Exhibit 10.4

LNG TERMINAL USE AGREEMENT

between

CHEVRON U.S.A. INC.

and

SABINE PASS LNG, L.P.

dated November 8, 2004

TABLE OF CONTENTS

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LNG TERMINAL USE AGREEMENT

This LNG TERMINAL USE AGREEMENT (“Agreement”), dated as of this 8^th day of November, 2004 (“Effective Date”) is made by and between Chevron U.S.A. Inc., a company incorporated under the laws of the state of Pennsylvania with an office at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (“Customer”); and Sabine Pass LNG, L.P., a Delaware limited partnership with a place of business at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇,  ▇▇▇▇▇ (“SABINE”).  Capitalized terms defined in Article 1 of Part Two of this Agreement shall have the meaning assigned therein for all purposes of this Agreement.

RECITALS

WHEREAS, SABINE intends to construct, own and operate an LNG terminal facility in Cameron Parish, Louisiana capable of performing certain LNG terminalling services, including: the berthing of LNG vessels; the unloading, receiving and storing of LNG; the regasification of LNG; and delivery of natural gas to the Delivery Point;

WHEREAS, Customer desires to purchase such LNG terminalling services from SABINE;

WHEREAS, SABINE desires to make such LNG terminalling services available to Customer and to Other Customers in accordance with the terms hereof; and

WHEREAS, as an essential inducement for SABINE entering into this Agreement, ChevronTexaco Corporation (“Guarantor”), will execute in favor of SABINE the Guarantee.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the Parties hereto and for the mutual covenants contained herein, SABINE and Customer hereby agree as follows:

PART ONE
PRINCIPAL COMMERCIAL TERMS AND CONDITIONS

The Parties hereby incorporate the General Terms and Conditions included as Part Two of this Agreement.

A.                                    Term

1.                                      General.  Subject to the provisions of this Agreement, the term of this Agreement (“Term”) shall consist of the Initial Term and, if applicable, any Extension Term.

2.                                      Initial Term.  The initial term of this Agreement (“Initial Term”) shall commence on the Effective Date and shall continue in full force and effect until the expiration of twenty (20) years from the Commercial Start Date.

3.                                      Extension Term.  Customer shall have the option of up to two (2) additional ten (10) year extension terms (each an “Extension Term”).  Customer must (a) notify SABINE in writing of its good faith desire to elect the applicable Extension Term at least five (5) years prior to the expiration of the then current Term and (b) no

later than four (4) years prior to the expiration of the then current Term send SABINE a binding confirmation (“Binding Confirmation”) that the Term is extended by an Extension Term.  Upon Customer’s delivery of a Binding Confirmation to SABINE, this Agreement will then be automatically extended for the applicable Extension Term.  The Fee for an Extension Term shall be determined in the same manner as the Fee for the Initial Term, except that the Reservation Fee shall be adjusted for inflation based on the increase in the United States Consumer Price Index (all Urban Consumers) from a basis set on January 1 following the Commercial Start Date to the beginning of such Extension Term.

B.                                    Services Quantity

1.                                      The “Maximum LNG Reception Quantity” shall be the quantity of LNG that Customer shall have the right to deliver to SABINE in any Contract Year which shall be 282,761,850 MMBTUs per Contract Year.

2.                                      The “Gas Redelivery Rate” shall be the quantity of Gas that Customer shall have the right to nominate for redelivery each day for its account at the Delivery Point and is equal to 759,500 MMBTUs per day.

C.                                    Fees

Each month during the Initial Term, the fees to be paid under this Agreement shall consist of the following:

1.                                      The “Reservation Fee” calculated as:

a.                                       The quotient of the Maximum LNG Reception Quantity divided by twelve (12), multiplied by the Unit Price;

b.                                      The “Unit Price” of U.S. twenty eight cents ($0.28) per MMBTU for the Initial Term and adjusted pursuant to Clause A for Extension Terms.

2.                                      An “Operating Fee” equal to the product of four cents ($0.04) multiplied by the amount calculated in Clause C.1.a above.  The Operating Fee shall be adjusted for inflation on January 1 of each Contract Year based on the increase in the United States Consumer Price Index (All Urban Consumers) from a basis set on January 1 of the year in which the Commercial Start Date occurs.

3.                                      “Retainage” equal to two percent (2%) of the LNG delivered at the Receipt Point for Customer’s account.  Included in such Retainage is fuel, including fuel for self-generated power or Gas unavoidably lost.

D.                                    Credit Support

As an essential inducement for SABINE entering into this Agreement, ChevronTexaco Corporation, a Delaware corporation (“Guarantor”), shall execute in favor of SABINE, the Guarantee attached as Exhibit C (“Guarantee”).

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E.                                      Notices

Pursuant to Article 23, the Parties have designated the following addresses for purposes of notices:

IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be duly executed and signed by its duly authorized officer as of the Effective Date.

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PART TWO
GENERAL TERMS AND CONDITIONS

ARTICLE 1
DEFINITIONS

In addition to any terms or expressions defined elsewhere in this Agreement, the terms or expressions set forth below shall have the following meanings in this Agreement:

1.1                               “Adverse Weather Conditions” means weather and sea conditions actually experienced at or near the Sabine Pass Facility that are sufficiently severe either: (a) to prevent an LNG Vessel from proceeding to berth, or unloading or departing from berth, in accordance with one or more of the following: (i) regulations published by a Governmental Authority; (ii) an Approval; or (iii) an order of a Pilot; or (b) to cause an actual determination by the master of an LNG Vessel that it is unsafe for such vessel to berth, unload or depart from berth.

1.2                               “Affiliate” means a Person (other than a Party) that directly or indirectly controls, is controlled by, or is under common control with, a Party to this Agreement, and for such purposes the terms “control”, “controlled by” and other derivatives shall mean the direct or indirect ownership of fifty percent (50%) or more of the voting rights in a Person.

1.3                               “Aggregate Contracted Capacity” means the sum of: (a) the Maximum LNG Reception Quantity of Customer; and (b) the maximum LNG reception quantity (or similar maximum contractual entitlement to receive LNG berthing, unloading and receipt services) of all Other Customers for the relevant Contract Year.

1.4                               “Agreement” means this agreement (including Part One and Part Two hereof), together with the Annexes and Exhibits attached hereto, which are hereby incorporated into and made a part hereof, as the same may be hereafter amended.

1.5                               “Annual Delivery Program” shall have the meaning set forth in Section 5.1(f).

1.6                               “Approvals” means all consents, authorizations, licenses, waivers, permits, approvals and other similar documents from or by a Governmental Authority.

1.7                               “Available Unloading Date” means at any time an Unloading Date at one of the two (2) berths that is not a Scheduled Arrival Date for Customer or one of the Other Customers at that berth.

1.8                               “Base Rate” means: (a) the interest rate per annum equal to the rate for three (3) month deposits in Dollars in the London Interbank Offered Rate Market, as reported in the Wall Street Journal on the  applicable date; plus (b) one percent (1%).  The Base Rate shall change as and when the underlying components thereof change, without notice to any Person.

1.9                               “British Thermal Unit” or “BTU” means the amount of heat required to raise the temperature of one (1) avoirdupois pound of pure water from 59.0 degrees Fahrenheit to 60.0 degrees Fahrenheit at an absolute pressure of 14.696 pounds per square inch.

1.10                        “Business Day” means any day that is not a Saturday, Sunday or legal holiday in the State of Texas, or a day on which banking institutions chartered by the State of Texas, or the United States of America, are legally required or authorized to close.

1.11                        “Cargo” means a quantity of LNG expressed in MMBTU carried by an LNG Vessel in relation to which SABINE will render Services to Customer hereunder.

1.12                        “Central Time” means U.S. Central Time, as adjusted for Daylight Saving Time and Standard Time.

1.13                        “Claims” shall have the meaning set forth in Section 9.2(a) of this Agreement.

1.14                        “Commercial Start Date” shall have the meaning set forth in Section 6.1.

1.15                        “Contract Year” means each annual period starting on January 1 and ending on December 31 during the Term of this Agreement; provided, however, that: (a) the first Contract Year shall commence on the Commercial Start Date and end on the following December 31; and (b) the last Contract Year shall commence on January 1 immediately preceding the last day of the Term and end on the last day of the Term as set forth in Clause A.

1.16                        “Cubic Meter” means a volume equal to the volume of a cube each edge of which is one (1) meter.

1.17                        “Customer” means Chevron U.S.A., Inc., unless and until substituted in whole by an assignee by novation in accordance with Section 17.3, whereupon such assignee shall become Customer to the extent of such assignment.

