Exhibit 10.9

Execution Copy

TAX SHARING AGREEMENT

Among and Between

Cheniere Energy, Inc.

AND

Sabine Pass LNG, L.P.

Dated as of November 9, 2006

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TAX SHARING AGREEMENT

This Tax Sharing Agreement (the “TSA”) entered into as of the 9th day of
November, 2006, to be effective as set forth in Section 6.1 of this TSA, between
Cheniere Energy Inc. (“Cheniere”) a Delaware corporation with its principal
office at 717 Texas Avenue, Suite 3100, Houston Texas 77002, and Sabine Pass
LNG, L.P., a Delaware limited partnership and its direct and indirect
subsidiaries (Sabine Pass LNG, L.P., together with its subsidiaries, the
“Partnership”), which may be collectively referred to hereinafter as the
“Parties” and individually as a “Party.”

PREAMBLE

WHEREAS, the revised franchise tax imposed by the State of Texas under Chapter
171 of the Texas Tax Code (“Franchise Tax”), generally effective for returns due
on or after January 1, 2008, requires taxable entities that are part of an
affiliated group engaged in a unitary business to report as a combined group;

WHEREAS, Cheniere owns a controlling interest in the Partnership within the
meaning of Texas Tax Code §171.0001(8) and expects to file Combined Returns for
the combined group that includes Cheniere and the Partnership; and

WHEREAS, the Parties believe that the apportionment and allocation of the
Franchise Tax between Cheniere and the Partnership is desirable.

NOW, THEREFORE, the Parties to this TSA, for good and valuable consideration,
agree as follows:

ARTICLE I

DEFINITIONS

In addition to any defined terms which may have their meanings ascribed to them
elsewhere in this TSA, the following defined terms shall have the following
meanings:

“Combined Return” means a Franchise Tax return which reflects combined reporting
that includes each of Cheniere’s and the Partnership’s reportable separate
company Taxable Margin that is required to be apportioned among and between
multiple taxing jurisdictions.

“Combined Return Year” means, with respect to the Franchise Tax, a period for
which Cheniere and the Partnership are required to file a Combined Return.

“Combined Tax Liability” means, for any Combined Return Year, the Franchise Tax
liability computed in accordance with Chapter 171 of the Texas Tax Code and
shown on Cheniere’s Combined Return, taking into account all credits to which
Cheniere is entitled under the Franchise Tax.

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“Indenture” means the Indenture dated as of November 9, 2006 among the
Partnership, the Guarantors (as defined therein) and The Bank of New York, as
trustee.

“IRS” means the Internal Revenue Service.

“Other Unitary Taxes” means a combined, consolidated or unitary state or local
tax other than the Franchise Tax based upon or measured by net income, gross
margins, gross receipts, or other similar tax attributes on an apportioned
basis.

“Other Unitary Return” means a tax return which reflects combined, consolidated
or unitary reporting of Cheniere and the Partnership in respect of Other Unitary
Taxes.

“Pro Forma Separate Company Tax Liability” means, for any tax year, the
Partnership’s separate company Franchise Tax liability computed by the
Partnership in accordance with Chapter 171 of the Texas Tax Code prepared on a
stand-alone basis that includes only the reportable Taxable Margin of the
Partnership, without regard to any temporary credits provided by Texas Tax Code
§171.111. In arriving at its Pro Forma Separate Company Tax Liability, the
Partnership shall be bound by any tax elections and shall adopt the same tax
accounting methods that are elected and adopted by Cheniere in the determination
of the Combined Tax Liability for such period.

“Separate Return Year” means, with respect to the Franchise Tax, a year which is
not a Combined Return Year.

“Taxable Margin” has the meaning set forth in Section 171.101 of the Texas Tax
Code.

“Taxing Authority” means, with respect to the Franchise Tax, the Texas
Comptroller of Public Accounts or, with respect to any Other Unitary Tax, the
governmental entity or political subdivision, agency, commission or authority
thereof that imposes such Other Unitary Tax, and the agency, commission or
authority charged with the assessment, determination or collection of such Other
Unitary Tax for such entity or subdivision.

ARTICLE II

FILING OF COMBINED RETURNS

2.1 Filing of Combined Returns and Payment of Tax.

(a) Cheniere shall prepare and timely file all required Combined Returns and
such applications for extension of time to file such Combined Returns and shall
timely pay the Combined Tax Liability. The Partnership agrees to furnish to
Cheniere all information as Cheniere may from time to time reasonably request
that is necessary to allow Cheniere to timely file all required Combined
Returns. The Partnership agrees to execute all election forms and other
documents which may be necessary or appropriate to evidence such elections or
otherwise as Cheniere may from time to time reasonably request.

