----

----

| S | QUARTERLY      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF      1934 |
|---|---------------------------------------------------------------------------------------------------|

| ¨ | TRANSITION      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF      1934 |
|--------|----------------------------------------------------------------------------------------------------|

|                                                                |                                      |
|---------------------------------------------------------------------|-------------------------------------------|
| Delaware                                                            | 20-5913059                                |
| (State      or other jurisdiction of incorporation or organization) | (I.R.S.      Employer Identification No.) |
|                                                                |                                      |
| 700      Milam Street, Suite 800                                    |                                      |
| Houston,      Texas                                                 | 77002                                     |
| (Address      of principal executive offices)                       | (Zip      code)                           |

|                                                     |                                                                                                                                            |
|----------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------|
| Large      accelerated filer  ¨           | Accelerated      filer                    S |
| Non-accelerated      filer    ¨ | Smaller      reporting company  ¨                                                                                                |
| (Do      not check if a smaller reportingcompany)        |

----

| Item 1. | Consolidated      Financial Statements                                                                | 1      |
|--------------|-------------------------------------------------------------------------------------------------------|--------|
|         | Consolidated      Balance Sheets                                                                      | 1      |
|         | Consolidated      Statements of Operations                                                            | 2      |
|         | Consolidated      Statement of Partners’ Capital (Deficit)                                      | 3      |
|         | Consolidated      Statements of Cash Flows                                                            | 4      |
|         | Notes      to Consolidated Financial Statements                                                       | 5      |
|         |                                                                                                  |   |
| Item 2. | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations | 13     |
|         |                                                                                                  |   |
| Item 3. | Quantitative      and Qualitative Disclosures about Market Risk                                       | 24     |
|         |                                                                                                  |   |
| Item 4. | Disclosure      Controls and Procedures                                                               | 24     |

|         |                   |   |
|--------------|------------------------|--------|
| Item 1. | Legal      Proceedings | 25     |
|         |                   |   |
| Item 6. | Exhibits               | 25     |

