----

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| 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 reporting company)       |

----

|         | PART I. FINANCIAL INFORMATION                                                               |   |
|--------------|---------------------------------------------------------------------------------------------|--------|
|         |                                                                                        |   |
| Item 1. | Consolidated Financial Statements                                                           | 3      |
|         | Consolidated Balance Sheets                                                                 | 3      |
|         | Consolidated Statements of Operations                                                       | 4      |
|         | Consolidated Statement of Partners’ Capital (Deficit)                                 | 5      |
|         | Consolidated Statements of Cash Flows                                                       | 6      |
|         | Notes to Consolidated Financial Statements                                                  | 7      |
|         |                                                                                        |   |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 14     |
|         |                                                                                        |   |
| Item 3. | Quantitative and Qualitative Disclosures about Market Risk                                  | 22     |
|         |                                                                                        |   |
| Item 4. | Disclosure Controls and Procedures                                                          | 22     |
|         |                                                                                        |   |
|         | PART II. OTHER INFORMATION                                                                  |   |
|         |                                                                                        |   |
| Item 1. | Legal Proceedings                                                                           | 22     |
|         |                                                                                        |   |
| Item 6. | Exhibits                                                                                    | 23     |

----

|                                                                                                                           |   | June 30,2009 |      |   | December 31,2008 |   |
|--------------------------------------------------------------------------------------------------------------------------------|--------|--------------|-----------|--------|------------------|--------|
|                                                                                                                           |   | (unaudited)  |      |   |             |   |
| ASSETS                                                                                                                         |   |         |      |   |             |   |
| CURRENT ASSETS                                                                                                                 |   |         |      |   |             |   |
| Cash and cash equivalents                                                                                                      |   | $            | 128,767   |   |             | $      | 7 |   |
| Restricted cash and cash equivalents                                                                                           |   |         | 13,732    |   |             |   | 235,985 |   |
| Accounts and interest receivable                                                                                               |   |         | 7,597     |   |             |   | 2,087 |   |
| Accounts receivable—affiliate                                                                                            |   |         | 338       |   |             |   | 419 |   |
| Advances to affiliate                                                                                                          |   |         | 4,597     |   |             |   | 2,198 |   |
| Prepaid expenses and other                                                                                                     |   |         | 5,812     |   |             |   | 5,407 |   |
| TOTAL CURRENT ASSETS                                                                                                           |   |         | 160,843   |   |             |   | 246,103 |   |
| NON-CURRENT RESTRICTED CASH AND CASH EQUIVALENTS                                                                               |   |         | 117,271   |   |             |   | 137,984 |   |
| NON-CURRENT RESTRICTED U.S. TREASURY SECURITIES                                                                                |   |         | —   |   |             |   | 20,829 |   |
| PROPERTY, PLANT AND EQUIPMENT, NET                                                                                             |   |         | 1,593,868 |   |             |   | 1,517,507 |   |
| DEBT ISSUANCE COSTS, NET                                                                                                       |   |         | 28,862    |   |             |   | 30,748 |   |
