Exhibit 10.8

November 9, 2006

 

Sabine Pass LNG, L.P.

717 Texas Avenue

Suite 3100

Houston, Texas 77002

Attention: President

 

Cheniere LNG, Inc.

717 Texas Avenue

Suite 3100

Houston, Texas 77002

Attention: President

 

  Re: Option Agreement dated December 23, 2003 (“Option Agreement”) between J&S
Cheniere, S.A. (“J&S Cheniere”) and Cheniere LNG, Inc. (“Cheniere LNG”)

Gentlemen:

This letter confirms our agreement with regard to the implementation of the
captioned Option Agreement as it applies to the option for vaporization capacity
in the Sabine Pass LNG terminal currently under construction in Cameron Parish,
Louisiana. This letter does not apply to any potential option of J&S Cheniere
under the Option Agreement for vaporization capacity which may be available at
the Corpus Christi LNG terminal currently under development.

1. As disclosed in the most recent Cheniere Energy, Inc. Annual Report on Form
10-K, the terms of the terminal use agreement contemplated by the Option
Agreement have not been negotiated or finalized, and it is anticipated that
definitive arrangements with J&S Cheniere with respect to the Sabine Pass LNG
Terminal will involve different terms and transaction structures then
contemplated in the Option Agreement.

2. The parties hereto agree to continue to negotiate in good faith the different
terms and transaction structures currently under discussion with J&S Cheniere as
an alternative method to satisfy the terms of the Option Agreement, as
applicable to the Sabine Pass LNG Terminal. To the extent required by any final
agreement with J&S Cheniere, Cheniere Marketing, Inc. (“Cheniere Marketing”)
agrees to make available and/or relinquish up to 200 mmcf/d of capacity under
its terminal use agreement with Sabine Pass LNG, L.P. (“Sabine Pass”) to satisfy
any agreement entered into with J&S Cheniere as a result of such negotiations.

3. If the different terms and transaction structures referred to in paragraph 2
above are not implemented with J&S Cheniere, Sabine Pass agrees, if required, to
assume the obligations of Cheniere LNG under the Option Agreement, but only as
it applies to the Sabine Pass LNG terminal. Cheniere LNG hereby consents to such
assumption by Sabine Pass, but only to the extent set forth in the preceding
sentence. In such event, if J&S

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Cheniere and Sabine Pass enter into a TUA pursuant to the Option Agreement,
Cheniere Marketing agrees to relinquish sufficient capacity, up to 200 mmcf/d,
under its terminal use agreement with Sabine Pass to allow Sabine Pass to
satisfy such TUA entered into between J&S Cheniere and Sabine Pass.

If the foregoing correctly reflects our understanding, kindly execute in the
space provided below and this letter will evidence our agreement as to the
Option and its implementation with regard to Sabine Pass.

 

Sincerely, Cheniere Marketing, Inc. By:  

/s/ Don A. Turkleson

Name:   Don A. Turkleson Title:   Chief Financial Officer

 

AGREED AS OF THE DATE FIRST ABOVE WRITTEN: Cheniere LNG, 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/ Don A. Turkleson

Name:   Don A. Turkleson Title:   Chief Financial Officer