1.18                        “Customer’s Inventory” means, at any given time, the quantity in MMBTUs that represents LNG and Gas held by SABINE for Customer’s account.  Customer’s Inventory shall be determined after deduction of Retainage in accordance with Clause C.3.

1.19                        “Customer’s LNG” means, for the purposes of the Services, LNG received at the Receipt Point for Customer’s account.

1.20                        “Delivery Point” means the point of interconnect between the tailgate of the Sabine Pass Facility and a Downstream Pipeline.

1.21                        “Dispute” means any dispute, controversy or claim (of any and every kind or type, whether based on contract, tort, statute, regulation, or otherwise) arising out of, relating to, or connected with this Agreement, including any dispute as to the construction, validity, interpretation, termination, enforceability or breach of this Agreement, as well as any dispute over arbitrability or jurisdiction.

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1.22                        “Downstream Pipeline” means all Gas pipelines with a connection at the Delivery Point which transport Gas from the Sabine Pass Facility.

1.23                        “Effective Date” means the date set forth in the preamble of this Agreement.

1.24                        “Expected Receipt Quantity” means, with respect to a given Cargo, Customer’s reasonable estimate of the quantity of LNG (in MMBTUs) expected to be unloaded at the Receipt Point, as set forth in the notice delivered pursuant to Sections 5.1(b)(ii) and 5.2(a), as such notice may be subsequently amended pursuant to Section 8.4(a).

1.25                        “Extension Term” shall have the meaning set forth in Clause A.3.

1.26                        “Fee” shall have the meaning set forth in Section 4.1.

1.27                        “Force Majeure” shall have the meaning set forth in Section 15.1.

1.28                        “for Customer”, “for Customer’s account”, “on behalf of Customer” or other phrases containing similar wording shall include LNG delivered to the Sabine Pass Facility at Customer’s direction as well as Customer’s Inventory derived therefrom.

1.29                        “Gas” means any hydrocarbon or mixture of hydrocarbons consisting predominantly of methane which is in a gaseous state.

1.30                        “Gas Redelivery Rate” shall have the meaning set forth in Clause B.2.

1.31                        “Governmental Authority” means, in respect of any country, any national, regional, state, or local government, any subdivision, agency, commission or authority thereof (including any maritime authorities, port authority or any quasi-governmental agency) having jurisdiction over a Party, the Sabine Pass Facility, Customer’s Inventory, an LNG Vessel, a Transporter, or a Downstream Pipeline, as the case may be, and acting within its legal authority.

1.32                        “GPA” shall have the meaning set forth in Annex I.

1.33                        “Gross Heating Value” means the quantity of heat expressed in BTUs produced by the complete combustion in air of one (1) cubic foot of anhydrous gas, at a temperature of 60.0 degrees Fahrenheit and at an absolute pressure of 14.696 pounds per square inch, with the air at the same temperature and pressure as the gas, after cooling the products of the combustion to the initial temperature of the gas and air, and after condensation of the water formed by combustion.

1.34                        “Guarantee” means the Guaranty Agrement to be executed by Guarantor in favor of SABINE in the form attached as Exhibit C.

1.35                        “Guarantor” shall have the meaning set forth in Clause D.

1.36                        “▇▇▇▇▇ Hub Price” shall mean, with respect to any month, the final settlement price in dollars per MMBTU as published by the New York Mercantile Exchange for the ▇▇▇▇▇

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Hub Natural Gas futures contract for Gas to be delivered during such month, such final price to be based upon the last trading day for the contract for such month; provided, however, that if the ▇▇▇▇▇ Hub Natural Gas futures contract ceases to be traded, the Parties shall select a comparable index to be used in its place that maintains the intent and economic effect of the original index.

1.37                        “Initial Term” shall have the meaning set forth in Clause A.2.

1.38                        “International LNG Terminal Standards” means, to the extent not inconsistent with the express requirements of this Agreement, the international standards and practices applicable to the design, construction, equipment, operation or maintenance of LNG receiving and regasification terminals, established by the following (such standards to apply in the following order of priority): (i) a Governmental Authority having jurisdiction over SABINE; (ii) the Society of International Gas Tanker and Terminal Operators (“SIGTTO”); and (iii) any other internationally recognized non-governmental agency or organization with whose standards and practices it is customary for Reasonable and Prudent Operators of LNG receiving and regasification terminals to comply.  In the event of a conflict between any of the priorities noted above, the priority with the lowest roman numeral noted above shall prevail.

1.39                        “International LNG Vessel Standards” means, to the extent not inconsistent with the expressed requirements of this Agreement, the international standards and practices applicable to the ownership, design, equipment, operation or maintenance of LNG vessels established by the following (such standards to apply in the following order of priority): (i) a Governmental Authority; (ii) the International Maritime Organization; (iii) SIGTTO; and (iv) any other internationally recognized non-governmental agency or organization with whose standards and practices it is customary for Reasonable and Prudent Operators of LNG vessels to comply.  In the event of a conflict between any of the priorities noted above, the priority with the lowest roman numeral noted above shall prevail.

1.40                        “Lender” means any entity providing temporary or permanent debt financing to SABINE in connection with construction or refinancing of the Sabine Pass Facility.

1.41                        “Liabilities” means all liabilities, costs, claims, disputes, demands, suits, arbitrations, legal or administrative proceedings, judgments, damages, losses and expenses (including reasonable attorneys’ fees and other reasonable costs of arbitration, litigation or defense), and any and all fines, penalties and assessments of, or responsibilities to, Governmental Authorities.

1.42                        “Liquids” means liquid hydrocarbons capable of being extracted from LNG at the Sabine Pass Facility, consisting predominately of ethane, propane, butane and longer-chain hydrocarbons.

1.43                        “LNG” means Gas in a liquid state at or below its boiling point at a pressure of approximately one (1) atmosphere.

1.44                        “LNG Suppliers” means, in relation to performance of the obligations of SABINE and Customer under this Agreement, those Persons who agree in writing pursuant to an LNG

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purchase and sale agreement to supply or sell LNG to Customer for delivery to the Sabine Pass Facility.

1.45                        “LNG Vessel” means an ocean-going vessel suitable for transporting LNG that Customer or an LNG Supplier uses for transportation of LNG to the Sabine Pass Facility.

1.46                        “Loading Port” means the port at which a Cargo is loaded on board an LNG Vessel.

1.47                        “Maximum LNG Reception Quantity” has the meaning set forth in Clause B.1.

1.48                        “MMBTU” means 1,000,000 BTUs.

1.49                        “Notice of Readiness” or “NOR” shall have the meaning set forth in Section 8.5.

1.50                        “Operating Fee” shall have the meaning set forth in Clause C.2.

1.51                        “Other Customers” means, from time to time, Persons (other than Customer) purchasing LNG terminalling services from SABINE similar to the Services, regardless of the short-term or long-term duration of such terminal use agreement.

1.52                        “Party” and “Parties” means SABINE and Customer, and their respective successors and assigns.

1.53                        “Person” means any individual, sole proprietorship, corporation, trust, company, voluntary association, partnership, joint venture, limited liability company, unincorporated organization, institution, Governmental Authority or any other legal entity.

1.54                        “Pilot” means any Person engaged by Transporter to come on board an LNG Vessel to assist the master in pilotage, mooring and unmooring of such LNG Vessel.

1.55                        “Pilot Boarding Station” shall have the meaning set forth in Section 8.5(a).

1.56                        “Port Charges” means all charges of whatsoever nature (including rates, tolls, and dues of every description) in respect of an LNG Vessel entering or leaving the Sabine Pass Facility, including charges imposed by fire boats, tugs and escort vessels, the U.S. Coast Guard, a Pilot, and any other authorized Person assisting an LNG Vessel to enter or leave the Sabine Pass Facility.  Port Charges shall include port use fees, throughput fees and similar fees payable by users of the Sabine Pass Facility (or by SABINE on behalf of such users) to the West Cameron, Louisiana Port Commission and Jefferson County, Texas Waterway and Navigation District.

1.57                        “Proposed Arrival Date” means, for any applicable Contract Year, an arrival date proposed by Customer pursuant to Section 5.1.

1.58                        “psig” means pounds per square inch gauge.

1.59                        “Reasonable and Prudent Operator” means a Person seeking in good faith to perform

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its contractual obligations, and in so doing, and in the general conduct of its undertaking, exercising that degree of skill, diligence, prudence and foresight which would reasonably and ordinarily be expected from a skilled and experienced operator engaged in the same type of undertaking under the same or similar circumstances and conditions.