| ADVANCES UNDER LONG-TERM CONTRACTS                                                                                             |   |         | 2,697     |   |             |   | 10,705 |   |
| ADVANCES TO AFFILIATE—LNG HELD FOR COMMISSIONING                                                                         |   |         | 9,767     |   |             |   | 9,923 |   |
| OTHER                                                                                                                          |   |         | 7,414     |   |             |   | 5,036 |   |
| TOTAL ASSETS                                                                                                                   |   | $            | 1,920,722 |   |             | $      | 1,978,835 |   |
|                                                                                                                           |   |         |      |   |             |   |   |   |
| LIABILITIES AND PARTNERS’ DEFICIT                                                                                        |   |         |      |   |             |   |   |   |
| CURRENT LIABILITIES                                                                                                            |   |         |      |   |             |   |   |   |
| Accounts payable                                                                                                               |   | $            | 632       |   |             | $      | 137 |   |
| Accounts payable—affiliate                                                                                               |   |         | 722       |   |             |   | 514 |   |
| Accrued liabilities                                                                                                            |   |         | 41,115    |   |             |   | 40,926 |   |
| Accrued liabilities—affiliate                                                                                            |   |         | 1,324     |   |             |   | 184 |   |
| Deferred revenue                                                                                                               |   |         | 26,238    |   |             |   | 2,500 |   |
| Deferred revenue—affiliate                                                                                               |   |         | 63,299    |   |             |   | 62,742 |   |
| TOTAL CURRENT LIABILITIES                                                                                                      |   |         | 133,330   |   |             |   | 107,003 |   |
| LONG-TERM DEBT, NET OF DISCOUNT                                                                                                |   |         | 2,108,887 |   |             |   | 2,107,673 |   |
| LONG-TERM DEBT—RELATED PARTY, NET OF DISCOUNT                                                                            |   |         | 71,795    |   |             |   | 70,661 |   |
| LONG-TERM DEBT—AFFILIATE                                                                                                 |   |         | —   |   |             |   | 2,372 |   |
| DEFERRED REVENUE                                                                                                               |   |         | 35,500    |   |             |   | 37,500 |   |
| DEFERRED REVENUE—AFFILIATE                                                                                               |   |         | 7,360     |   |             |   | 4,971 |   |
| OTHER NON-CURRENT LIABILITIES                                                                                                  |   |         | 333       |   |             |   | 340 |   |
| COMMITMENTS AND CONTINGENCIES                                                                                                  |   |         | —   |   |             |   | — |   |
| PARTNERS’ DEFICIT                                                                                                        |   |         |      |   |             |   |   |   |
| Common unitholders (26,416,357 units issued and outstanding at June 30, 2009 and December 31, 2008)                       |   |         | (37,088   | )      |             |   | (23,520 | ) |
| Subordinated unitholders (135,383,831 units issued and outstanding at June 30, 2009 and December 31, 2008)                |   |         | (388,528  | )      |             |   | (318,994 | ) |
| General partner interest (2% interest with 3,302,045 units issued and outstanding at June 30, 2009 and December 31, 2008) |   |         | (10,867   | )      |             |   | (9,171 | ) |
| TOTAL PARTNERS’ DEFICIT                                                                                                  |   |         | (436,483  | )      |             |   | (351,685 | ) |
|                                                                                                                           |   |         |      |   |             |   |   |   |
| TOTAL LIABILITIES AND PARTNERS’ DEFICIT                                                                                  |   | $            | 1,920,722 |   |             | $      | 1,978,835 |   |

