Cheniere Energy Partners with Contango for Freeport LNG Terminal

Cheniere Energy, Inc. has sold to Contango Oil & Gas Company an option to purchase up to a 20% interest in Cheniere's planned LNG receiving and regasification terminal in Freeport, Texas. If Contango exercises this option it will pay Cheniere $3,000,000 prior to December 15, 2002 for the 20% interest. Additionally, Contango will contribute its proportionate share of all expenses incurred in developing the terminal as of January 1, 2002. Contango paid $750,000 at closing, which is refundable by July 2003, with interest, if Contango elects not to exercise its option.

Charles Reimer, President and CEO of Cheniere, said, "We are delighted that Contango is joining us as a partner in this project and we look forward to a successful association."

Cheniere is currently finalizing environmental studies conducted by Ecology and Environmental, Inc., and engineering work by Technip-Coflexip and will submit its application to the Federal Energy Regulatory Commission this summer. It has signed Memoranda of Understanding for offtake of 650 mmcf/day from the terminal with a variety of industrial utilities and pipeline users in Texas.