1.60                        “Receipt Point” means the point at the Sabine Pass Facility at which the flange coupling of the Sabine Pass Facility’s receiving line joins the flange coupling of the LNG unloading manifold on board an LNG Vessel.

1.61                        “Regasified LNG” means Gas derived from the conversion of LNG (received by SABINE at the Receipt Point) from its liquid state to a gaseous state.

1.62                        “Reservation Fee” shall have the meaning set forth in Clause C.1.

1.63                        “Retainage” shall have the meaning set forth in Clause C.3.

1.64                        “SABINE” means Sabine Pass LNG, L.P. and its successors and assigns.

1.65                        “Sabine Pass Facility” means the LNG receiving terminal facility as further described in Section 7.1(b) (including the port, berthing and unloading facilities, LNG storage facilities, and regasification facilities, together with equipment and facilities related thereto) necessary to provide Services hereunder, as such facilities will be constructed and modified from time to time in accordance with this Agreement.

1.66                        “Sabine Pass Marine Operations Manual” shall have the meaning set forth in Section 8.2.

1.67                        “Sabine Pass Services Manual” shall have the meaning set forth in Section 3.5.

1.68                        “Sabine Pass Website” means the internet based computer system used by SABINE to communicate with Customer and Other Customers regarding LNG terminalling services at the Sabine Pass Facility.

1.69                        “Scheduled Arrival Date” means, for any applicable Contract Year, an Unloading Date that is allocated either to Customer or any Other Customer pursuant to Section 5.1 or 5.2.

1.70                        “Scheduling Representative” means the individual appointed by Customer in accordance with Section 5.5.

1.71                        “Services” shall have the meaning set forth in Sections 2.1 and 3.1(b).

1.72                        “Services Unavailability” shall have the meaning set forth in Section 4.3.

1.73                        “Standard Cubic Foot” means the quantity of Gas, free of water vapor, occupying a volume equal to the volume of a cube whose edge is one (1) foot at a temperature of 60.0 degrees Fahrenheit and at an absolute pressure of 14.696 pounds per square inch.

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1.74                        “Storage” means the retention by SABINE of Customer’s Inventory at the Sabine Pass Facility.

1.75                        “Taxes” means all customs, taxes, royalties, excises, fees, duties, levies, sales and use taxes and value added taxes, charges and all other assessments, which may now or hereafter be enacted, levied or imposed, directly or indirectly, by a Governmental Authority, except Port Charges and taxes based on income, revenues, gross receipts or net worth and all state franchise, license and similar taxes required for the maintenance of corporate existence that are assessed against a Party.

1.76                        “Term” shall have the meaning set forth in Clause A.1.

1.77                        “Transporter” means any Person who owns or operates an LNG Vessel.

1.78                        “Unloading Date” means a twenty-four (24) hour window starting at 6:00 a.m., Central Time on a specified day and ending twenty-four (24) consecutive hours thereafter during which SABINE would commence to make available berthing and LNG unloading services at the Sabine Pass Facility to either Customer or one of the Other Customers.

ARTICLE 2
SERVICES AND SCOPE

2.1                               Services to be Provided by SABINE

During the Term and subject to the provisions of this Agreement, SABINE shall make available the following services to Customer (and any permitted assignee of Customer) (such available services being herein referred to as the “Services”) in the manner set forth herein:

(a)                                  access to a berth for LNG Vessels at the Sabine Pass Facility;

(b)                                 the unloading and receipt of LNG from LNG Vessels at the Receipt Point;

(c)                                  Storage of Customer’s Inventory;

(d)                                 the regasifying of LNG held in Storage;

(e)                                  the transportation and delivery of such Regasified LNG to the Delivery Point (it being acknowledged that SABINE may, at its option, cause Gas to be redelivered to Customer at the Delivery Point from sources other than Regasified LNG); and

(f)                                    other activities directly related to performance by SABINE of the foregoing, including metering, custody transfer and reporting.

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2.2                               Additional Services

From time to time during the Term, the representatives of SABINE and Customer may supplement this Agreement in accordance with Section 25.1 to provide that SABINE will also make available services to Customer in addition to the Services set forth in Section 2.1.

2.3                               Activities Outside Scope of this Agreement

The Parties confirm that the following activities, inter alia, are not Services provided by SABINE to Customer and, therefore, such activities are outside of the scope of this Agreement:

(a)                                  harbor, mooring and escort services, including those relating to tugs, service boats, fire boats, and other escort vessels;

(b)                                 the construction, operation, ownership, maintenance, repair and removal of facilities downstream of the Delivery Point;

(c)                                  the transportation of Gas beyond the Delivery Point;

(d)                                 the marketing of Gas and all activities related thereto (except as expressly provided in Section 3.4); and

(e)                                  the removal, marketing and transportation of Liquids and all activities related thereto.  On its own initiative or upon request by Customer, SABINE may investigate the construction of: (x) facilities to extract Liquids which are an integral part of the Sabine Pass Facility; or (y) facilities to extract Liquids which are a separate facility and project from the Sabine Pass Facility.  If SABINE elects to construct facilities to extract Liquids, the Parties shall negotiate a commercially reasonable arrangement to compensate SABINE for such facilities.  The arrangement shall provide Customer with the ability to receive its proportional share of Liquids in-kind with SABINE being paid a processing fee for the contract duration.  If the Parties do not negotiate such a commercially reasonable arrangement, SABINE shall nevertheless have the right to separate and/or extract Liquids from LNG upstream of the Delivery Point, provided that such separation does not result in Gas failing to meet the quality specifications at the Delivery Point required under Section 10.3 and provided, further, that SABINE delivers at the Delivery Point a quantity of Gas that is, less Retainage and Customer’s Inventory, the thermal equivalent of the quantity of LNG received by SABINE for Customer’s account at the Receipt Point.

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ARTICLE 3
SALE AND PURCHASE OF SERVICES

3.1                               Services

(a)                                  Purchase and Sale of Services.  During each Contract Year, SABINE shall make available to Customer, and Customer shall purchase and pay for in an amount equal to the Fee, the Services as described in Section 3.1(b).

(b)                                 Services.  The Services SABINE shall make available to Customer during each Contract Year, and Customer shall purchase and pay for pursuant to Section 4.1, shall consist of the following:

(i)                         Unloading of LNG.  SABINE shall make the Sabine Pass Facility available during a sufficient number of Unloading Dates during each Contract Year to permit the berthing, unloading and receipt as ratably as practical throughout such Contract Year of a quantity of Customer’s LNG equal to the Maximum LNG Reception Quantity; provided, however, that for purposes of the first and last Contract Years and any Contract Year that is a leap year, the Maximum LNG Reception Quantity shall be prorated based upon the ratio that the number of days during such Contract Year bears to three hundred sixty-five (365);

(ii)                      Redelivery of Gas.  Each day during the Contract Year SABINE shall make Gas from Customer’s Inventory available to Customer at the Delivery Point in the quantities nominated by Customer pursuant to Section 5.3 up to the lesser of the Gas Redelivery Rate or Customer’s remaining Inventory.

(c)                                  Excess Services.  Separate and apart from the provisions of Section 3.1(b), SABINE may, in its sole discretion, allow berthing, unloading and receipt of quantities of LNG in excess of the Maximum LNG Reception Quantity or redelivery of Gas in excess of the Gas Redelivery Rate in response to a request from Customer for such excess Services; provided, however that if such Excess Services are provided, such Excess Services shall be based on the order of receipt of a written request from Customer or Other Customers.  The fees applicable to such excess Services shall be as negotiated by the Parties in connection with such Services.

3.2                               Customer’s Use of Services Quantity

(a)                                  Use Generally.  Customer shall be entitled to use the Services in whole or in part by itself, or Customer may assign its rights and obligations as provided in Article 17.

(b)                                 Expiration of Services.  Subject to the provisions of Section 4.3(b), notwithstanding any other term or condition of this Agreement,  Customer’s failure or inability: (i) in any Contract Year to deliver Customer’s Maximum LNG Reception Quantity to SABINE; or (ii) on any day to nominate Gas for redelivery at the Delivery Point in an amount not to exceed the Gas Redelivery Rate, including any portion of the Services not used in connection with a Partial Assignment, shall not serve to increase or decrease the Services to which Customer is entitled under Section 3.1(b) in any subsequent time period.

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3.3                               No Pre-Delivery Right

On any given day during a Contract Year, Customer shall not be entitled to receive quantities of Gas in excess of Customer’s Inventory.