----

|                                                                                                                            |   | Three Months EndedJune 30, |    |   | Six Months EndedJune 30, |   |
|---------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------|---------|--------|--------------------------|--------|
|                                                                                                                            |   | 2009                       |    |   | 2008                     |   |   | 2009 |   |   | 2008 |   |
| REVENUES                                                                                                                        |   |                       |    |   |                     |   |   |   |   |   |   |   |
| LNG TUA revenue                                                                                                                 |   | $                          | 32,076  |   |                     | $      | — |   |   | $ | 32,076 |   |   | $ | — |   |
| LNG TUA revenue—affiliate                                                                                                 |   |                       | 63,619  |   |                     |   | — |   |   |   | 126,168 |   |   |   | — |   |
| TOTAL REVENUES                                                                                                                  |   |                       | 95,695  |   |                     |   | — |   |   |   | 158,244 |   |   |   | — |   |
| EXPENSES                                                                                                                        |   |                       |    |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Operating and maintenance expense                                                                                               |   |                       | 5,746   |   |                     |   | 174 |   |   |   | 9,693 |   |   |   | 178 |   |
| Operating and maintenance expense—affiliate                                                                               |   |                       | 2,973   |   |                     |   | — |   |   |   | 5,583 |   |   |   | — |   |
| Depreciation expense                                                                                                            |   |                       | 7,157   |   |                     |   | 19 |   |   |   | 13,806 |   |   |   | 37 |   |
| Development expense                                                                                                             |   |                       | — |   |                     |   | 234 |   |   |   | — |   |   |   | 770 |   |
| Development expense—affiliate                                                                                             |   |                       | — |   |                     |   | — |   |   |   | — |   |   |   | 1,387 |   |
| General and administrative expense                                                                                              |   |                       | 762     |   |                     |   | 707 |   |   |   | 1,498 |   |   |   | 1,554 |   |
| General and administrative expense—affiliate                                                                              |   |                       | 4,775   |   |                     |   | 1,614 |   |   |   | 9,986 |   |   |   | 2,922 |   |
| TOTAL EXPENSES                                                                                                                  |   |                       | 21,413  |   |                     |   | 2,748 |   |   |   | 40,566 |   |   |   | 6,848 |   |
| INCOME (LOSS) FROM OPERATIONS                                                                                                   |   |                       | 74,282  |   |                     |   | (2,748 | ) |   |   | 117,678 |   |   |   | (6,848 | ) |
|                                                                                                                            |   |                       |    |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| OTHER INCOME (EXPENSE)                                                                                                          |   |                       |    |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Interest income                                                                                                                 |   |                       | 259     |   |                     |   | 3,346 |   |   |   | 819 |   |   |   | 10,049 |   |
| Interest expense, net                                                                                                           |   |                       | (33,352 | )      |                     |   | (13,571 | ) |   |   | (66,281 | ) |   |   | (29,853 | ) |
| Interest expense, net—affiliate                                                                                           |   |                       | — |   |                     |   | (23 | ) |   |   | (13 | ) |   |   | (40 | ) |
| Derivative gain (loss), net                                                                                                     |   |                       | 762     |   |                     |   | (11,537 | ) |   |   | 3,324 |   |   |   | (12,367 | ) |
| Other                                                                                                                           |   |                       | — |   |                     |   | 20 |   |   |   | 12 |   |   |   | 31 |   |
| TOTAL OTHER EXPENSE                                                                                                             |   |                       | (32,331 | )      |                     |   | (21,765 | ) |   |   | (62,139 | ) |   |   | (32,180 | ) |
|                                                                                                                            |   |                       |    |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| NET INCOME (LOSS)                                                                                                               |   | $                          | 41,951  |   |                     | $      | (24,513 | ) |   | $ | 55,539 |   |   | $ | (39,028 | ) |
|                                                                                                                            |   |                       |    |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Allocation of net income (loss):                                                                                                |   |                       |    |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Limited partners’ interest                                                                                                |   |                       | 41,112  |   |                     |   | (24,023 | ) |   |   | 54,428 |   |   |   | (38,247 | ) |
| General partner’s interest                                                                                                |   |                       | 839     |   |                     |   | (490 | ) |   |   | 1,111 |   |   |   | (781 | ) |
| Net income (loss) for partners                                                                                                  |   | $                          | 41,951  |   |                     | $      | (24,513 | ) |   | $ | 55,539 |   |   | $ | (39,028 | ) |
|                                                                                                                            |   |                       |    |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Basic and diluted net income (loss) per limited partner unit                                                                    |   | $                          | 0.26    |   |                     | $      | (0.15 | ) |   | $ | 0.34 |   |   | $ | (0.24 | ) |
|                                                                                                                            |   |                       |    |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| 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                        |   |        | 8,886   |   |              |   | 45,542   |                 |   |   | 1,111   |   |   |   | 55,539 |   |
| Distributions                     |   |        | (22,454 | )      |              |   | (115,076 | )                    |   |   | (2,807  | )      |   |   | (140,337 | ) |
| Balance at June 30, 2009          |   | $           | (37,088 | )      |              | $      | (388,528 | )                    |   | $      | (10,867 | )      |   | $ | (436,483 | ) |

