EXHIBIT 10.42

PHANTOM UNITS AGREEMENT

Pursuant to the terms of the
Cheniere Energy Partners, L.P. Long-Term Incentive Plan

1.Grant of Phantom Units. Subject to and in accordance with the terms and
conditions of this document, Cheniere Energy Partners GP, LLC, a Delaware
limited liability company (“Company”), hereby awards to ___________________
(“Participant”) __________ phantom units, which are notional units of common
units (“Units”) of Cheniere Energy Partners, L.P. (the “Partnership”) (the
“Phantom Units”). This Phantom Units Agreement (“Phantom Units Agreement”) is
dated as of _______________, 20__. The Phantom Units are awarded pursuant to and
to implement in part the Cheniere Energy Partners, L.P. Long-Term Incentive Plan
(as amended and in effect from time to time, the “Plan”) and are subject to the
restrictions, forfeiture provisions and other terms and conditions of the Plan,
which is hereby incorporated herein and is made a part hereof, and this Phantom
Units Agreement. By execution of this Phantom Units Agreement, Participant
agrees to be bound by all of the terms, provisions, conditions and limitations
of the Plan as implemented by the Phantom Units Agreement, together with all
rules and determinations from time to time issued by the Committee pursuant to
the Plan. All capitalized terms have the meanings set forth in the Plan unless
otherwise specifically provided herein. All references to specified paragraphs
pertain to paragraphs of this Phantom Units Agreement unless otherwise provided.

2.Risk of Forfeiture. Participant shall immediately forfeit all rights to any
Phantom Units which have not vested and with respect to which the restrictions
thereon have not lapsed in the event of the termination, resignation, or removal
of Participant from employment with or services to Company and its Affiliates
under circumstances that do not cause Participant to become fully vested, and
the restrictions on such Phantom Units to lapse, under the terms of the Plan and
this Phantom Units Agreement.

3.Restricted Period; Vesting. Subject to the provisions of this Phantom Units
Agreement including, without limitation, the provisions of Paragraph 4,
Participant shall vest in his or her rights to the Phantom Units and the
restrictions imposed thereon shall lapse as follows: 25% of the Phantom Units
shall vest on the first anniversary of the date hereof, an additional 25% of the
Phantom Units shall vest on the second anniversary of the date hereof, an
additional 25% of the Phantom Units shall vest on the third anniversary of the
date hereof and the remainder of the Phantom Units shall vest on the fourth
anniversary of the date hereof. The period from the date hereof until the
Phantom Units have become one hundred percent (100%) vested and the restrictions
thereon have lapsed shall be referred to as the “Restricted Period.”

4.Termination of Employment or Services; Change in Control. Except as provided
otherwise in this Paragraph 4, if Participant’s service with Company and its
Affiliates shall be terminated for any reason, any unvested Phantom Units
outstanding at the time of such termination and all rights thereunder shall be
forfeited without payment under Paragraph 5 or 7 and no further vesting shall
occur; provided however, that any Phantom Units not then vested shall vest upon
the death or Disability of Participant. For purposes of this Phantom Units
Agreement, the term “Disability” as it relates to Participant shall mean that
Participant is “disabled” as described in accordance with Treasury Regulation
Section 1.409A-3(i)(4) and Section 409A(a)(2)(C) of the Code.

In the event of a Change in Control, any Phantom Units not then vested shall
vest upon the involuntary termination of Participant from service with Company
and its Affiliates by the Company or an Affiliate without Cause within one (1)
year from the effective date of such Change in Control. For purposes of this

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Phantom Units Agreement, the term “Cause” shall mean the commission of an act of
fraud or intentional misrepresentation or an act of embezzlement,
misappropriation or conversion of assets or opportunities of the Company or any
Affiliate.

5.Time and Form of Payment. To the extent a Phantom Unit shall become fully
vested and the restrictions imposed thereon shall have lapsed pursuant to
Paragraph 3 or Paragraph 4, Participant shall receive a single sum cash payment
in an amount equal to the Fair Market Value of a Unit on the applicable vesting
date. Such payment shall be made as soon as administratively practicable
following the applicable vesting date, but in no event later than the thirtieth
(30th) day following the date on which vesting occurs and the restrictions lapse
with respect to such Phantom Unit. Should Participant die before receiving all
amounts payable under this Paragraph 5, such amounts shall be paid to his
estate. Participant’s right to any amounts described in this Paragraph 5 shall
not rise above those of a general creditor of Company.

6.Transferability. Phantom Units shall not be transferable (by operation of law
or otherwise) by Participant or any other person claiming through or under
Participant, other than by Participant’s will or the laws of descent or
distribution. Any attempt to sell, assign, transfer, pledge, exchange,
hypothecate, or otherwise dispose of any Phantom Units shall be void and
unenforceable.