3.4                               Failure to Take Delivery of Gas at Delivery Point

If on any day Customer fails to take redelivery at the Delivery Point of at least ninety percent (90%) of the Gas nominated by Customer pursuant to Section 5.3 for redelivery to or for its account on such day and such failure is for reasons other than an event of Force Majeure or the inability of a Downstream Pipeline to take delivery of Customer’s Gas, such inability being not reasonably within the control of Customer, then SABINE may, at its sole discretion, take title to the quantity of Gas nominated for redelivery on such day but not taken free and clear of any Claims, and sell or otherwise dispose of such Gas using good faith efforts to obtain commercially reasonable prices and to minimize costs.  Customer shall indemnify, defend and hold harmless SABINE, its Affiliates, and their respective directors, officers, members and employees, for the actual and reasonable costs incurred by SABINE as a result of such sale or other disposition of same by SABINE.  SABINE shall, within fourteen (14) Business Days subsequent to the receipt by SABINE of such sale proceeds, remit to Customer the net proceeds from the sale or other disposition of Customer’s Inventory to which it takes title hereunder, minus actual transportation costs, third party charges, and an administrative fee of U.S. five cents ($0.05) per MMBTU, provided, however, that if the amount of the credit exceeds the amount due to SABINE under the next monthly statement, then SABINE agrees to pay any such excess amount to Customer within five (5) Business Days after delivery of such monthly statement.

In the event SABINE is required to dispose of Customer’s Gas more than three (3) times in any Contract Year, the administrative fee shall be increased to U.S. ten cents ($0.10) for each occasion thereafter in such Contract Year.

3.5                               Sabine Pass Services Manual

Acting as a Reasonable and Prudent Operator, SABINE shall develop, maintain and revise from time to time a single services manual (the “Sabine Pass Services Manual”) applicable to Customer and all Other Customers which contains detailed implementation procedures consistent with the terms and provisions of this Agreement necessary for performance of this Agreement with regard to the matters set forth in Exhibit A attached hereto (but excluding the matters governed by the Sabine Pass Marine Operations Manual).  In developing such manual, SABINE shall provide Customer with a preliminary draft of the same (the “Preliminary Services Manual”).  If Customer desires to provide comments to SABINE regarding the contents of the Preliminary Services Manual Customer shall, no later than fifteen (15) days from receipt of such manual from SABINE, notify SABINE in writing of its desire to provide comments on the Preliminary Services Manual. In such event, within thirty (30) days of receipt of Customer’s notice, SABINE shall convene a meeting with Customer to discuss Customer’s comments. If (a) Customer does not submit the foregoing notice to SABINE

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on a timely basis or (b) Customer and SABINE meet and are able to agree upon revisions to the Preliminary Services Manual, then such manual, as so revised, shall constitute the Sabine Pass Services Manual.  If Customer and SABINE are unable to reach agreement upon revisions to the Preliminary Service Manual or any revisions thereto, SABINE shall determine the content of the Sabine Pass Services Manual, using commercially reasonable efforts to accommodate Customer’s comments.  In the event SABINE intends to amend the Sabine Pass Services Manual, SABINE shall follow the same procedure as set forth above in relation to the Preliminary Services Manual.  SABINE shall deliver to Customer and all Other Customers a copy of the Sabine Pass Services Manual and any amendments thereto promptly after they have been finalized or amended, as the case may be. SABINE and Customer shall comply with such Sabine Pass Services Manual in all respects.  The Sabine Pass Services Manual shall be developed on a basis that is consistent with this Agreement; however, in the event of a conflict between the terms of this Agreement and the Sabine Pass Services Manual, the terms of this Agreement shall control.

ARTICLE 4
COMPENSATION FOR SERVICES

4.1                               Fee

Commencing with the Commercial Start Date, in the event the Sabine Pass Facility has reached commercial operation by that date and, if not, on the date it reaches such commercial operation, each month Customer shall, as full compensation for the performance by SABINE of its obligations under this Agreement, bear the Retainage and in addition pay to SABINE the sum of the following three (3) components (such sum collectively referred to as the “Fee”):

(a)                                  the Reservation Fee paid monthly in advance;

(b)                                 the Operating Fee paid monthly in advance; and

(c)                                  any additional costs incurred under Section 4.2 herein.

4.2                               SABINE Taxes and New Regulatory Costs

If, subsequent to the Effective Date, any Governmental Authority:

(a)                                  imposes any Taxes on SABINE (excluding any Taxes on the capital revenue or income derived by SABINE) with respect to the Services, or the Sabine Pass Facility (“SABINE Taxes”); or

(b)                                 enacts any safety or security related regulation which materially increases the costs of SABINE in relation to the Services or the Sabine Pass Facility (“New Regulatory Costs”);

then Customer shall bear such SABINE Taxes and New Regulatory Costs proportionately with Other Customers with Customer’s share being determined for the given Contract Year based on the following ratio:

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(x)                                   Maximum LNG Reception Quantity; divided by

(y)                                 the sum of the Maximum LNG Reception Quantity plus the aggregate quantity of LNG contracted at the Sabine Pass Facility for the account of each Other Customer in such Contract Year.

Provided, however, in no event shall Customer’s share of SABINE Taxes and New Regulatory Costs under this Section 4.2 be in excess of twenty eight percent (28%) of such SABINE Taxes and New Regulatory Costs.  For the purposes hereof, SABINE Taxes shall include the inability to obtain (after using commercially reasonable efforts), or the loss or expiration (other than as a consequence of the fault or omission of SABINE) of any abatement of Taxes on the Services or the Sabine Pass Facility.  SABINE shall use commercially reasonable efforts to minimize or eliminate the imposition or, if imposed, the impact of such SABINE Taxes or New Regulatory Costs for which Customer would be responsible hereunder.  SABINE shall exercise reasonable endeavors to consult with Customer toward the mitigation of any such SABINE Taxes and/or New Regulatory Costs.

4.3                               Services Unavailability

(a)                                  If some or all of the Services are unavailable to Customer on more than three (3) consecutive or ten (10) cumulative days during a Contract Year as a result of an event that constitutes Force Majeure, as a result of SABINE’s breach of this Agreement or as a result of scheduled maintenance (which such scheduled maintenance shall not exceed ten (10) days per Contract Year), unscheduled maintenance or curtailment or discontinuation or Services per Article 16 (a “Services Unavailability”), SABINE shall, to the extent operationally feasible and not disproportionately detrimental to Other Customers, use its reasonable efforts to restore Customer’s Services in accordance with Section 4.3(b) and allow Customer the ability to make-up any Services that have been lost as a result of the interruption of Services to the Sabine Pass Facility.

(b)                                 If as a result of Services Unavailability, the quantity of Customer’s Gas that is delivered by SABINE hereunder at the Delivery Point (or the quantity of Customer’s LNG that is received at the Receipt Point, as the case may be) is less than the quantity that Customer scheduled or would have scheduled but for such unavailability of Services, then the portion of the Services not made available shall constitute a “Make-Up Quantity”.  At any time there is an outstanding balance of Make-Up Quantity, Customer shall have the right, within twenty four (24) months of such Services Unavailability, to schedule any of the Services necessary to make up the Make-Up Quantity to the extent of uncommitted available capacity of the Sabine Pass Facility.  Such Make-Up Quantity may be scheduled from time to time, except during an event that constitutes Force Majeure.  Capacity shall be deemed to be available and uncommitted for purposes of this Section 4.3(b) if such capacity is available after SABINE has fulfilled any contractual obligations to Other Customers under firm agreements in existence at the time of the circumstances giving rise to the Make-Up Quantity.  All Services related to the Make-Up Quantity shall be provided without additional

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compensation to SABINE, including the unloading of LNG, the storage of Customer’s LNG, and the redelivery of Customer’s Gas.

(c)                                  For the avoidance of doubt, in no event shall the Fee be adjusted as a result of any Services Unavailability.

4.4                               Services Provided to Other Customers

Customer acknowledges that: (i) the compensation paid by Customer from time to time for Services may be less than, or more than, the price paid by Other Customers for the same or similar LNG terminalling services; and (ii) SABINE makes no representations or warranties to Customer in this regard.