----

|                                                                                                                                 |   | Six Months June 30,                                         |     |
|--------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------|----------|
|                                                                                                                                 |   |           2009 |     |   |           2008 |   |
| CASH FLOWS FROM OPERATING ACTIVITIES                                                                                                 |   |                                                        |     |   |   |   |
| Net income (loss)                                                                                                                    |   | $                                                           | 55,539   |   |   | $ | (39,028 | ) |
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities:                                            |   |                                                        |     |   |   |   |   |   |
| Depreciation                                                                                                                         |   |                                                        | 13,806   |   |   |   | 37 |   |
| Non-cash derivative (gain) loss                                                                                                      |   |                                                        | 265      |   |   |   | 7,740 |   |
| Amortization of debt issuance costs                                                                                                  |   |                                                        | 1,909    |   |   |   | 1,898 |   |
| Interest income on restricted cash and cash equivalents                                                                              |   |                                                        | (2,120   | ) |   |   | (12,136 | ) |
| Use of (investment in) restricted cash and cash equivalents                                                                          |   |                                                        | —  |   |   |   | 67,988 |   |
| Amortization of debt discount                                                                                                        |   |                                                        | 2,347    |   |   |   | — |   |
| Changes in operating assets and liabilities:                                                                                         |   |                                                        |     |   |   |   |   |   |
| Accounts and interest receivable                                                                                                     |   |                                                        | 1,941    |   |   |   | 2,634 |   |
| Accounts payable and accrued liabilities                                                                                             |   |                                                        | (10,758  | ) |   |   | 3,571 |   |
| Accounts payable and accrued liabilities—affiliate                                                                             |   |                                                        | 1,324    |   |   |   | 2,526 |   |
| Accounts receivable—affiliate                                                                                                  |   |                                                        | 81       |   |   |   | — |   |
| Advances to affiliate                                                                                                                |   |                                                        | (2,399   | ) |   |   | (31,757 | ) |
| Deferred revenue                                                                                                                     |   |                                                        | 22,295   |   |   |   | 2,388 |   |
| Other                                                                                                                                |   |                                                        | (666     | ) |   |   | (6,689 | ) |
| NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                                                                                  |   |                                                        | 83,564   |   |   |   | (828 | ) |
|                                                                                                                                 |   |                                                        |     |   |   |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES                                                                                                 |   |                                                        |     |   |   |   |   |   |
| Use of restricted cash and cash equivalents                                                                                          |   |                                                        | 189,665  |   |   |   | 365,335 |   |
| LNG terminal construction-in-process, net                                                                                            |   |                                                        | (63,677  | ) |   |   | (292,447 | ) |
| Advances under long-term contracts                                                                                                   |   |                                                        | (145     | ) |   |   | (7,472 | ) |
| Purchases of LNG held for commissioning, net of amounts transferred to LNG terminal construction-in-process                          |   |                                                        | —  |   |   |   | (957 | ) |
| Advances to affiliate—LNG held for commissioning, net of amounts transferred to LNG receiving terminal construction-in-process |   |                                                        | (14,184  | ) |   |   | (64,459 | ) |
| NET CASH PROVIDED BY INVESTING ACTIVITIES                                                                                            |   |                                                        | 111,659  |   |   |   | — |   |
|                                                                                                                                 |   |                                                        |     |   |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES                                                                                                 |   |                                                        |     |   |   |   |   |   |
| Distribution to unitholders                                                                                                          |   |                                                        | (140,337 | ) |   |   | (22,912 | ) |
| Borrowings from long-term debt—affiliate                                                                                       |   |                                                        | 114      |   |   |   | 815 |   |
| Repayment of long-term debt—affiliate                                                                                          |   |                                                        | (2,467   | ) |   |   | — |   |
| Debt issuance costs                                                                                                                  |   |                                                        | (23      | ) |   |   | (13 | ) |
| Affiliate payable                                                                                                                    |   |                                                        | —  |   |   |   | 8 |   |
| Use of restricted cash and cash equivalents                                                                                          |   |                                                        | 76,250   |   |   |   | 22,925 |   |
| NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                                                                                  |   |                                                        | (66,463  | ) |   |   | 823 |   |
|                                                                                                                                 |   |                                                        |     |   |   |   |   |   |
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                                                                 |   |                                                        | 128,760  |   |   |   | (5 | ) |
| CASH AND CASH EQUIVALENTS—beginning of period                                                                                  |   |                                                        | 7        |   |   |   | 13 |   |
| CASH AND CASH EQUIVALENTS—end of period                                                                                        |   | $                                                           | 128,767  |   |   | $ | 8 |   |