7.Ownership Rights and Distribution Equivalent Rights. A Phantom Unit is a
notional Unit of Company and, as a result, does not provide or give rise to any
right to a Unit or to receive the Fair Market Value of a Unit except as
specifically provided in the Plan and this Phantom Units Agreement. During the
Restricted Period, any distribution in the form of cash paid or delivered by the
Partnership on a Unit shall not entitle Participant to an equal amount of cash
with respect to each Phantom Unit.

8.Adjustment of Units. In the event of any distribution (whether in the form of
cash, Common Units, other securities, or other property), recapitalization,
split, reverse split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase, or exchange of Units or other securities of
Partnership, issuance of warrants or other rights to purchase Units or other
securities of Partnership, or other similar transaction or event affects the
Units, then the Committee shall, in such manner as it may deem equitable, make
adjustments to the terms and provisions of this Phantom Units Agreement pursuant
to Section 4(c) of the Plan in order to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under the Plan.

9.Certain Restrictions. By executing this Phantom Units Agreement, Participant
agrees that Participant will enter into such written representations, warranties
and agreements as Company may reasonably request in order to comply with the
Securities Act of 1933 or any other securities law or with this Phantom Units
Agreement. Participant agrees that Company shall not be obligated to take any
affirmative action in order to cause the Phantom Units subject to this Phantom
Units Agreement to comply with any law, rule or regulation.

10.Amendment and Termination. This Phantom Units Agreement may not be terminated
by the Company at any time without the written consent of Participant. This
Phantom Units Agreement may be amended in writing by Company and Participant,
provided Company may amend this Phantom Units Agreement unilaterally (i) if the
amendment does not adversely affect Participant’s rights hereunder in any
material respect, (ii) if Company determines that an amendment is necessary to
comply with Rule 16b-3 under the Exchange Act or other applicable law, or (iii)
if Company determines that an amendment is necessary to meet the requirements of
the Code or to prevent adverse tax consequences to Participant. No amendment or
termination of the Plan will adversely affect the rights and privileges of
Participant under this Phantom Units Agreement or to the Phantom Units granted
hereunder without the written consent of Participant.

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11.No Guarantee of Service. Neither this Phantom Units Agreement nor the award
of Phantom Units hereunder shall confer upon Participant any right with respect
to continuance of employment or other service with Company or any Affiliate, nor
shall it interfere in any way with any right Company or any Affiliate would
otherwise have to terminate such Participant’s employment or other service at
any time.

12.Section 409A of the Code. This Phantom Units Agreement is intended to be
written, administered, interpreted and construed in a manner such that no
payment or benefits provided under the Phantom Units Agreement become subject to
(a) the gross income inclusion set forth within Section 409A(a)(1)(A) of the
Code or (b) the interest and additional tax set forth within Section
409A(a)(1)(B) of the Code (collectively, “Section 409A Penalties”), including,
where appropriate, the construction of defined terms to have meanings that would
not cause the imposition of Section 409A Penalties. Notwithstanding anything to
the contrary in this Phantom Units Agreement, to the maximum extent permitted by
applicable law, the payments payable to Participant pursuant to this Phantom
Units Agreement shall be made in reliance upon Treasury Regulation Section
1.409A-1(b)(4) (relating to short-term deferrals). However, with respect to any
amounts payable to Participant under this Phantom Units Agreement in connection
with a termination of Participant’s service with Company that would be
considered “non-qualified deferred compensation” under Section 409A of the Code,
in no event shall a termination of service be considered to have occurred under
this Phantom Units Agreement unless such termination constitutes the
Participant’s “separation from service” with Company as such term is defined in
Treasury Regulation Section 1.409A-1(h), and any successor provision thereto.
For purposes of Section 409A of the Code (including, without limitation, for
purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii)), each payment that
Participant may be eligible to receive under this Phantom Units Agreement shall
be treated as a separate and distinct payment and shall not collectively be
treated as a single payment. Notwithstanding anything to the contrary contained
in this Phantom Units Agreement, with respect to any amounts payable to
Participant under this Phantom Units Agreement during a specified period of time
following the occurrence of a payment event, the actual date of payment during
such specified period will be determined by Company, in its sole and absolute
discretion.

13.Community Interest of Spouse. The community interest, if any, of any spouse
of Participant in any Phantom Units shall be subject to all of the terms,
conditions and restrictions of this Phantom Units Agreement and the Plan.

14.Severability. In the event that any provision of this Phantom Units Agreement
shall be held illegal, invalid, or unenforceable for any reason, such provision
shall be fully severable, but shall not affect the remaining provisions of this
Phantom Units Agreement, and this Phantom Units Agreement shall be construed and
enforced as of the illegal, invalid, or unenforceable provision had never been
included herein.

15.Governing Law. This Phantom Units Agreement shall be construed in accordance
with the laws of the State of Delaware to the extent federal law does not
supersede and preempt Delaware law.

COMPANY:

CHENIERE ENERGY PARTNERS GP, LLC

By:
 
 
Printed Name:
 
Title:
 
 
 
 
 
PARTICIPANT:
By:
 
 
 
(Signature)