 

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(b) Cheniere shall be authorized to and shall undertake the following actions in
connection with a Combined Return, including, without limitation:

 

  (i) taking any and all action necessary or incidental to the preparation and
filing of a Combined Return;

 

  (ii) making elections and adopting accounting methods;

 

  (iii) filing all extensions of time, including extensions of time for payment
of tax;

 

  (iv) filing claims for refund or credit; giving waivers or bonds;

 

  (v) managing audits and other administrative proceedings conducted by any
Taxing Authority;

 

  (vi) executing closing agreements, settlement agreements, offers in
compromise, and all other documents;

 

  (vii) obtaining administrative rulings; and

 

  (viii) contesting (both administratively and judicially) the proposal of
adjustments to tax liability and the assessment of any deficiency.

(c) Cheniere shall determine the tax consequences to the Partnership of any
audits, administrative or judicial proceedings that may affect the ultimate tax
liability of Cheniere.

2.2 Cooperation.

(a) The Partnership agrees to cooperate with Cheniere in filing any Combined
Return or consent or taking any other action contemplated by this TSA and agree
to take such action as Cheniere may reasonably request in connection therewith.

(b) The authorization and obligations set forth herein under Article II shall
survive the termination of this TSA with respect to any tax year (or portion
thereof) ending on or prior to termination of this TSA.

2.3 Standard of Care.

Cheniere shall perform all duties to be performed by Cheniere under this TSA
with a degree of skill, diligence and prudence.

ARTICLE III

ALLOCATION OF TAX LIABILITIES

3.1 Allocation of Combined Tax Liability to the Partnership.

(a) For Combined Returns first due on or after January 1, 2008, and for each
subsequent tax year for which this TSA may remain in effect, the Partnership,
for so long as it is included in a Combined Return, shall calculate and
determine its share of the Combined Tax Liability to be an amount equal to the
Pro Forma Separate Company Tax Liability. If the

 

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Partnership ceases to be included on a Combined Return during a tax year, the
Partnership shall calculate and determine its share of the Combined Tax
Liability to be that portion of the Partnership’s separate return tax liability
that is allocable to the portion of the tax year in which the Partnership was
included on a Combined Return. Calculations and determinations in this Article
III shall be made by the Partnership in each tax year pursuant to this paragraph
without regard to the actual Combined Tax Liability, if any, of Cheniere for
such year.

(b) The Partnership shall be liable for all Franchise Tax applicable to such
Party imposed with respect to all Separate Return Years.

ARTICLE IV

PAYMENTS

4.1 Payment of Tax by the Partnership.

If the Partnership has Pro Forma Separate Company Tax Liability (as determined
under Article III), it shall pay to Cheniere an amount equal to its Pro Forma
Separate Company Tax Liability if Cheniere, in its sole discretion, demands such
payment. To the extent permitted under the provisions of Section 4.07 of the
Indenture, the Partnership shall pay such amount to Cheniere on or before 45
days after the date for filing, including any extensions granted, the Combined
Return to which such payments relate.

4.2 Estimated Combined Tax Payments.

Cheniere shall have the right to assess the Partnership its share of estimated
Combined Tax payments to be made with respect to the projected Pro Forma
Separate Company Tax Liability for each Combined Year, and to the extent
permitted under the provisions of Section 4.07 of the Indenture, the Partnership
shall pay the amount of such assessment to Cheniere within 30 days after such
assessment if Cheniere, in its sole discretion, demands such payment. Cheniere
shall not make a demand for payment of estimated Combined Tax payments any
earlier than 15 days after Cheniere is required to make estimated tax payments
of its Combined Tax Liability to the relevant taxing authority. The Partnership
will receive credit for its payments of estimated Combined Tax in the
computation of the payments under Article III and Section 4.1 of this TSA.

ARTICLE V

ADJUSTMENTS TO COMBINED TAX LIABILITY

5.1 Recomputations.

If a Combined Tax Liability is adjusted for any taxable period, whether such
adjustment is by means of an amended return, claim for refund, examination by
the IRS or Taxing Authority, reduced to settlement or otherwise determined or
otherwise, the calculations made under this TSA shall be recomputed by giving
effect to such adjustments. In all cases the recomputations required by the
preceding sentence shall be performed consistently with the definition of
“Combined Tax Liability.”

 

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5.2 The Partnership’s Additional Tax Liability.