ARTICLE 5
SCHEDULING

5.1                               Annual Delivery Program

Procedures for the receipt of LNG at the Receipt Point and redelivery of Gas at the Delivery Point will be detailed in the Sabine Pass Services Manual, as modified from time to time, in accordance with Section 3.5 but substantially in accordance with the following:

(a)                                  SABINE Deliverables.  Not later than one hundred and twenty (120) days prior to the beginning of each Contract Year, SABINE shall provide to the Scheduling Representative a non-binding written assessment of the dates of any planned maintenance to or modifications of the Sabine Pass Facility for such Contract Year and the expected impact of such activities on the availability of Services.  In no event shall the number of days for any planned maintenance to or modifications of the Sabine Pass Facility exceed three (3) consecutive or ten (10) cumulative days in any Contract Year.

(b)                                 Notice from Scheduling Representative.  Not later than one hundred and five (105) days prior to the beginning of each Contract Year, the Scheduling Representative shall provide SABINE with the following:

(i)                         a programming schedule for the unloading of up to the Maximum LNG Reception Quantity over the course of the next Contract Year, which schedule shall specify, for each Cargo to be delivered to the Receipt Point, the proposed arrival date (the “Proposed Arrival Date”) of the applicable LNG Vessel and which schedule must result in a delivery pattern whereby: (a) deliveries in any given month do not materially exceed one twelfth (1/12) of the Maximum LNG Reception Quantity; (b) deliveries in any given month are generally ratable over the month; (c) deliveries take into consideration the planned maintenance and modification dates furnished to Customer by SABINE as set forth in Section 5.1(a); and (d) deliveries shall not be scheduled so as to utilize both unloading berths simultaneously; and

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(ii)                      for each Proposed Arrival Date proposed pursuant to Section 5.1(b)(i), the name of the LNG Vessel expected to deliver LNG to the Sabine Pass Facility (if the identity of the LNG Vessel is known to Customer at such time), the Expected Receipt Quantity, and the anticipated Gross Heating Value of the LNG to be delivered.

(c)                                  Notices from Other Customers.  Customer acknowledges that Other Customers will submit similar notices to SABINE regarding the matters provided for in Section 5.1(b).

(d)                                 Customer Preliminary Receipt Schedule.  SABINE shall incorporate to the maximum extent practicable the notices that it receives from the Scheduling Representative and the Other Customers and, not later than ninety (90) days prior to the beginning of each Contract Year, SABINE shall issue to Customer via the Sabine Pass Website (or via an alternative electronic means of transmitting written communications if the Sabine Pass Website is unavailable) a preliminary receipt schedule for Customer for such Contract Year (the “Customer Preliminary Receipt Schedule”) showing a “Scheduled Arrival Date” for the LNG Vessel carrying each of Customer’s scheduled Cargos, which schedule must result in a delivery pattern whereby: (i) deliveries in any given month do not materially exceed one twelfth (1/12) of the Maximum LNG Reception Quantity; (ii) deliveries in any given month are generally ratable over the month; (iii) deliveries take into consideration the planned maintenance and modification dates furnished to Customer by SABINE; and (iv) deliveries are not scheduled so as to utilize both unloading berths simultaneously.  Customer may propose to SABINE to change any such Scheduled Arrival Date, and SABINE agrees to give due consideration to, and use reasonable efforts to accommodate, such change.

(e)                                  Other Customers’ Preliminary Receipt Schedules and Mutual Cooperation.  Customer acknowledges that SABINE will issue to each Other Customer via the Sabine Pass Website (or alternative electronic means) a preliminary receipt schedule similar to the Customer Preliminary Receipt Schedule described in Section 5.1(d), but customized for each such Other Customer (“Other Customers’ Preliminary Receipt Schedules”).  Customer also acknowledges that conflicts will occur in the preparation of the Customer Preliminary Receipt Schedule and Other Customers’ Preliminary Receipt Schedules because of the joint use of the Sabine Pass Facility among Customer and Other Customers.  Accordingly, Customer agrees to cooperate with SABINE to assist SABINE in resolving any such conflict to the extent such cooperation does not result in material additional costs to Customer or unduly adversely impact the Services provided to Customer hereunder.

(f)                                    Consultation; Annual Delivery Program.  If the Scheduling Representative desires to consult with SABINE regarding the contents of the Customer Preliminary Receipt Schedule, the Scheduling Representative shall, no later than fifteen (15) days from the issuance of the Customer Preliminary Receipt Schedule, request to meet with SABINE by providing notice thereof (the “Consultation Notice”) to

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SABINE, and SABINE shall, no later than fifteen (15) days after receipt of the Consultation Notice, meet with the Scheduling Representative to discuss the Customer Preliminary Receipt Schedule.  If: (i) the Scheduling Representative does not submit a Consultation Notice to SABINE on a timely basis; or (ii) the Scheduling Representative and SABINE meet pursuant to a Consultation Notice and are able during such meeting to agree upon revisions to the Customer Preliminary Receipt Schedule, then such Customer Preliminary Receipt Schedule, as so revised (and as updated from time to time for such Contract Year in accordance with the provisions of this Agreement by SABINE via the Sabine Pass Website), together with the planned maintenance and modification dates selected by SABINE, shall constitute the “Annual Delivery Program”.  If the Scheduling Representative and SABINE meet pursuant to a Consultation Notice and are unable during such meeting to agree upon revisions to the Customer Preliminary Receipt Schedule, then SABINE shall determine, while using its reasonable efforts to accommodate Customer’s views, the Annual Delivery Program.  Such Annual Delivery Program shall, to the extent practicable, result in a delivery pattern in which: (i) deliveries in any given month do not materially exceed one twelfth (1/12) of the Maximum LNG Reception Quantity; (ii) deliveries in any given month are generally ratable over the month; (iii) deliveries take into consideration planned maintenance and modification dates furnished to Customer by SABINE; and (iv) deliveries are not scheduled so as to utilize both unloading berths simultaneously.  SABINE shall issue via the Sabine Pass Website (or via an alternative electronic means of transmitting written communications if the Sabine Pass Website is unavailable) the Annual Delivery Program no later than sixty (60) days prior to the first day of the Contract Year.

(g)                                 Other Customers’ Annual Delivery Program. Customer acknowledges that SABINE shall issue to each Other Customer a final receipt schedule similar to the Annual Delivery Program described in Section 5.1(f) customized for each such Other Customer (such schedules referred to as “Other Customers’ Annual Delivery Program”).

(h)                                 Adjustment to Schedules.  Upon written request by Customer, SABINE shall use reasonable efforts to modify the time periods expressly set forth in Sections 5.1(b) and 5.1(d) to allow Customer to interface these periods with corresponding time periods for scheduling agreed upon by Customer and its LNG Suppliers.  For purposes of this Section 5.1, SABINE shall be deemed to have used reasonable efforts if SABINE rejects Customer’s request because it determines, acting as a Reasonable and Prudent Operator that any such modification would infringe on the contractual rights of Other Customers.

(i)                                     Available Unloading Dates.  Throughout the Contract Year, SABINE shall maintain on the Sabine Pass Website (or via an alternative electronic means of transmitting written communications if the Sabine Pass Website is unavailable) a current list of Available Unloading Dates.

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5.2                               Three Month Schedules

(a)                                  Proposed Schedules.   Not later than the first (1st) day of each month in a Contract Year, Customer shall deliver the following to SABINE: a proposed three-month forward plan of delivery of LNG (“Proposed Three Month Unloading Schedule”), which follows the Annual Delivery Program as nearly as practicable and sets forth by voyages and the projected dates thereof the pattern of shipments forecast for each of the next three (3) months and the Expected Receipt Quantity of each such shipment.

(b)                                 Three Month Unloading Schedules. Thereafter, and not later than the twentieth (20th) day of each month in which a Proposed Three Month Unloading Schedule is delivered, SABINE shall deliver the following to Customer: a final three-month forward plan of delivery of LNG (“Three Month Unloading Schedule”), which shall supersede Customer’s Proposed Three Month Unloading Schedule and prior Three Month Unloading Schedules as well as the portion of the Annual Delivery Program covering the same time periods and which shall reflect to the extent operationally practicable Customer’s Proposed Three Month Unloading Schedule.

(c)                                  Customer Changes to the Three Month Unloading  Schedule.  The Parties agree as follows:

At any time following the issuance of the Annual Delivery Program and any applicable Three Month Unloading Schedule, Customer’s Scheduling Representative may submit to SABINE a written request to change a Scheduled Arrival Date to any Available Unloading Date (such request to change, a “Customer Arrival Date Change Request”).  Customer understands that: (a) Other Customers shall also have the right to submit to SABINE similar scheduling requests (each an “Other Customer Arrival Date Change Request”); (b) SABINE shall have no obligation to consult with the Scheduling Representative, Customer, or Other Customers regarding any Customer Arrival Date Change Request or Other Customer Arrival Date Change Request (collectively, “Arrival Date Change Requests”); and (c) SABINE shall accept any Arrival Date Change Request on a first-come, first-served basis as soon as practical but not later than 5:00 p.m. Central Time of the day following the date of receipt by SABINE of the applicable Arrival Date Change Request.  Upon accepting a Customer Arrival Date Change Request, SABINE shall notify Customer via the Sabine Pass Website (or via an alternative electronic means of transmitting written communications if the Sabine Pass Website is unavailable).  Notwithstanding anything herein to the contrary, Customer shall use its reasonable efforts to keep to a minimum the number of Customer Arrival Date Change Requests it submits to SABINE.

