Exhibit 10.6

LOGO [g67853image001.jpg]

July 21, 2006

 

To:    Sabine Pass LNG, L.P.    From:    Societe Generale, New York Attn:    Mr.
Graham McArthur    Attn:    IRD Documentation    717 Texas Avenue    Tel:   
212-278-7145 / 7087 / 7182    Houston, TX 77002    Fax:    212-278-7650 Tel:   
(832) 204-2290       Fax:    (713) 659-5459      

 

Re: SGNY Ref # DFP0613413

 

Dear Mr. McArthur:

The purpose of this letter agreement (this “Confirmation”) is to confirm the
terms and conditions of the Swap Transaction entered into between us on the
Trade Date specified below (the “Transaction”).

The definitions and provisions contained in the 2000 ISDA Definitions, as
published by the International Swaps and Derivatives Association, Inc. (“ISDA”)
are incorporated in this Confirmation. In the event of any inconsistency between
those definitions and provisions and this Confirmation, this Confirmation will
govern.

This Confirmation constitutes a “Confirmation” as referred to in, and
supplements, forms part of and is subject to, the 1992 ISDA Master Agreement
dated as of February 25, 2005, as amended and supplemented from time to time
(the “Agreement”), between Societe Generale, New York Branch (“Party A”) and
Sabine Pass LNG, L.P. (“Party B”). All provisions contained in the Agreement
govern this Confirmation except as expressly modified below.

1. The terms of the particular Transaction to which this Confirmation relates
are as follows:

 

Notional Amount:

   See attached Notional Schedule

Trade Date:

   July 21, 2006

Effective Date:

   October 25, 2006

Termination Date:

   March 25, 2009, subject to adjustment in accordance with the Modified
Following Business Day Convention

Fixed Amounts:

  

Fixed Rate Payer:

   Party B

 

1

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Fixed Rate Payer Payment Dates:

   The 25th of each March and September, commencing March 25, 2007, up to and
including the Termination Date, subject to adjustment in accordance with the
Modified Following Business Day Convention

Fixed Rate:

   5.690%

Fixed Rate Day Count Fraction:

   Actual/360

Floating Amounts:

  

Floating Rate Payer:

   Party A

Floating Rate Payer Payment Dates:

   The 25th of each March and September, commencing March 25, 2007, up to and
including the Termination Date, subject to adjustment in accordance with the
Modified Following Business Day Convention

Floating Rate Option:

   USD-LIBOR-BBA

Floating Rate for initial

  

Calculation Period:

   To be determined

Designated Maturity:

   One month

Spread:

   None

Floating Rate Day Count Fraction:

   Actual/360

Reset Dates:

   The first day of each Calculation Period

Method of Averaging:

   Weighted

Compounding:

   Inapplicable

Business Days:

   New York and London

Calculation Agent:

   Party A, or as stated in the Agreement

 

2

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2. Account Details

 

Payments to Party A:

   Federal Reserve Bank of New York    ABA 026-004-226    F/O Societe Generale,
NY    Account No.: 9020721

Payments to Party B:

   PLEASE ADVISE

 

3. Offices:

 

  (a) The Office of Party A for the Transaction is New York; and

 

  (b) The Office of Party B for the Transaction is Houston, Texas.

 

4. Non-Reliance:

Each party represents that (i) it is not relying upon any advice (whether
written or oral) of the other party to this Transaction, other than the
representations expressly set forth in the Agreement or this Confirmation;
(ii) it has made its own decisions in entering into this Transaction based upon
advice from such professional advisors as it has deemed necessary; and (iii) it
understands the terms, conditions and risks of this Transaction and is willing
to assume (financially and otherwise) those risks.

Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing one copy of this Confirmation and returning it to us.

 

Yours sincerely,

SOCIETE GENERALE,

NEW YORK BRANCH

By:

 

/s/ Liliana Gowdie

Name:

  Liliana Gowdie

Title:

  Vice President

By:

 

/s/ Stacey Hughes

Name:

  Stacey Hughes

Title:

  Managing Director

Confirmed as of the date first written above:

 

SABINE PASS LNG, L.P. By:  

/s/ Graham McArthur

Name:   Graham McArthur Title:   Treasurer

 

3

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NOTIONAL SCHEDULE

 

Period Start
Date   Period End
Date   Rate Reset
Date   Payment
Date   Notional
Amount (USD) 10/25/2006   11/27/2006   10/23/2006     10,338,933 11/27/2006  
12/27/2006   11/23/2006     22,907,984 12/27/2006   1/25/2007   12/21/2006    
28,574,269 1/25/2007   2/26/2007   1/23/2007     37,895,858 2/26/2007  
3/26/2007   2/22/2007   3/26/2007   46,826,584 3/26/2007   4/25/2007   3/22/2007
    60,570,346 4/25/2007   5/25/2007   4/23/2007     70,193,862 5/25/2007  
6/25/2007   5/23/2007     88,165,136 6/25/2007   7/25/2007   6/21/2007    
93,981,320 7/25/2007   8/28/2007   7/23/2007     105,327,117 8/28/2007  
9/25/2007   8/23/2007   9/25/2007   111,713,348 9/25/2007   10/25/2007  
9/21/2007     119,675,507 10/25/2007   11/26/2007   10/23/2007     125,443,591
11/26/2007   12/27/2007   11/22/2007     141,914,888 12/27/2007   1/25/2008  
12/21/2007     142,634,770 1/25/2008   2/25/2008   1/23/2008     148,153,701
2/25/2008   3/25/2008   2/21/2008   3/25/2008   155,028,058 3/25/2008  
4/25/2008   3/19/2008     157,590,065 4/25/2008   5/27/2008   4/23/2008    
163,504,040 5/27/2008   6/25/2008   5/22/2008     183,468,801 6/25/2008  
7/25/2008   6/23/2008     189,220,065 7/25/2008   8/26/2008   7/23/2008    
195,670,330 8/26/2008   9/25/2008   8/21/2008   9/25/2008   201,152,786
9/25/2008   10/27/2008   9/23/2008     206,376,309 10/27/2008   11/25/2008  
10/23/2008     212,117,347 11/25/2008   12/29/2008   11/21/2008     230,844,731
12/29/2008   1/26/2009   12/23/2008     231,877,311 1/26/2009   2/25/2009  
1/22/2009     233,268,170 2/25/2009   3/25/2009   2/23/2009   3/25/2009  
275,000,000