----

|                                                                                                                                          |   | September      30,2009 |                                                                |   | December      31,2008 |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------|---------------------------------------------------------------------|--------|-----------------------|--------|
|                                                                                                                                          |   | (unaudited)            |                                                                |   |                  |   |
| ASSETS                                                                                                                                        |   |                   |                                                                |   |                  |   |
| CURRENT      ASSETS                                                                                                                           |   |                   |                                                                |   |                  |   |
| Cash      and cash equivalents                                                                                                                |   | $                      | 121,613                                                             |   |                  | $      | 7 |   |
| Restricted      cash and cash equivalents                                                                                                     |   |                   | 54,929                                                              |   |                  |   | 235,985 |   |
| Accounts      and interest receivable                                                                                                         |   |                   | 4,020                                                               |   |                  |   | 2,087 |   |
| Accounts      receivable—affiliate                                                                                                      |   |                   | 360                                                                 |   |                  |   | 419 |   |
| Advances      to affiliate                                                                                                                    |   |                   | 6,656                                                               |   |                  |   | 2,198 |   |
| Advances      to affiliate—LNG inventory                                                                                                |   |                   | 3,490                                                               |   |                  |   |           — |   |
| Prepaid      expenses and other                                                                                                               |   |                   | 4,109                                                               |   |                  |   | 5,407 |   |
| TOTAL      CURRENT ASSETS                                                                                                                     |   |                   | 195,177                                                             |   |                  |   | 246,103 |   |
| NON-CURRENT      RESTRICTED CASH AND CASH EQUIVALENTS                                                                                         |   |                   | 82,394                                                              |   |                  |   | 137,984 |   |
| NON-CURRENT      RESTRICTED U.S. TREASURY SECURITIES                                                                                          |   |                   |           — |   |                  |   | 20,829 |   |
| PROPERTY,      PLANT AND EQUIPMENT, NET                                                                                                       |   |                   | 1,605,079                                                           |   |                  |   | 1,517,507 |   |
| DEBT      ISSUANCE COSTS, NET                                                                                                                 |   |                   | 27,907                                                              |   |                  |   | 30,748 |   |
| ADVANCES      UNDER LONG-TERM CONTRACTS                                                                                                       |   |                   | 728                                                                 |   |                  |   | 10,705 |   |
| ADVANCES      TO AFFILIATE—LNG HELD FOR COMMISSIONING                                                                                   |   |                   |           — |   |                  |   | 9,923 |   |
| OTHER                                                                                                                                         |   |                   | 7,665                                                               |   |                  |   | 5,036 |   |
| TOTAL      ASSETS                                                                                                                             |   | $                      | 1,918,950                                                           |   |                  | $      | 1,978,835 |   |
|                                                                                                                                          |   |                   |                                                                |   |                  |   |   |   |
| LIABILITIES      AND PARTNERS’ DEFICIT                                                                                                  |   |                   |                                                                |   |                  |   |   |   |
| CURRENT      LIABILITIES                                                                                                                      |   |                   |                                                                |   |                  |   |   |   |
| Accounts      payable                                                                                                                         |   | $                      | 19                                                                  |   |                  | $      | 137 |   |
| Accounts      payable—affiliate                                                                                                         |   |                   | 658                                                                 |   |                  |   | 514 |   |
| Accrued      liabilities                                                                                                                      |   |                   | 74,540                                                              |   |                  |   | 40,926 |   |
| Accrued      liabilities—affiliate                                                                                                      |   |                   | 1,897                                                               |   |                  |   | 184 |   |
| Deferred      revenue                                                                                                                         |   |                   | 26,196                                                              |   |                  |   | 2,500 |   |
| Deferred      revenue—affiliate                                                                                                         |   |                   | 63,215                                                              |   |                  |   | 62,742 |   |
| Derivative      liabilities                                                                                                                   |   |                   | 409                                                                 |   |                  |   |           — |   |
| TOTAL      CURRENT LIABILITIES                                                                                                                |   |                   | 166,934                                                             |   |                  |   | 107,003 |   |
| LONG-TERM      DEBT, NET OF DISCOUNT                                                                                                          |   |                   | 2,109,493                                                           |   |                  |   | 2,107,673 |   |
| LONG-TERM      DEBT—RELATED PARTY, NET OF DISCOUNT                                                                                      |   |                   | 72,362                                                              |   |                  |   | 70,661 |   |
| LONG-TERM      DEBT—AFFILIATE                                                                                                           |   |                   |           — |   |                  |   | 2,372 |   |
| DEFERRED      REVENUE                                                                                                                         |   |                   | 34,500                                                              |   |                  |   | 37,500 |   |
| DEFERRED      REVENUE—AFFILIATE                                                                                                         |   |                   | 7,360                                                               |   |                  |   | 4,971 |   |
| OTHER      NON-CURRENT LIABILITIES                                                                                                            |   |                   | 331                                                                 |   |                  |   | 340 |   |
| COMMITMENTS      AND CONTINGENCIES                                                                                                            |   |                   |           — |   |                  |   |           — |   |
|                                                                                                                                          |   |                   |                                                                |   |                  |   |   |   |
| PARTNERS’      DEFICIT                                                                                                                  |   |                   |                                                                |   |                  |   |   |   |
| Common      unitholders (26,416,357 units issued and outstanding at September 30, 2009      and December 31, 2008)                       |   |                   | (40,166                                                             | )      |                  |   | (23,520 | ) |
| Subordinated      unitholders (135,383,831 units issued and outstanding at September 30,      2009 and December 31, 2008)                |   |                   | (420,223                                                            | )      |                  |   | (318,994 | ) |
| General      partner interest (2% interest with 3,302,045 units issued and outstanding      at September 30, 2009 and December 31, 2008) |   |                   | (11,641                                                             | )      |                  |   | (9,171 | ) |
| TOTAL      PARTNERS’ DEFICIT                                                                                                            |   |                   | (472,030                                                            | )      |                  |   | (351,685 | ) |
| TOTAL      LIABILITIES AND PARTNERS’ DEFICIT                                                                                            |   | $                      | 1,918,950                                                           |   |                  | $      | 1,978,835 |   |