----

----

|                                 |   | June 30,2009 |      |   | December 31,2008 |   |
|--------------------------------------|--------|--------------|-----------|--------|------------------|--------|
| LNG TERMINAL COSTS                   |   |         |      |   |             |   |
| LNG receiving terminal               |   | $            | 1,070,678 |   |             | $      | 919,776 |   |
| LNG terminal construction-in-process |   |         | 543,510   |   |             |   | 604,398 |   |
| LNG site and related costs, net      |   |         | 180       |   |             |   | 183 |   |
| Accumulated depreciation             |   |         | (21,306   | )      |             |   | (7,752 | ) |
| Total LNG terminal costs             |   |         | 1,593,062 |   |             |   | 1,516,605 |   |
|                                 |   |         |      |   |             |   |   |   |
| FIXED ASSETS                         |   |         |      |   |             |   |   |   |
| Computer and office equipment        |   |         | 256       |   |             |   | 200 |   |
| Vehicles                             |   |         | 421       |   |             |   | 421 |   |
| Machinery and equipment              |   |         | 751       |   |             |   | 751 |   |
| Other                                |   |         | 357       |   |             |   | 254 |   |
| Accumulated depreciation             |   |         | (979      | )      |             |   | (724 | ) |
| Total fixed assets, net              |   |         | 806       |   |             |   | 902 |   |
|                                 |   |         |      |   |             |   |   |   |
| PROPERTY, PLANT AND EQUIPMENT, NET   |   | $            | 1,593,868 |   |             | $      | 1,517,507 |   |

----

|                            |   | June 30,2009 |   |   | December 31,2008 |   |
|---------------------------------|--------|--------------|--------|--------|------------------|--------|
| Interest and related debt fees  |   | $            | 14,152 |   |             | $      | 14,152 |   |
| LNG terminal construction costs |   |         | 26,267 |   |             |   | 26,617 |   |
| Affiliate                       |   |         | 1,324  |   |             |   | 184 |   |
| Other                           |   |         | 696    |   |             |   | 157 |   |
| Accrued liabilities             |   | $            | 42,439 |   |             | $      | 41,110 |   |

|                                              |   | June 30,2009 |      |   | December 31,2008 |   |
|---------------------------------------------------|--------|--------------|-----------|--------|------------------|--------|
| Senior Notes, net of discount                     |   | $            | 2,108,887 |   |             | $      | 2,107,673 |   |
| Senior Notes, net of discount—related party |   |         | 71,795    |   |             |   | 70,661 |   |
| Long-term note—affiliate                    |   |         | —   |   |             |   | 2,372 |   |
| Total Long-term debt, net of discount             |   | $            | 2,180,682 |   |             | $      | 2,180,706 |   |

----

|               |   | Quoted Prices inActive Markets forIdentical Instruments(Level 1) |   |   | Significant OtherObservable Inputs(Level 2) |   |    | SignificantUnobservableInputs(Level 3) |   |   | Total CarryingValue |   |
|--------------------|--------|-------------------------------------------------------------------------------------------|--------|--------|-------------------------------------------------------|--------|---------|----------------------------------------|--------|--------|--------------------------|--------|
| Derivatives assets |   | $                                                                                         | 964    |   |                                                  | $      | — |                                   |   | $      | —                  |   |   | $ | 964 |   |

----

|                                    |   | June 30, 2009  |      |   | December 31, 2008   |   |
|-----------------------------------------|--------|----------------|-----------|--------|---------------------|--------|
|                                    |   | CarryingAmount |      |   | EstimatedFair Value |   |   | CarryingAmount |   |   | EstimatedFair Value |   |
| 2013 Notes (1)                          |   | $              | 550,000   |   |                | $      | 471,625 |   |   | $ | 550,000 |   |   | $ | 412,500 |   |
| 2016 Notes (1)                          |   |           | 1,630,682 |   |                |   | 1,341,236 |   |   |   | 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 June 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. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|                                                                                | Six Months EndedJune 30, |   |
|-------------------------------------------------------------------------------------|--------------------------|--------|
|                                                                                | 2009                     |   | 2008 |   |
| Cash paid for interest, net of amounts capitalized                                  |                     | $      | 62,014 |   |   | $ | 27,932 |   |
| Construction-in-process and debt issuance additions funded with accrued liabilities |                     |   | 25,217 |   |   |   | 77,368 |   |