If, following such recomputation, the Parties determine that the Partnership is
liable for additional payments under this TSA, to the extent permitted under the
provisions of Section 4.07 of the Indenture the Partnership shall be obligated
to pay to Cheniere such additional amount within ninety (90) days after the
earlier of either of the following events which relate to such recomputation:
(i) Cheniere files an amended Combined Return; or (ii) Cheniere settles an
examination with the IRS or another Taxing Authority.

5.3 Interest and Penalties.

Any interest and/or penalty not specifically allocated to the Partnership by the
Taxing Authority may be allocated to the Partnership upon such basis as Cheniere
and the Partnership deem appropriate in view of all applicable circumstances.

ARTICLE VI

MISCELLANEOUS

6.1 Term of this Agreement.

This TSA is effective for the Franchise Tax Return first due on or after
January 1, 2008, and all subsequent years. As such, this TSA shall apply to all
taxable years or portions thereof for which a Combined Return was or is filed
with respect to the Partnership that was included as part of such return(s),
unless Cheniere and the Partnership agree in writing to another arrangement or
otherwise agree to terminate this TSA. Notwithstanding such termination, this
TSA shall continue in effect with respect to any payment or refund due for all
taxable periods prior to termination.

6.2 Assignability.

The rights and obligations under this TSA of the Parties may not be assigned or
otherwise transferred by a Party without the prior written and unanimous consent
of all other signatories to this TSA, provided, however, no consent from any
other Party shall be required with respect to any assignment and transfer to
Cheniere.

6.3 Effect of Changes to the Texas Tax Code.

Any alteration, modification, addition, deletion, or other change in the federal
income tax laws or regulations or the Texas Tax Code or regulations relating to
Franchise Tax shall automatically be applicable to this TSA, provided, however,
that if all the Parties to this TSA unanimously agree, this TSA shall be amended
or terminated in the event of any such alteration, modification, addition,
deletion or other change.

6.4 Other Unitary Taxes.

To the extent Cheniere is permitted or required to file an Other Unitary Return
with the

 

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Partnership on a consolidated, combined or unitary basis, the provisions of this
TSA relating to Franchise Tax matters shall apply to such Other Unitary Taxes as
if they were Franchise Taxes. If such an Other Unitary Return with respect to
Other Unitary Taxes is not filed, the responsible party as required by
applicable law shall be responsible for the reporting and payment of any Other
Unitary Taxes applicable to such party.

6.5 Record Retention.

The Partnership shall make available to Cheniere all materials (including,
without limitation, all books and records, accounting information, financial
statements, returns, supporting schedules, work papers, correspondence, and
other documents) relating to the Combined Returns filed for the taxable years
during which this TSA was in effect during regular business hours for a period
that is not less than the applicable federal record retention requirement
period.

6.6 Binding Effect.

This TSA shall be binding upon and inure to the benefit of the respective
successors and assigns of the Parties hereto; but no assignment shall relieve
any Party’s obligations hereunder without the written consent of the other
Parties. In the event that the Partnership is no longer required to be included
on a Combined Return with Cheniere, it shall be bound, nevertheless, by this TSA
with respect to any matter that involves a taxable year (or portion thereof)
during which it was included in a Combined Return.

6.7 Waivers, Etc.

The terms of this TSA may be waived, altered or amended only by an instrument in
writing duly executed by all of the Parties. Any such amendment or waiver shall
be binding upon all of the Parties.

6.8 Severability.

If any provision hereof is invalid and unenforceable in any jurisdiction, then,
to the fullest extent permitted by law:

(a) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in favor of the Parties in order
to carry out the intentions of the Parties hereto as nearly as may be possible;
and

(b) the invalidity or unenforceability of any provision hereof in any
jurisdiction shall not affect the validity or enforceability of such provision
in any other jurisdiction.

6.9 WAIVER OF JURY TRIAL.

THE PARTIES HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.

 

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6.10 Governing Law.

This TSA shall be governed by the laws of the State of Delaware.

[Signatures on following page]

 

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IN WITNESS THEREOF, the Parties hereto have caused their names to be subscribed
and executed by their respective authorized officers as indicated.

 

Cheniere Energy, Inc. By:  

/s/ Graham A. McArthur

Name:   Graham A. McArthur Title:   Treasurer Sabine Pass LNG, L.P.

By Sabine Pass LNG-GP, Inc.

its general partner:

By:  

/s/ Graham A. McArthur

Name:   Graham A. McArthur Title:   Treasurer

 

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