----

|                                                                                                                                      |   | Three      Months EndedSeptember      30, |                                                                |   | Nine      Months EndedSeptember      30, |   |
|-------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------|---------------------------------------------------------------------|--------|------------------------------------------|--------|
|                                                                                                                                      |   | 2009                                      |                                                                |   | 2008                                     |   |   | 2009 |   |   | 2008 |   |
|                                                                                                                                      |   |                                      |                                                                |   |                                     |   |   |   |   |   |   |   |
| REVENUES                                                                                                                                  |   |                                      |                                                                |   |                                     |   |   |   |   |   |   |   |
| Revenues                                                                                                                                  |   | $                                         | 65,035                                                              |   |                                     | $      |           — |   |   | $ | 97,112 |   |   | $ |           — |   |
| Revenues—affiliate                                                                                                                  |   |                                      | 63,498                                                              |   |                                     |   |           — |   |   |   | 189,665 |   |   |   |           — |   |
| TOTAL      REVENUES                                                                                                                       |   |                                      | 128,533                                                             |   |                                     |   |           — |   |   |   | 286,777 |   |   |   |           — |   |
| EXPENSES                                                                                                                                  |   |                                      |                                                                |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| Operating      and maintenance expense                                                                                                    |   |                                      | 4,752                                                               |   |                                     |   | 3,256 |   |   |   | 14,445 |   |   |   | 3,434 |   |
| Operating      and maintenance expense—affiliate                                                                                    |   |                                      | 2,810                                                               |   |                                     |   | 447 |   |   |   | 8,393 |   |   |   | 447 |   |
| Depreciation      expense                                                                                                                 |   |                                      | 8,905                                                               |   |                                     |   | 1,874 |   |   |   | 22,711 |   |   |   | 1,911 |   |
| Development      expense                                                                                                                  |   |                                      |           — |   |                                     |   | 364 |   |   |   |           — |   |   |   | 1,140 |   |
| Development      expense—affiliate                                                                                                  |   |                                      |           — |   |                                     |   |           — |   |   |   |           — |   |   |   | 1,380 |   |
| General      and administrative expense                                                                                                   |   |                                      | 797                                                                 |   |                                     |   | 999 |   |   |   | 2,295 |   |   |   | 2,553 |   |
| General      and administrative expense—affiliate                                                                                   |   |                                      | 4,902                                                               |   |                                     |   | 3,086 |   |   |   | 14,887 |   |   |   | 6,009 |   |
| TOTAL      EXPENSES                                                                                                                       |   |                                      | 22,166                                                              |   |                                     |   | 10,026 |   |   |   | 62,731 |   |   |   | 16,874 |   |
|                                                                                                                                      |   |                                      |                                                                |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| INCOME      (LOSS) FROM OPERATIONS                                                                                                        |   |                                      | 106,367                                                             |   |                                     |   | (10,026 | ) |   |   | 224,046 |   |   |   | (16,874 | ) |
|                                                                                                                                      |   |                                      |                                                                |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| OTHER      INCOME (EXPENSE)                                                                                                               |   |                                      |                                                                |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| Interest      income                                                                                                                      |   |                                      | 65                                                                  |   |                                     |   | 2,169 |   |   |   | 883 |   |   |   | 12,218 |   |
| Interest      expense, net                                                                                                                |   |                                      | (38,089                                                             | )      |                                     |   | (17,704 | ) |   |   | (104,370 | ) |   |   | (47,557 | ) |
| Interest      expense, net—affiliate                                                                                                |   |                                      |           — |   |                                     |   | (33 | ) |   |   | (13 | ) |   |   | (72 | ) |
| Derivative      gain, net                                                                                                                 |   |                                      | 1,158                                                               |   |                                     |   | 14,692 |   |   |   | 4,482 |   |   |   | 2,325 |   |
| Other                                                                                                                                     |   |                                      |           — |   |                                     |   | 5 |   |   |   | 12 |   |   |   | 35 |   |
| TOTAL      OTHER EXPENSE                                                                                                                  |   |                                      | (36,866                                                             | )      |                                     |   | (871 | ) |   |   | (99,006 | ) |   |   | (33,051 | ) |
| NET      INCOME (LOSS)                                                                                                                    |   | $                                         | 69,501                                                              |   |                                     | $      | (10,897 | ) |   | $ | 125,040 |   |   | $ | (49,925 | ) |
|                                                                                                                                      |   |                                      |                                                                |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| Allocation      of net income (loss):                                                                                                     |   |                                      |                                                                |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| Limited      partners’ interest                                                                                                     |   |                                      | 68,111                                                              |   |                                     |   | (10,679 | ) |   |   | 122,539 |   |   |   | (48,927 | ) |
| General      partner’s interest                                                                                                     |   |                                      | 1,390                                                               |   |                                     |   | (218 | ) |   |   | 2,501 |   |   |   | (998 | ) |
| Net      income (loss) for partners                                                                                                       |   | $                                         | 69,501                                                              |   |                                     | $      | (10,897 | ) |   | $ | 125,040 |   |   | $ | (49,925 | ) |
|                                                                                                                                      |   |                                      |                                                                |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| Basic      and diluted net income (loss) per limited partner unit                                                                         |   | $                                         | 0.43                                                                |   |                                     | $      | (0.07 | ) |   | $ | 0.77 |   |   | $ | (0.31 | ) |
|                                                                                                                                      |   |                                      |                                                                |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| Weighted      average number of limited partner units outstanding used for basic and      diluted net income (loss) per unit calculation: |   |                                      |                                                                |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| Common      units                                                                                                                         |   |                                      | 26,416                                                              |   |                                     |   | 26,416 |   |   |   | 26,416 |   |   |   | 26,416 |   |
| Subordinated      units                                                                                                                   |   |                                      | 135,384                                                             |   |                                     |   | 135,384 |   |   |   | 135,384 |   |   |   | 135,384 |   |
|                                                                                                                                      |   |                                      | 161,800                                                             |   |                                     |   | 161,800 |   |   |   | 161,800 |   |   |   | 161,800 |   |