----

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

|   | • | statements relating to the construction and operation of the Sabine Pass liquefied natural gas (“LNG”) receiving terminal, including statements concerning the completion or expansion thereof by certain dates or at all, the costs related thereto and certain characteristics, including amounts of regasification and storage capacity, the number of storage tanks and docks; |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | 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 or arrangements; |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------|

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

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

|   | • | the distributions to our subordinated unitholder. |
|--------|---------|---------------------------------------------------|

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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 commencing 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 |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | commencing July 1, 2009. Chevron Corporation has guaranteed Chevron’s obligations under its TUA up to 80% of the fees payable by Chevron. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                                       |   | Six Months EndedJune 30,                                    |     |
|----------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------|----------|
|                                                                                                                       |   |           2009 |     |   |           2008 |   |
| SOURCES OF CASH AND CASH EQUIVALENTS                                                                                       |   |                                                        |     |   |   |   |
| Use of restricted cash and cash equivalents                                                                                |   | $                                                           | 265,915  |   |   | $ | 388,260 |   |
| Operating cash flow                                                                                                        |   |                                                        | 83,564   |   |   |   | — |   |
| Borrowings under long-term debt—affiliate                                                                            |   |                                                        | 114      |   |   |   | 815 |   |
| Affiliate Payable                                                                                                          |   |                                                        | —  |   |   |   | 8 |   |
| Total sources of cash and cash equivalents                                                                                 |   |                                                        | 349,593  |   |   |   | 389,083 |   |
|                                                                                                                       |   |                                                        |     |   |   |   |   |   |
| USES OF CASH AND CASH EQUIVALENTS                                                                                          |   |                                                        |     |   |   |   |   |   |
| Distribution to unitholders                                                                                                |   |                                                        | (140,337 | ) |   |   | (22,912 | ) |
| LNG terminal construction-in-process, net                                                                                  |   |                                                        | (63,677  | ) |   |   | (292,447 | ) |
| Advances to affiliate—LNG held for commissioning, net of transfers to LNG receiving terminal construction-in-process |   |                                                        | (14,184  | ) |   |   | (64,459 | ) |
| Purchases of LNG held for commissioning, net of amounts transferred to LNG terminal construction-in- process               |   |                                                        | —  |   |   |   | (957 | ) |
| Operating cash flow                                                                                                        |   |                                                        | —  |   |   |   | (828 | ) |
| Repayment of long-term debt—affiliate                                                                                |   |                                                        | (2,467   | ) |   |   | — |   |
| Advances under long-term contracts                                                                                         |   |                                                        | (145     | ) |   |   | (7,472 | ) |
| Debt Issuance Costs                                                                                                        |   |                                                        | (23      | ) |   |   | (13 | ) |
| Total uses of restricted cash and cash equivalents                                                                         |   |                                                        | (220,833 | ) |   |   | (389,088 | ) |
|                                                                                                                       |   |                                                        |     |   |   |   |   |   |
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                                                       |   |                                                        | 128,760  |   |   |   | (5 | ) |
| CASH AND CASH EQUIVALENTS—beginning of period                                                                        |   |                                                        | 7        |   |   |   | 13 |   |
| CASH AND CASH EQUIVALENTS—end of period                                                                              |   | $                                                           | 128,767  |   |   | $ | 8 |   |

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| Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
|--------------|------------------------------------------------------------|

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

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

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| (a)   | Each of the following exhibits is filed herewith: |
|-----------------|---------------------------------------------------|

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.1   | Change Order 11 to Agreement for Engineering, Procurement, Construction and Management of Construction Services for the Sabine Pass 2 Receiving, Storage and Regassification Terminal Expansion, dated July 21, 2006, between Sabine Pass LNG, L.P. and Bechtel Corporation (Incorporated by reference to Exhibit 10.1 to Cheniere Energy, Inc.’sQuarterly Report on Form 10-Q (SEC File No. 001-16383), for the quarter ended June 30, 2009) |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 10.2   | Change Orders 9,10,11 and 12 to Engineer, Procure and Construct (EPC) LNG Unit Rate Soil Contract, dated July 21, 2006, between Sabine Pass LNG, L.P. and Remedial Construction Services, L.P. (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 endedJune 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: August 6, 2009                                                                                     |

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