 

4

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LOGO [g67853image001.jpg]

July 21, 2006

 

To:    Sabine Pass LNG, L.P.    From:    Societe Generale, New York Attn:    Mr.
Graham McArthur    Attn:    IRD Documentation    717 Texas Avenue    Tel:   
212-278-7145 / 7087 / 7182    Houston, TX 77002    Fax:    212-278-7650 Tel:   
(832) 204-2290       Fax:    (713) 659-5459      

 

Re: SGNY Ref # DFP0613416

 

Dear Mr. McArthur:

The purpose of this letter agreement (this “Confirmation”) is to confirm the
terms and conditions of the Swap Transaction entered into between us on the
Trade Date specified below (the “Transaction”).

The definitions and provisions contained in the 2000 ISDA Definitions, as
published by the International Swaps and Derivatives Association, Inc. (“ISDA”)
are incorporated in this Confirmation. In the event of any inconsistency between
those definitions and provisions and this Confirmation, this Confirmation will
govern.

This Confirmation constitutes a “Confirmation” as referred to in, and
supplements, forms part of and is subject to, the 1992 ISDA Master Agreement
dated as of February 25, 2005, as amended and supplemented from time to time
(the “Agreement”), between Societe Generale, New York Branch (“Party A”) and
Sabine Pass LNG, L.P. (“Party B”). All provisions contained in the Agreement
govern this Confirmation except as expressly modified below.

1. The terms of the particular Transaction to which this Confirmation relates
are as follows:

 

Notional Amount:

   See attached Notional Schedule

Trade Date:

   July 21, 2006

Effective Date:

   March 25, 2009

Termination Date:

   July 1, 2015, subject to adjustment in accordance with the Modified Following
Business Day Convention

Fixed Amounts:

  

Fixed Rate Payer:

   Party B

 

1

--------------------------------------------------------------------------------

Fixed Rate Payer Payment Dates:

   The 25th of each March and September, commencing September 25, 2009, up to
and including the Termination Date, subject to adjustment in accordance with the
Modified Following Business Day Convention

Fixed Rate:

   5.690%

Fixed Rate Day Count Fraction:

   Actual/360 Floating Amounts:   

Floating Rate Payer:

   Party A

Floating Rate Payer Payment Dates:

   The 25th of each March and September, commencing September 25, 2009, up to
and including the Termination Date, subject to adjustment in accordance with the
Modified Following Business Day Convention

Floating Rate Option:

   USD-LIBOR-BBA

Floating Rate for initial

  

Calculation Period:

   To be determined

Designated Maturity:

   Six month, except for the final Calculation Period which shall be linearly
interpolated

Spread:

   None

Floating Rate Day Count Fraction:

   Actual/360

Reset Dates:

   The first day of each Calculation Period

Compounding:

   Inapplicable Business Days:    New York and London Calculation Agent:   
Party A, or as stated in the Agreement 2. Account Details

Payments to Party A:

   Federal Reserve Bank of New York    ABA 026-004-226    F/O Societe Generale,
NY    Account No.: 9020721

 

2

--------------------------------------------------------------------------------

Payments to Party B:

   PLEASE ADVISE

 

3. Offices:

 

  (a) The Office of Party A for the Transaction is New York; and

 

  (b) The Office of Party B for the Transaction is Houston, Texas.

 

4. Non-Reliance:

Each party represents that (i) it is not relying upon any advice (whether
written or oral) of the other party to this Transaction, other than the
representations expressly set forth in the Agreement or this Confirmation;
(ii) it has made its own decisions in entering into this Transaction based upon
advice from such professional advisors as it has deemed necessary; and (iii) it
understands the terms, conditions and risks of this Transaction and is willing
to assume (financially and otherwise) those risks.

Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing one copy of this Confirmation and returning it to us.

 

Yours sincerely, SOCIETE GENERALE, NEW YORK BRANCH By:  

/s/ Liliana Gowdie

Name:   Liliana Gowdie Title:   Vice President By:  

/s/ Stacey Hughes

Name:   Stacey Hughes Title:   Managing Director

 

Confirmed as of the date first written above:

SABINE PASS LNG, L.P.

By:

 

/s/ Graham McArthur

Name:

  Graham McArthur

Title:

  Treasurer

 

3

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NOTIONAL SCHEDULE

 

Period Start
Date   Period End
Date  

Notional Amount

(USD)

3/25/2009   9/25/2009   275,000,000.00 9/25/2009   3/25/2010   279,668,745.00
3/25/2010   9/27/2010   284,495,060.00 9/27/2010   3/25/2011   289,484,264.00
3/25/2011   9/26/2011   294,641,853.00 9/26/2011   3/26/2012   299,973,510.00
3/26/2012   9/25/2012   625,000,000.00 9/25/2012   3/25/2013   625,000,000.00
3/25/2013   9/25/2013   323,472,096.00 9/25/2013   3/25/2014   316,642,080.00
3/25/2014   9/25/2014   309,601,618.00 9/25/2014   3/25/2015   302,303,968.00
3/25/2015   7/1/2015   294,766,974.00

 

4