----

|                                   |   | CommonUnits |    |   | SubordinatedUnits |   |     | General      PartnerUnits |   |   | Total   |   |
|----------------------------------------|--------|-------------|---------|--------|-------------------|--------|----------|---------------------------|--------|--------|---------|--------|
| Balance      at December 31, 2008 |   | $           | (23,520 | )      |              | $      | (318,994 | )                         |   | $      | (9,171  | )      |   | $ | (351,685 | ) |
| Net      income                        |   |        | 20,006  |   |              |   | 102,533  |                      |   |   | 2,501   |   |   |   | 125,040 |   |
| Distributions                          |   |        | (33,680 | )      |              |   | (172,615 | )                         |   |   | (4,211  | )      |   |   | (210,506 | ) |
| Special      rights adjustment         |   |        | (2,972  | )      |              |   | (31,147  | )                         |   |   | (760    | )      |   |   | (34,879 | ) |
| Balance      at September 30, 2009     |   | $           | (40,166 | )      |              | $      | (420,223 | )                         |   | $      | (11,641 | )      |   | $ | (472,030 | ) |

----

|                                                                                                                                           |   |     Nine      Months Ended |                                                                |
|------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------|---------------------------------------------------------------------|
|                                                                                                                                           |   |     September      30,     |                                                                |
|                                                                                                                                           |   |                                           |     2009                                        |   |   |   |     2008 |   |
| CASH      FLOWS FROM OPERATING ACTIVITIES                                                                                                      |   |                                           |                                                                |   |   |   |
| Net      income (loss)                                                                                                                         |   | $                                              | 125,040                                                             |   |   | $ | (49,925 | ) |
| Adjustments      to reconcile net loss to net cash provided by (used in) operating      activities:                                            |   |                                           |                                                                |   |   |   |   |   |
| Depreciation                                                                                                                                   |   |                                           | 22,711                                                              |   |   |   | 1,911 |   |
| Non-cash      derivative (gain) loss                                                                                                           |   |                                           | 1,639                                                               |   |   |   | (3,751 | ) |
| Amortization      of debt issuance costs                                                                                                       |   |                                           | 2,863                                                               |   |   |   | 3,086 |   |
| Amortization      of debt discount                                                                                                             |   |                                           | 3,521                                                               |   |   |   |           — |   |
| Interest      income on restricted cash and cash equivalents                                                                                   |   |                                           |           — |   |   |   | (14,332 | ) |
| Use      of (investment in) restricted cash and cash equivalents                                                                               |   |                                           | (41,197                                                             | ) |   |   | 21,018 |   |
| Changes      in operating assets and liabilities:                                                                                              |   |                                           |                                                                |   |   |   |   |   |
| Accounts      and interest receivable                                                                                                          |   |                                           | 1,866                                                               |   |   |   | 2,555 |   |
| Accounts      receivable—affiliate                                                                                                       |   |                                           | 59                                                                  |   |   |   | (6,118 | ) |
| Accounts      payable and accrued liabilities                                                                                                  |   |                                           | 33,221                                                              |   |   |   | 26,236 |   |
| Accounts      payable and accrued liabilities—affiliate                                                                                  |   |                                           | 1,844                                                               |   |   |   | 8,536 |   |
| Advances      to affiliate                                                                                                                     |   |                                           | (4,458                                                              | ) |   |   | (2,544 | ) |
| Deferred      revenue                                                                                                                          |   |                                           | 21,170                                                              |   |   |   | 17,388 |   |
| Prepaid      and other                                                                                                                         |   |                                           | 72                                                                  |   |   |   | (5,534 | ) |
| NET      CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                                                                                       |   |                                           | 168,351                                                             |   |   |   | (1,474 | ) |
|                                                                                                                                           |   |                                           |                                                                |   |   |   |   |   |
| CASH      FLOWS FROM INVESTING ACTIVITIES                                                                                                      |   |                                           |                                                                |   |   |   |   |   |
| Use      of restricted cash and cash equivalents                                                                                               |   |                                           | 189,665                                                             |   |   |   | 357,520 |   |
| LNG      terminal construction-in-process, net                                                                                                 |   |                                           | (97,253                                                             | ) |   |   | (333,848 | ) |
| Advances      under long-term contracts                                                                                                        |   |                                           | (404                                                                | ) |   |   | (7,077 | ) |
| Advances      to affiliate—LNG held for commissioning, net of amounts transferred to LNG      receiving terminal construction-in-process |   |                                           |           — |   |   |   | (16,595 | ) |
| NET      CASH PROVIDED BY INVESTING ACTIVITIES                                                                                                 |   |                                           | 92,008                                                              |   |   |   |           — |   |
|                                                                                                                                           |   |                                           |                                                                |   |   |   |   |   |
| CASH      FLOWS FROM FINANCING ACTIVITIES                                                                                                      |   |                                           |                                                                |   |   |   |   |   |
| Distribution      to unitholders                                                                                                               |   |                                           | (210,506                                                            | ) |   |   | (34,368 | ) |
| Proceeds      from issuance of Sabine Pass LNG notes                                                                                           |   |                                           |           — |   |   |   | 144,965 |   |
| Borrowings      from long-term debt—affiliate                                                                                            |   |                                           | 114                                                                 |   |   |   | 1,472 |   |
| Repayment      of long-term debt—affiliate                                                                                               |   |                                           | (2,467                                                              | ) |   |   |           — |   |
| Debt      issuance costs                                                                                                                       |   |                                           | (23                                                                 | ) |   |   | (4,586 | ) |
| Affiliate      payable                                                                                                                         |   |                                           |           — |   |   |   | 1 |   |
| Special      rights adjustment                                                                                                                 |   |                                           | (34,879                                                             | ) |   |   |   |   |
| Use      of (investment in) restricted cash and cash equivalents                                                                               |   |                                           | 109,008                                                             |   |   |   | (106,012 | ) |
| NET      CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                                                                                       |   |                                           | (138,753                                                            | ) |   |   | 1,472 |   |
|                                                                                                                                           |   |                                           |                                                                |   |   |   |   |   |
| NET      INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                                                                      |   |                                           | 121,606                                                             |   |   |   | (2 | ) |
| CASH      AND CASH EQUIVALENTS—beginning of period                                                                                       |   |                                           | 7                                                                   |   |   |   | 13 |   |
| CASH      AND CASH EQUIVALENTS—end of period                                                                                             |   | $                                              | 121,613                                                             |   |   | $ | 11 |   |

