NGI The Weekly Gas Market Report
Cheniere Energy Inc. said last week it has completed its initial public offering of 13.5 million common units of CQP stock representing limited partner interests in Cheniere Energy Partners LP at a price of $21 per common unit.
Of the 13.5 million common units sold, Cheniere Energy Partners sold 5.054 million units and Cheniere LNG Holdings LLC, a wholly owned subsidiary of Cheniere, sold 8.45 million units. Cheniere has also granted the underwriters a 30-day option to purchase up to an additional 2.025 million common units at the same price to cover overallotments.
The CQP IPO was announced in March and shares were up 82 cents, or 3.9%, to $21.82 on March 21 in its first day of trading. Last Monday, shares were near $21.50. Cheniere Energy Partners listed on the American Stock Exchange under the symbol “CQP.” Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Inc. and Credit Suisse Securities (USA) LLC acted as joint book-running managers and representatives of the underwriters. In addition, RBC Capital Markets Corp., Sanders Morris Harris Inc., Stifel, Nicolaus & Co. Inc., Howard Weil Inc., Pritchard Capital Partners LLC and FIG Partners LLC Energy Capital Group acted as co-managers for the offering.
Cheniere Energy Partners was spun off to develop, own and operate a new receiving liquefied natural gas terminal — known as the Sabine Pass terminal — under construction in Cameron Parish, LA. In July (see NGI, July 24, 2006), the company received Federal Energy Regulatory Commission approval to begin site preparation that would expand the send-out capacity of its Sabine Pass, LA LNG receiving terminal to 4 Bcf/d from 2.6 Bcf/d (see NGI, June 19).
Through its limited partnership Sabine Pass LNG LP, Cheniere began construction on the Sabine receiving terminal in March 2005 (see NGI, March 14, 2005). Located in western Cameron Parish, initial start-up of the 2.6 Bcf/d facility is targeted for early 2008. The expansion is expected to be completed in 2009.
Two other Cheniere limited partnerships, Creole Trail LNG LP and Cheniere Creole Trail Pipeline LP, were approved in June to site, construct and operate a 3.3 Bcf/d LNG receiving terminal and associated pipelines. The Creole Trail LNG receiving terminal will be located in central Cameron Parish at the mouth of the Calcasieu channel. The Creole Trail pipeline system consists of dual 42-inch-diameter gas pipelines designed to interconnect with more than 12 Bcf/d of interstate and intrastate pipeline infrastructure in southwest Louisiana.
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