Cheniere Energy Inc. is evaluating ways to “optimize the value” of its Gulf Coast-based Sabine Pass LNG receiving terminal, which is scheduled to begin operations in April.

Regasification capacity at the liquefied natural gas (LNG) terminal is held under a long-term agreement by subsidiary Cheniere Marketing Inc., which has engaged Credit Suisse to act as its financial adviser in connection with the evaluation.

The Sabine Pass terminal, designed with a peak send-out capacity of 4.3 Bcf/d, is scheduled to ramp up with an initial send-out capacity of 2.6 Bcf/d (see Daily GPI, Nov. 13, 2007). Capacity at the terminal has been contracted under 20-year agreements: 2.0 Bcf/d by Cheniere Marketing and 1.0 Bcf/d each by Total Gas & Power North America Inc. and Chevron U.S.A. Inc.

“After three years of construction, the Sabine Pass LNG receiving terminal is about to be placed into service,” said Cheniere CEO Charif Souki. “Sabine Pass will be the largest LNG receiving terminal in North America by regasification capacity and will have 16.8 Bcf of LNG storage capacity with two berths capable of handling the largest LNG vessels.”

Souki noted that the Cameron Parish, LA, terminal is located on “853 acres of land remote from dense population and is just 3.7 miles from the open waters of the Gulf of Mexico. We do not believe that our current market valuation is reflective of the true value of this unique asset, and we are therefore exploring options to enhance value for our shareholders.”

On the news Cheniere’s share price Monday rose 7.48%, or $2.01/share, in heavy trading to close the day at $28.87. The company’s stock has traded as high as $43.50/share in the past year. Energy analysts have valued Cheniere’s stock price based on its current take-or-pay contracts with Chevron and Total. According to company filings, Cheniere expects to earn about $125 million/Bcf from its agreements with Chevron and Total, regardless of whether the two integrated producers ever import any gas through the facility.

The Sabine Pass LNG receiving terminal is owned by Cheniere Energy Partners LP, in which Cheniere Energy Inc. has a 90.6% stake. The company also founded and still holds a 30% limited partner interest in Freeport LNG terminal, which is located along the Texas coast. The Freeport terminal also is scheduled to be commissioned by mid-year.

Houston-based Cheniere has been developing a network of three LNG receiving terminals and related natural gas pipelines along the Gulf Coast for the past few years. Together the terminals are expected to have an aggregate send-out capacity of 9.9 Bcf/d. Cheniere has said it plans to leverage its terminal platform by pursuing related LNG business opportunities both upstream and downstream of the terminals.

According to the Energy Information Administration (EIA), the United States currently has about 1.9 Tcf of annual LNG delivery capacity, or about 5 Bcf/d, which is more than double the amount of current imports. By the end of this year, estimated U.S. capacity is expected to be at 4.2 Tcf annually, or about 12 Bcf/d. New capacity expected to be added this year includes Cheniere’s Sabine Pass, Freeport LNG, Cameron LNG and Northeast Gateway.

How much LNG eventually will land at U.S. receiving terminals has been hotly debated in the past few weeks by industry, government agencies and pundits. Some see a virtual tidal wave of supply making it to North America and driving domestic gas prices lower (see Daily GPI, Feb. 14a; Jan. 8), others, including the EIA, expect fewer cargoes because of the lofty prices and voracious demand of Western European and Asian markets (see Daily GPI, Feb. 13; Feb. 8). Energy industry pundits, meanwhile, say it is too early to tell how the LNG situation is going to play out (see Daily GPI, Feb. 14b).

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