----

----

----

|                                      |   | September      30,2009 |      |   | December      31,2008 |   |
|-------------------------------------------|--------|------------------------|-----------|--------|-----------------------|--------|
| LNG      TERMINAL COSTS                   |   |                   |      |   |                  |   |
| LNG      receiving terminal               |   | $                      | 1,596,236 |   |                  | $      | 919,776 |   |
| LNG      terminal construction-in-process |   |                   | 38,065    |   |                  |   | 604,398 |   |
| LNG      site and related costs, net      |   |                   | 178       |   |                  |   | 183 |   |
| Accumulated      depreciation             |   |                   | (30,084   | )      |                  |   | (7,752 | ) |
| Total      LNG terminal costs, net        |   |                   | 1,604,395 |   |                  |   | 1,516,605 |   |
|                                      |   |                   |      |   |                  |   |   |   |
| FIXED      ASSETS                         |   |                   |      |   |                  |   |   |   |
| Computer      and office equipment        |   |                   | 259       |   |                  |   | 200 |   |
| Vehicles                                  |   |                   | 421       |   |                  |   | 421 |   |
| Machinery      and equipment              |   |                   | 751       |   |                  |   | 751 |   |
| Other                                     |   |                   | 360       |   |                  |   | 254 |   |
| Accumulated      depreciation             |   |                   | (1,107    | )      |                  |   | (724 | ) |
| Total      fixed assets, net              |   |                   | 684       |   |                  |   | 902 |   |
|                                      |   |                   |      |   |                  |   |   |   |
| PROPERTY,      PLANT AND EQUIPMENT, NET   |   | $                      | 1,605,079 |   |                  | $      | 1,517,507 |   |

