrill Lynch, and Credit Suisse are the lead underwriters on the deal, and others in the syndicate are RBC Capital, Sanders Morris Harris, Stifel Nicolaus, Howard Weil, Pritchard, and FIG Partners.

Barring any major meltdown and barring any major changes in the energy markets, this deal should be coming to market very soon.  Cheniere Energy Inc. (LNG-AMEX) is the perceived backdoor play into this IPO.  The last prospectus on this one is massive, but you can access the SEC Filings here if you wish.

Jon C. Ogg
March 5, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.