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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): April 13, 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 (I.R.S. Employer
incorporation or organization) File 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 13e-4(c) 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.
On April 13, 2006, Corpus Christi LNG, LLC (Corpus Christi LNG), a
wholly-owned subsidiary of Cheniere Energy, Inc. (Company), entered into an
Engineering, Procurement and Construction Services Agreement for Preliminary
Work (EPCS Agreement) with La Quinta LNG Partners, LP (La Quinta). La Quinta is
a limited partnership whose general partners are Zachry Construction Corporation
and AMEC E&C Services, Inc. Under the terms of the EPCS Agreement, La Quinta
will provide Corpus Christi LNG with certain preliminary design, engineering and
site preparation work on a reimbursable basis in connection with preparing the
site of the liquefied natural gas (LNG) receiving terminal being developed by
Corpus Christi LNG near Corpus Christi, Texas. Payments anticipated to be made
by Corpus Christi LNG to La Quinta for work performed under EPCS Agreement are
not expected to exceed $50 million.
The following description of the EPCS Agreement is not complete and is
qualified in its entirety by reference to the EPCS Agreement.
SCOPE OF WORK
The work to be performed by La Quinta is limited in scope and will include
certain preliminary design, engineering, procurement, pipeline dismantlement,
removal and construction, road construction and site preparation work in
connection with the Corpus Christi LNG receiving terminal in accordance with the
requirements of the EPCS Agreement. La Quinta is required to perform its work in
accordance with good engineering and construction practices and applicable laws,
codes and standards.
COMMENCEMENT OF WORK
La Quinta will commence performance of the work under the EPCS Agreement
upon the execution of a mutually agreeable work order. The parties agree to
execute the first work order within seven days.
CHANGE ORDERS
Changes may be made to the scope of work of any work order by a mutually
accepted change order.
PAYMENT FOR WORK
Payments under the EPCS Agreement will be made in accordance with the
payment schedule set out in the EPCS Agreement.
WARRANTY
La Quinta warrants that:
o the equipment required for the Corpus Christi LNG receiving terminal will be
of new and of good quality;
o the work and the equipment will meet the requirements of the EPCS Agreement
and related work orders and change orders, including good engineering and
construction practices and applicable laws, codes and standards; and
o the work and the equipment will be free from encumbrances to title.
Until 18 months after completion, La Quinta will be liable to promptly
correct any work that is found defective.
TERMINATION RIGHTS
In the event of an uncured default by La Quinta, Corpus Christi LNG may
terminate the EPCS Agreement and take any of the following actions:
o take possession of the construction equipment, work product and copies of work
specific books and records;
o take assignment of any or all of the subcontracts; and/or
o complete the work.
Following any such termination, La Quinta shall reimburse Corpus Christi LNG for
any payments made to La Quinta for work that La Quinta did not perform prior to
the termination date.
Corpus Christi LNG also has the right to terminate all or a portion of the
work under the EPCS Agreement for its convenience. In the event of any such
termination for convenience, La Quinta would be paid the portion of the contract
price for the work performed prior to the termination date and actual costs
reasonably incurred by La Quinta on account of such termination, less that
portion of the contract price paid previously to La Quinta. La Quinta is not
entitled to receive any amount for unabsorbed overhead, contingency, risk or
anticipatory profits.
Corpus Christi LNG may, upon 30-days' written notice to La Quinta, suspend
all or any part of the work under the EPCS Agreement. In the event Corpus
Christi LNG suspends the entire work under the EPCS Agreement for a period
exceeding 120 days, La Quinta would be permitted to terminate the EPCS
Agreement. In the event of any such termination, La Quinta would be entitled to
the compensation described above with respect to any termination for
convenience. La Quinta may also suspend or terminate the EPCS Agreement upon the
occurrence of certain other events.
EXCUSABLE DELAY
If La Quinta experiences an excusable delay which prevents its performance
of any work under the EPCS Agreement or causes it to suspend its performance of
any such work, such suspension will not be considered a default under the EPCS
Agreement, so long as La Quinta uses all reasonable efforts to (i) mitigate the
effects of such excusable delay and (ii) recommence such affected work. An
excusable delay generally means any act or event that:
o is beyond the reasonable control of the affected party, not due to its fault
or negligence; and
o could not have been prevented or avoided by the affected party through the
exercise of due diligence.
Item 9.01. Financial Statements and Exhibits.
None.
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: April 13, 2006 By: /s/ Don A. Turkleson
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Name: Don A. Turkleson
Title: Senior Vice President
and Chief Financial Officer