(d)                                 Other Modifications to the Final Schedules.  If  Customer is  unable to berth during its Scheduled Arrival Date  due to a Force Majeure event (an “Unloading Services Unavailability”), each affected Scheduled Arrival Date allocated to Customer during such period shall be cancelled, to the extent affected; provided,

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however, that in the event of an Unloading Services Unavailability causing the cancellation of one or more Scheduled Arrival Dates allocated to Customer and/or Other Customers, SABINE shall make reasonable efforts to change the Three Month Unloading Schedule and Other Customers LNG Annual Delivery Program in order to maximize the safe, reliable and efficient usage of the Sabine Pass Facility and to assist Customer and Other Customers to unload quantities of LNG which would otherwise have been unloaded at the Sabine Pass Facility during such cancelled Scheduled Arrival Dates.

5.3                               Gas Delivery

(a)                                  Preliminary Nomination Schedule.  Not later than the fifteenth (15th) day of each month, commencing the month immediately prior to the Commercial Start Date, Scheduling Representative shall provide to SABINE a nonbinding nomination schedule (“Preliminary Nomination Schedule”) that sets forth, for each day of the succeeding month, the quantities of Gas Customer expects to nominate for redelivery for its account at the Delivery Point.

(b)                                 Daily Nomination Schedule.  Each day by no later than 9:00 a.m. Central Time Customer shall have the right to notify SABINE of its actual nomination of the quantities of Gas to be redelivered for its account at the Delivery Point on the following day up to the lesser of the Gas Redelivery Rate or the remaining quantity of Customer’s Inventory and SABINE shall be obligated to redeliver such quantities to Customer in accordance with its nomination.  Any nomination submitted by Customer’s Scheduling Representative in accordance with the foregoing provision shall remain in effect until changed by it in accordance with such provision.  SABINE shall cooperate with Customer in respect to the scheduling of Gas on an intraday basis unless such nominations would adversely affect the operations of the Sabine Pass Facility or the rights of any Other Customer to send out Gas pursuant to previous nominations.

(c)                                  Spare Vaporization.  SABINE shall make available to Customer and Other Customers spare vaporization (equivalent to approximately 180,000 MMBTUs per day) on a pro rata basis based on the Maximum LNG Reception Quantity per day prorated of Customer and the maximum LNG reception quantity per day prorated of each Other Customer.  Terminal use agreements (in excess of three (3) months) for sales of Services by SABINE shall in no event burden one (1) LNG vaporizer (excluding one (1) spare vaporizer held in reserve) under such contracts.  By way of example (but without in any way limiting SABINE’s right to expand or modify the Sabine Pass Facility), if the Sabine Pass Facilities’ total LNG regasification facilities have a daily capacity (excluding the one (1) spare vaporizer held in reserve) of 2,700,000 MMBTUs, then the total long term sales of Gas vaporization Services to Customer and Other Customers shall not exceed 2,520,000 MMBTUs.  There shall not be an additional charge to Customer for the use of the uncontracted vaporizer, however, such use shall not increase the Maximum LNG Reception Quantity that Customer is entitled to in any given period.

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(d)                                 Excess or Unutilized Vaporization Capacity. 

(i)                                     To the extent SABINE has uncontracted or unutilized vaporization capacity up to its operational capacity of 2,520,000 MMBTUs per day (“Excess Vaporization Capacity”), SABINE may, at its sole option, post on the Sabine Pass Website the quantity and degree of certainty of such Excess Vaporization Capacity.  Customer may elect to make use of such Excess Vaporization Capacity and shall have the right to purchase all or any portion of such Excess Vaporization Capacity on a daily basis provided, that, to the extent the demand for such Excess Vaporization Capacity exceeds the quantity available, Customer and Other Customers shall be entitled to a pro rata share of Excess Vaporization Capacity based on the maximum Gas Redelivery Rate of Customer and the maximum gas redelivery rate of each Other Customer electing to utilize any such Excess Vaporization Capacity.  The fee for such Excess Vaporization Capacity shall be a market price to be negotiated between SABINE and Customer in good faith but in no event shall such fee exceed the Fees calculated in accordance with Clause C on a per MMBTU of vaporization capacity or exceed the price that is currently being paid by any Other Customer for such Excess Vaporization Capacity.

(ii)                                  Notwithstanding anything to the contrary in this Section 5.3(d), nothing herein shall prevent, preclude, or hinder SABINE in good faith from contracting with Other Customers on a spot or long-term basis for services available at the Sabine Pass Facility even though the contracting of such capacity may reduce or eliminate the availability of Excess Vaporization Capacity to Customer; provided, however, that if Excess Vaporization Capacity has been scheduled and confirmed by SABINE to Customer, then such capacity shall be made available to Customer on a firm basis subordinate only to capacity previously contracted to Other Customers.

(iii)                               For the avoidance of doubt, the contracting of Excess Vaporization Capacity is intended to be on a short-term basis and is not intended and may not be used as a means for Customer to obtain additional long-term capacity at the Sabine Pass Facility.

5.4                               Standard

SABINE shall act as a Reasonable and Prudent Operator in performing the scheduling activities required by this Article 5.

5.5                               Scheduling Representative

By no later than six (6) months prior to the Commercial Start Date, Customer shall appoint an individual to act as Scheduling Representative for the purposes of this Article 5; provided, however, that Customer shall have the right to change its appointed Scheduling Representative at any time by notice to SABINE.  Unless otherwise stated herein, Customer hereby authorizes the Scheduling Representative to do and perform any

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and all acts for and on behalf of Customer with regard to scheduling matters provided for in this Article 5.  SABINE acknowledges that Customer and any Other Customer may agree to coordinate their activities so as to make the most efficient use of the Sabine Pass Facility, and may for purposes of this Agreement and the terminal use agreements of the Other Customers jointly appoint a Scheduling Representative.

5.6                               Scheduling Coordination Among Customer and Other Customers

Customer shall have the right to request SABINE to arrange a joint meeting with Other Customers with respect to any matter in relation to the performance of this Article 5.  SABINE shall use reasonable efforts to organize such a meeting, provided that SABINE may elect to include additional Other Customers if SABINE determines that such matter affects such additional Other Customers.  If the Other Customers invited by SABINE agree to participate in such a joint meeting among Customer, Other Customers and SABINE, the joint meeting shall be held as soon as practical.  SABINE shall have the right to settle any scheduling disputes that may arise among Customer and Other Customers on a basis that does not unfairly discriminate against Customer.  Unless otherwise agreed, any such joint meeting shall be held in Houston, Texas or by telephone, as appropriate.

ARTICLE 6
COMMERCIAL START DATE

6.1                               Commencement of Deliveries

In accordance with the procedure set forth in this Section 6.1, Customer shall notify SABINE of the date on which Services for Customer will commence at the Sabine Pass Facility (the final date so notified being the “Commercial Start Date”).  The Commercial Start Date shall be a date within the period that (a) commences on February 1, 2009 and (b) ends on July 1, 2009 (such period being the “First Window Period”).  The First Window Period shall be narrowed pursuant to the following provisions:

(i)                                     No later than ninety (90) days in advance of the first day of the First Window Period, Customer shall notify SABINE of a sixty (60) day window (“Second Window Period”) falling within the First Window Period for the Commercial Start Date; provided that if Customer fails to give timely notice of same, the Second Window Period shall be the latest possible sixty (60) day window period within the First Window Period;

(ii)                                  No later than thirty (30) days in advance of the first day of the Second Window Period, Customer shall notify SABINE of a thirty (30) day window (“Third Window Period”) falling within the Second Window Period for the Commercial Start Date; provided that if Customer fails to give timely notice of same, the Third Window Period shall be latest possible thirty (30) day window period within the Second Window Period;

(iii)                               No later than seven (7) days in advance of the first day of the Third Window Period, Customer shall notify SABINE of a fifteen (15) day

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window (“Final Window Period”) falling within the Third Window Period for the Commercial Start Date; provided that if Customer fails to give timely notice of same, the Final Window Period shall be the latest possible fifteen (15) day period within the Third Window Period; and

(iv)                              No later than three (3) days in advance of the first day of the Final Window Period, Customer shall notify SABINE of the Commercial Start Date falling within the Final Window Period; provided that if Customer fails to give timely notice of same, the Commercial Start Date shall be the latest possible day in the Final Window Period.