----

|                                 |   | September      30,2009 |   |   | December      31,2008 |   |
|--------------------------------------|--------|------------------------|--------|--------|-----------------------|--------|
| Interest      and related debt fees  |   | $                      | 55,349 |   |                  | $      | 14,152 |   |
| LNG      terminal construction costs |   |                   | 19,026 |   |                  |   | 26,617 |   |
| Affiliate                            |   |                   | 1,897  |   |                  |   | 184 |   |
| Other                                |   |                   | 165    |   |                  |   | 157 |   |
| Total accrued      liabilities       |   | $                      | 76,437 |   |                  | $      | 41,110 |   |

|                                                   | September      30,2009 |                | December      31,2008 |   |
|--------------------------------------------------------|------------------------|---------------------|-----------------------|--------|
| Senior      Notes, net of discount                     | $                      | 2,109,493           |                  | $      | 2,107,673 |   |
| Senior      Notes, net of discount—related party |                   | 72,362              |                  |   | 70,661 |   |
| Long-term      note—affiliate                    |                   | —   |                  |   | 2,372 |   |
| Total long-term debt, net of      discount             | $                      | 2,181,855           |                  | $      | 2,180,706 |   |

----

|                       |   | Quoted Prices inActive Markets forIdentical Instruments(Level      1) |   |   | Significant OtherObservable Inputs(Level      2) |   |    | SignificantUnobservableInputs(Level      3) |   |   | Total CarryingValue |   |
|----------------------------|--------|------------------------------------------------------------------------------------------------|--------|--------|------------------------------------------------------------|--------|---------|---------------------------------------------|--------|--------|--------------------------|--------|
| Derivatives      liability |   | $                                                                                              | 409    |   |                                                       | $      | — |                                        |   | $      | —                  |   |   | $ | 409 |   |

----

|                                         |   | September      30,2009 |                                                                |   | December      31,2008    |   |
|----------------------------------------------|--------|------------------------|---------------------------------------------------------------------|--------|--------------------------|--------|
|                                         |   | CarryingAmount         |                                                                |   | EstimatedFair      Value |   |   | CarryingAmount |   |   | EstimatedFair      Value |   |
| 2013      Notes (1)                          |   | $                      | 550,000                                                             |   |                     | $      | 492,250 |   |   | $ | 550,000 |   |   | $ | 412,500 |   |
| 2016      Notes, net of discount (1)         |   |                   | 1,631,855                                                           |   |                     |   | 1,387,077 |   |   |   | 1,628,334 |   |   |   | 1,204,967 |   |
| Note      to affiliate (2)                   |   |                   |           — |   |                     |   |           — |   |   |   | 2,372 |   |   |   | 2,379 |   |
| Restricted      U.S. Treasury securities (3) |   |                   |           — |   |                     |   |           — |   |   |   | 20,829 |   |   |   | 22,901 |   |

| (1) | The      fair value of the Senior Notes was based on quotations obtained from      broker-dealers who made markets in these and similar instruments as of      September 30, 2009 and December 31,2008. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | The      note to affiliate bears interest at a fixed 7½% rate. Management estimates      that the carrying amount is a reasonable approximation of the fair value      as of December 31, 2008. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | The      fair value of our restricted U.S. Treasury securities was based on      quotations obtained from broker-dealers who made markets in these and      similar instruments as of December 31,  2008. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                                                                    | Nine      Months EndedSeptember      30, |   |
|-----------------------------------------------------------------------------------------|------------------------------------------|--------|
|                                                                                    | 2009                                     |   | 2008 |   |
| Cash      paid for interest, net of amounts capitalized                                 |                                     | $      | 56,767 |   |   | $ | 6,104 |   |
| Construction-in-process      and debt issuance additions funded with accruedliabilities |                                     |   | 7,916 |   |   |   | 43,406 |   |

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|   | • | statements      regarding our ability to pay distributions to our    unitholders; |
|--------|---------|-----------------------------------------------------------------------------------|

|   | • | statements      regarding our estimate of the end of the subordination period related to      our subordinated units; |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------|

|   | • | statements      relating to the operation of the Sabine Pass liquefied natural gas (“LNG”)      receiving terminal, including statements concerning the costs related      thereto and certain characteristics, including amounts of regasification      and storage capacity; |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | statements      relating to the construction and operation of facilities related to the      Sabine Pass LNG receiving terminal; |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------|

|   | • | our      expected receipt of cash distributions from Sabine Pass LNG, L.P. (“Sabine      Pass LNG”); |
|--------|---------|------------------------------------------------------------------------------------------------------------------|

|   | • | statements      regarding any financing transactions or arrangements, or ability to enter      into such transactions orarrangements; |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------|

|   | • | statements      regarding any terminal use agreement (“TUA”) or other commercial      arrangements presently contracted, optioned or marketed or potential      arrangements to be performed substantially in the future, including any      cash distributions and revenues anticipated to be received and the      anticipated timing thereof, and statements regarding the amounts of LNG      regasification capacity that are, or may become, subject to TUAs or other      contracts; |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | statements      regarding counterparties to our TUAs, construction contracts and other      contracts; |
|--------|---------|--------------------------------------------------------------------------------------------------------|

|   | • | statements      regarding any business strategies, any business plans or any other plans,      forecasts, projections or objectives, any or all of which are subject to      change; |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | statements      regarding conflicts of interest with Cheniere Energy, Inc. (“Cheniere”)      and its affiliates; |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------|

|   | • | statements      regarding legislative, governmental, regulatory, administrative or other      public body actions, requirements, permits, investigations, proceedings or      decisions; and |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | any      other statements that relate to non-historical or future      information. |
|--------|---------|-------------------------------------------------------------------------------------|