The Commercial Start Date shall be the date so notified, regardless of whether any unloading of Customer’s LNG at the Sabine Pass Facility actually occurs on such date unless Customer is unable to unload Cargoes as a result of the Sabine Pass Facility not having become commercially operable by that date in which case, the Commercial Start Date shall be the first date on which the Sabine Pass Facility is commercially operable.

6.2                               Delay Caused by Force Majeure

The Commercial Start Date shall be postponed to the extent that an event of Force Majeure has the effect of delaying that date to a later date; provided, however that in no event shall delays in achieving financing or initiating construction constitute an event of Force Majeure.

ARTICLE 7
SABINE PASS FACILITY

7.1                               Sabine Pass Facility

(a)                                  Standard of Operation.  By the Commercial Start Date, SABINE shall cause the Sabine Pass Facility to be constructed and commissioned so as to be able to provide the Services to Customer on the basis set forth in this Agreement and otherwise to achieve commercial operations completion.  On and after the Commercial Start Date, SABINE shall at all times provide, maintain and operate (or cause to be provided, maintained and operated) the Sabine Pass Facility in accordance with the following: (i) International LNG Terminal Standards; and (ii) to the extent not inconsistent with International LNG Terminal Standards, such good and prudent practices as are generally followed in the LNG industry by Reasonable and Prudent Operators of LNG receiving and regasification terminals.

(b)                                 Facilities to be Provided.  Subject to Section 7.1(a), the Sabine Pass Facility shall include the following:

(i)                         appropriate systems for communications with LNG Vessels;

(ii)                      two unloading berths, each capable of berthing an LNG Vessel having a displacement of no more than 166,600 tons, an overall length of no more than 1,140 feet, a beam of no more than 175 feet, and a draft of no more than 40 feet, which LNG Vessels can safely reach, fully laden, and safely

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depart, and at which LNG Vessels can lie safely berthed and unload safely afloat;

(iii)                   lighting sufficient to permit unloading operations by day or by night, to the extent permitted by Governmental Authorities and Pilots (it being acknowledged, however, that SABINE shall in no event be obligated to allow nighttime berthing operations at the Sabine Pass Facility if SABINE determines, acting as a Reasonable and Prudent Operator, that such operations during nighttime hours could pose safety or operational risks to the Sabine Pass Facility, an LNG Vessel, or a third party);

(iv)                  unloading facilities capable of receiving LNG at a rate of up to an average of 12,000 Cubic Meters per hour when the pressure at the Receipt Point is at least 5.6 bars (gauge), with three (3) unloading arms each having a reasonable operating envelope to allow for ship movement and manifold strainers of sixty (60) mesh;

(v)                     a vapor return line system of sufficient capacity to transfer to an LNG Vessel quantities of Gas necessary for the safe unloading of LNG at the required rates, pressures and temperatures;

(vi)                  facilities allowing ingress and egress between the Sabine Pass Facility and the LNG Vessel by (x) representatives of Governmental Authorities for purposes of unloading operations; and (y) an independent surveyor for purposes of conducting tests and measurements of LNG on board the LNG Vessel in accordance with Annex I;

(vii)               LNG storage facilities with a total gross capacity of approximately four hundred eighty thousand (480,000) Cubic Meters of LNG;

(viii)            LNG regasification facilities with a total daily capacity of up to two point six (2.6) billion Standard Cubic Feet; and

(ix)                    piping and flange at the Delivery Point necessary for the purpose of connecting to the Downstream Pipeline.

(c)                                  Facilities Not Provided.  Services and facilities not provided at the Sabine Pass Facility include the following: (i) facilities and loading lines for liquid or gaseous nitrogen to service an LNG Vessel; (ii) facilities for providing bunkers; and (iii) facilities for the handling and delivery to the LNG Vessel of ship’s stores, provisions and spare parts.

7.2                               Compatibility of Sabine Pass Facility with LNG Vessels

(a)                                  Sabine Pass Facility General Specifications.  SABINE has provided to Customer the general specifications for the LNG berthing and unloading facilities of the Sabine Pass Facility as of the date hereof.

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(b)                                 LNG Vessel Compatibility.  Customer shall ensure, at no cost to SABINE, that each of the LNG Vessels is fully compatible with the Sabine Pass Facility as set forth in such general specifications.  Should an LNG Vessel fail materially either to be compatible with the Sabine Pass Facility, or to be in compliance with the provisions of Article 8, Customer shall not employ such LNG Vessel until it has been modified to be so compatible or to so comply.

(c)                                  Modifications.  The Parties agree that, after the date hereof, SABINE shall be entitled to modify the Sabine Pass Facility in any manner whatsoever, provided that: (x) such modifications do not render the Sabine Pass Facility incompatible with an LNG Vessel that is compatible with the Sabine Pass Facility under Section 7.2(b) above; (y) such modifications, once finalized, do not reduce the ability of SABINE to provide the Services to Customer on the basis set forth in this Agreement; and (z) such modifications do not otherwise conflict with SABINE’s obligations under this Agreement.  Notwithstanding the foregoing, SABINE may modify the Sabine Pass Facility in a manner that would render it incompatible with an LNG Vessel provided that:

(i)                         such modification is made pursuant to a change in International LNG Terminal Standards; or

(ii)                      the LNG Vessel is capable of being modified, and such modification is minor in nature, to maintain compatibility with both the Sabine Pass Facility and other terminals in its normal/intended trade and SABINE reimburses Customer for the reasonable actual costs incurred by Customer in causing Transporter to modify the LNG Vessel to maintain compatibility with the Sabine Pass Facility as so modified; provided, further, that Customer shall use its best efforts to minimize costs to be borne by SABINE hereunder, shall notify SABINE reasonably in advance of the nature and expected cost of all such LNG Vessel modifications by Transporter, and shall certify to SABINE the actual amount and detail of all costs incurred for which such reimbursement from SABINE is requested.

7.3                               Customer Inspection Rights

Upon obtaining SABINE’s prior written consent, which consent shall not be unreasonably withheld or delayed, a reasonable number of Customer’s designated representatives (including LNG Suppliers) may from time to time (including during the period of initial construction) inspect the operation of the Sabine Pass Facility so long as such inspection occurs from 8:00 a.m. Central Time to 5:00 p.m. Central Time on a Business Day.  Any such inspection shall be at Customer’s sole risk and expense.  Customer (and its designees) shall carry out any such inspection without any interference with or hindrance to the safe and efficient operation of the Sabine Pass Facility.  Customer’s right to inspect and examine the Sabine Pass Facility shall be limited to verifying SABINE’s compliance with SABINE’s obligations under this Agreement and shall not entitle Customer to make direct requests to SABINE regarding any aspect of the Sabine Pass Facility.  No inspection (or lack thereof) of the Sabine Pass Facility by

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Customer hereunder, or any requests or observations made to SABINE or its representatives by or on behalf of Customer in connection with any such inspection, shall (a) modify or amend SABINE’s obligations, representations, warranties and covenants under this Agreement or under any agreement or instrument contemplated by this Agreement; or (b) constitute an acceptance or waiver by Customer of SABINE’s obligations under this Agreement.

ARTICLE 8
TRANSPORTATION AND UNLOADING

8.1                               LNG Vessels

(a)                                  Customer to Cause LNG Vessels to Comply.  Customer shall be responsible for the transportation of LNG from the Loading Port to the Receipt Point.  In this regard, Customer shall cause each LNG Vessel to comply with the requirements of this Article 8 in all respects.

(b)                                 Approvals and Documentation.  Each LNG Vessel shall comply with the regulations of, and obtain all Approvals required by, Governmental Authorities to enable such LNG Vessel to enter, leave and carry out all required operations at the Sabine Pass Facility.  Each LNG Vessel shall at all times have on board valid documentation evidencing all such Approvals.  Each LNG Vessel shall comply fully with the International Safety Management Code for the Safe Operation of Ships and Pollution Prevention effective July 1, 1998, and at all times be in possession of a valid safety management certificate.