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|   | • | receipt      of capacity reservation fee payments from Cheniere Marketing, Total and      Chevron; |
|--------|---------|----------------------------------------------------------------------------------------------------|

|   | • | purchase,      transportation and successful unloading of an additional LNG commissioning      cargo for the Sabine Pass LNG receiving  terminal; |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | commencement      of distributions to our subordinated unitholder;  and |
|--------|---------|-------------------------------------------------------------------------|

|   | • | substantially      completed construction and achieved full operability of the Sabine Pass      LNG receiving terminal with approximately 4.0 Bcf/d of total sendout      capacity and five LNG storage tanks with approximately 16.9 Bcf of      aggregate storage capacity. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | • | Total      has reserved approximately 1.0 Bcf/d of regasification capacity and has      agreed to make monthly capacity payments to Sabine Pass LNG aggregating      approximately $125 million per year for 20 years that commenced      April 1, 2009. Total, S.A. has guaranteed Total’s obligations under      its TUA up to $2.5 billion, subject to certain exceptions;    and |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Chevron      has reserved approximately 1.0 Bcf/d of regasification capacity and has      agreed to make monthly capacity payments to Sabine Pass LNG aggregating      approximately $125 million per year for 20 years that commenced      July 1, 2009. Chevron Corporation has guaranteed Chevron’s      obligations under its TUA up to 80% of the fees payable by      Chevron. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                                                                                                                            |   |     Nine      Months Ended     September      30, |                                                                |
|-------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------|---------------------------------------------------------------------|
|                                                                                                                                            |   |     2009                                                              |                                                                |   |     2008 |   |
| SOURCES      OF CASH AND CASH EQUIVALENTS                                                                                                       |   |                                                                                      |                                                                |   |   |   |
| Use      of restricted cash and cash equivalents                                                                                                |   | $                                                                                         | 298,673                                                             |   |   | $ | 357,520 |   |
| Borrowings      from long-term debt                                                                                                             |   |                                                                                      |           — |   |   |   | 144,965 |   |
| Borrowings      from long-term debt—affiliate                                                                                             |   |                                                                                      | 114                                                                 |   |   |   | 1,472 |   |
| Operating      cash flow                                                                                                                        |   |                                                                                      | 168,351                                                             |   |   |   |           — |   |
| Affiliate      payable                                                                                                                          |   |                                                                                      |           — |   |   |   | 1 |   |
|     Total      sources of cash and cash equivalents                                                                         |   |                                                                                      | 467,138                                                             |   |   |   | 503,958 |   |
|                                                                                                                                            |   |                                                                                      |                                                                |   |   |   |   |   |
| USES      OF CASH AND CASH EQUIVALENTS                                                                                                          |   |                                                                                      |                                                                |   |   |   |   |   |
| Distribution      to unitholders                                                                                                                |   |                                                                                      | (210,506                                                            | ) |   |   | (34,368 | ) |
| Special      rights adjustment                                                                                                                  |   |                                                                                      | (34,879                                                             | ) |   |   |           — |   |
| LNG      terminal construction-in-process, net                                                                                                  |   |                                                                                      | (97,253                                                             | ) |   |   | (333,848 | ) |
| Advances      to affiliate—LNG held for commissioning, net of transfers  to      LNG receiving terminal construction-in-process |   |                                                                                      |           — |   |   |   | (16,595 | ) |
| Investment      in restricted cash and cash equivalents                                                                                         |   |                                                                                      |           — |   |   |   | (106,012 | ) |
| Operating      cash flow                                                                                                                        |   |                                                                                      |           — |   |   |   | (1,474 | ) |
| Repayment      of long-term debt—affiliate                                                                                                |   |                                                                                      | (2,467                                                              | ) |   |   |           — |   |
| Advances      under long-term contracts                                                                                                         |   |                                                                                      | (404                                                                | ) |   |   | (7,077 | ) |
| Debt      issuance costs                                                                                                                        |   |                                                                                      | (23                                                                 | ) |   |   | (4,586 | ) |
|     Total      uses of cash and cash equivalents                                                                            |   |                                                                                      | (345,532                                                            | ) |   |   | (503,960 | ) |
|                                                                                                                                            |   |                                                                                      |                                                                |   |   |   |   |   |
| NET      INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                                                                       |   |                                                                                      | 121,606                                                             |   |   |   | (2 | ) |
| CASH      AND CASH EQUIVALENTS—beginning of period                                                                                        |   |                                                                                      | 7                                                                   |   |   |   | 13 |   |
| CASH      AND CASH EQUIVALENTS—end of period                                                                                              |   | $                                                                                         | 121,613                                                             |   |   | $ | 11 |   |

----

----

|                   |   |   |                                     |   |   |                       |   |   | Total      Distribution (in thousands) |   |
|------------------------|--------|--------|------------------------------------------|--------|--------|----------------------------|--------|--------|----------------------------------------|--------|
| Date      Paid         |   |   | Period      Covered by Distribution      |   |   | Distribution      Per Unit |   |   | Common      and General Partner Units  |   |   | Subordinated      Units |   |
| February      13, 2009 |   |   | October      1 – December 31, 2008 |   |   |                       | $      | 0.425  |                                   |   | $ | 12,630 |   |   | $ | 57,538 |   |
| May      15, 2009      |   |   | January      1 – March 31, 2009    |   |   |                       |   | 0.425  |                                   |   | $ | 12,630 |   |   | $ | 57,538 |   |
| August      14, 2009   |   |   | April      1 – June 30, 2009       |   |   |                       |   | 0.425  |                                   |   | $ | 12,630 |   |   | $ | 57,538 |   |

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| Item 3. | Quantitative      and Qualitative Disclosures About MarketRisk |
|--------------|----------------------------------------------------------------|

| Item 4. | Disclosure      Controls and Procedures |
|--------------|-----------------------------------------|

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| Item 1. | Legal      Proceedings |
|--------------|------------------------|

| Item 6. | Exhibits |
|--------------|----------|

|   |                                                                                                                                                                                                                                                                                                                                                                                                         |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.1   | Change      Order 61 to Lump Sum Turnkey Engineering, Procurement and Construction      Agreement dated December 18, 2004, between Sabine Pass LNG, L.P. and      Bechtel Corporation (Incorporated by reference to Exhibit 10.1 to Cheniere      Energy, Inc.’s Quarterly Report on Form 10-Q (SEC File No. 001-16383), for      the quarter ended September 30, 2009)                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.2   | Change      Order 62 to Lump Sum Turnkey Engineering, Procurement and Construction      Agreement dated December 18, 2004, between Sabine Pass LNG, L.P. and      Bechtel Corporation (Incorporated by reference to Exhibit 10.2 to Cheniere      Energy, Inc.’s Quarterly Report on Form 10-Q (SEC File No. 001-16383), for      the quarter ended September 30, 2009)                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.3   | Change      Orders 13, 14, 15 and 16 to Engineer, Procure and Construct (EPC) LNG Unit      Rates Soil Contract, dated July 21, 2006, between Sabine Pass LNG, L.P.      and Remedial Construction Services, L.P. (Incorporated by reference to      Exhibit 10.3 to Cheniere Energy, Inc.’s Quarterly Report on Form 10-Q (SEC      File No. 001-16383), for the quarter ended September 30,    2009) |
|   |                                                                                                                                                                                                                                                                                                                                                                                                         |
| 31.1   | Certification      by Chief Executive Officer required by Rule 13a-14(a) and 15d-14(a) under      the Exchange Act.                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                         |
| 31.2   | Certification      by Chief Financial Officer required by Rule 13a-14(a) and 15d-14(a) under      the Exchange Act.                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                         |
| 32.1   | Certification      by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as      adopted pursuant to Section 906 of the Sarbanes-Oxley Act of      2002.                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                         |
| 32.2   | Certification      of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as      adopted pursuant to Section 906 of the Sarbanes-Oxley Act of      2002.                                                                                                                                                                                                                                  |

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|   | CHENIERE      ENERGY PARTNERS, L.P.                                                                                     |
|--------|-------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                    |
|   | By:      Cheniere Energy Partners GP, LLC, its general partner                                                          |
|   |                                                                                                                    |
|   | /s/    JERRY D. SMITH                                       |
|   | Jerry      D. SmithChief      Accounting Officer (on behalf of the registrant and as principal      accounting officer) |
|   |                                                                                                                    |
|   | Date:      November 5, 2009                                                                                             |

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