(c)                                  Tugs, Fireboats, Escort Vessels and Port Charges.  Customer shall arrange for, or cause the appropriate Person to arrange for, such number and types of tugs, fireboats and escort vessels as are required by Governmental Authorities to attend the LNG Vessel so as to permit safe and efficient movement of the LNG Vessel within the maritime safety areas located in the approaches to and from the Sabine Pass Facility.  Customer shall pay all Port Charges directly to the appropriate Person.

(d)                                 LNG Vessel Requirements.  Each LNG Vessel must satisfy the following requirements:

(i)                         Specifications.  Except as otherwise mutually agreed in writing by the Parties, each LNG Vessel shall be compatible with the specifications of the Sabine Pass Facility identified in Section 7.1(b).  Notwithstanding the foregoing, in the event an LNG Vessel is compatible with the specifications set forth in Section 7.1(b) or otherwise acceptable to SABINE, but a Governmental Authority or Pilot prohibits or otherwise hinders the utilization of such LNG Vessel, Customer’s obligations under this Agreement shall not be excused or suspended by reason of Customer’s inability (pursuant to the foregoing) to use such a vessel as an LNG Vessel.

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(ii)                      LNG Vessel Capacity.  Except as otherwise agreed in writing by SABINE, each LNG Vessel shall have an LNG cargo containment capacity of no less than one hundred twenty thousand (120,000) Cubic Meters, determined at the time of loading of LNG.

(iii)                   Condition of the LNG Vessel.  Each LNG Vessel shall be, in accordance with International LNG Vessel Standards, (x) fitted in every way for the safe loading, unloading, handling and carrying of LNG in bulk at atmospheric pressure; and (y) tight, staunch, strong and otherwise seaworthy with cargo handling and storage systems (including instrumentation) necessary for the safe loading, unloading, handling, carrying and measuring of LNG in good order and condition.  The location of the unloading manifold shall allow a safe margin for movement of the arms within the operating envelope.

(iv)                  Classification Society.  Each LNG Vessel shall at all times be maintained in class with any of the following: American Bureau of Shipping, Lloyd’s Register for Shipping, Bureau Veritas, Det Norske Veritas or any other classification society that is mutually agreeable to the Parties.

(v)                     Construction.  Each LNG Vessel shall have been constructed to all applicable International LNG Vessel Standards (including the International Code for the Construction and Equipment of Ships Carrying Liquefied Gases in Bulk).

(vi)                  Operation and Maintenance.  Each LNG Vessel shall comply with, and shall be fully equipped, supplied and maintained to comply with, all applicable International LNG Vessel Standards.  Unless approved by SABINE in writing, which approval shall not be unreasonably withheld or delayed, an LNG Vessel shall be prohibited from engaging in any maintenance, repair or in-water surveys while berthed at the Sabine Pass Facility.  Each LNG Vessel shall comply fully with the guidelines of any Governmental Authority of the United States, including the National Oceanographic and Atmospheric Administration (NOAA), in relation to actions to avoid strikes in U.S. waters with protected sea turtles and cetaceans (e.g., whales and other marine mammals) and with regard to the reporting of any strike by the LNG Vessel which causes injury to such protected species.

(vii)               Crew.  The officers and crew of each LNG Vessel shall have the ability, experience, licenses and training commensurate with the performance of their duties in accordance with internationally accepted standards as adopted on first-class LNG vessels and as required by Governmental Authorities and any labor organization having jurisdiction over the LNG Vessel or her crew. Without in any way limiting the foregoing, the master, chief engineer, all cargo engineers and all deck officers shall be fluent in written and oral English and shall maintain all records and provide all reports with respect to the LNG Vessel in English.

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(viii)            Communications.  Each LNG Vessel shall have communication equipment complying with applicable regulations of Governmental Authorities and permitting such LNG Vessel to be in constant communication with the Sabine Pass Facility and with other vessels in the area (including fireboats, escort vessels and other vessels employed in port operations).

(ix)                    Pumping Time.  Provided that the Sabine Pass Facility supplies a suitable vapor return line meeting the requirements of Section 7.1(b)(v), then:

a.                                       an LNG Vessel with an LNG cargo containment capacity less than or equal to one hundred forty thousand (140,000) Cubic Meters shall be capable of unloading LNG in a maximum of fifteen (15) hours; and

b.                                      an LNG Vessel with an LNG cargo containment capacity greater than one hundred forty thousand (140,000) Cubic Meters shall be capable of unloading LNG in the number of hours derived after applying the following formula:

15 + x  =  maximum LNG unloading time (in hours)

where:

x   =                           y/12,000 Cubic Meters; and

y   =                         the LNG cargo containment capacity of the LNG Vessel in excess of 140,000 Cubic Meters.

Time for connecting, cooling, stripping and disconnecting, and cooling of liquid arms shall not be included in the computation of pumping time.

8.2                               Sabine Pass Marine Operations Manual

Acting as a Reasonable and Prudent Operator, SABINE shall develop and maintain and revise from time to time a single marine operations manual (the “Sabine Pass Marine Operations Manual”) that governs activities at the Sabine Pass Facility, applies to all LNG Vessels and vessels used by Other Customers and which shall be consistent with International LNG Vessel Standards (but excluding the matters governed by the Sabine Pass Services Manual).  In developing such a manual, SABINE shall provide Customer with a preliminary draft of the same (“Preliminary Marine Operations Manual”).  If Customer desires to provide comments to SABINE regarding the contents of the Preliminary Marine Operations Manual Customer shall, no later than fifteen (15) days from receipt of such manual from SABINE, notify SABINE in writing of its desire to provide comments on the Preliminary Marine Operations Manual. In such event, within thirty (30) days of receipt of Customer’s notice, SABINE shall convene a meeting with Customer to discuss Customer’s comments. If (a) Customer does not submit the foregoing notice to SABINE on a timely basis or (b) Customer and SABINE meet and

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are able to agree upon revisions to the Preliminary Marine Operations Manual, then such manual, as so revised, shall constitute the Sabine Pass Marine Operations Manual.  If Customer and SABINE are unable to reach agreement upon revisions to the Preliminary Marine Operations Manual or any revisions thereto, SABINE shall determine the content of the Sabine Pass Marine Operations Manual, using commercially reasonable efforts to accommodate Customer’s comments.  In the event SABINE intends to amend the Sabine Pass Marine Operations Manual, SABINE shall follow the same procedure as set forth above in relation to the Preliminary Marine Operations Manual.  SABINE shall deliver to Customer and all Other Customers a copy of the Sabine Pass Marine Operations Manual and any amendments thereto promptly after they have been finalized or amended, as the case may be.  SABINE and Customer shall comply with such Sabine Pass Marine Operations Manual in all respects.  SABINE will undertake to develop a Sabine Pass Marine Operations Manual that is consistent with this Agreement; however, in the event of a conflict between the terms of this Agreement and the Sabine Pass Marine Operations Manual, the terms of this Agreement shall control.

8.3                               LNG Vessel Inspections; Right to Reject LNG Vessel

(a)                                  Inspections.  During the Term, on prior reasonable notice to Customer, SABINE acting as a Reasonable and Prudent Operator may, at its sole risk, send its representatives (including an independent internationally recognized maritime consultant) to inspect during normal working hours any LNG Vessel as SABINE may consider necessary to ascertain whether the LNG Vessel complies with the provisions of this Agreement.  SABINE shall bear the costs and expenses in connection with any inspection conducted hereunder.  Any such inspection may include, as far as is practicable having regard to the LNG Vessel’s operational schedule, examination of the LNG Vessel’s hull, cargo and ballast tanks, machinery, boilers, auxiliaries and equipment; examination of the LNG Vessel’s deck and engine scrap/rough and fair copy/official log books; review of records of surveys by the LNG Vessel’s classification society and relevant Governmental Authorities; and review of the LNG Vessel’s operating procedures and performance of surveys, both in port and at sea.  Any inspection carried out pursuant to this Section 8.3(a): (i) shall not interfere with, or hinder, any LNG Vessel’s safe and efficient construction or operation; and (ii) shall not entitle SABINE or any of its representatives to make any request or recommendation directly to Transporter except through Customer.  No inspection (or lack thereof) of an LNG Vessel hereunder shall: (i) modify or amend Customer’s obligations, representations, warranties and covenants under this Agreement or under any agreement or instrument contemplated by this Agreement; or (ii) constitute an acceptance or waiver by SABINE of Customer’s obligations under this Agreement.

(b)                                 Right to Reject LNG Vessel.  SABINE shall have the right to reject any LNG Vessel that Customer intends to use to deliver LNG to the Sabine Pass Facility if such LNG Vessel does not comply materially with the provisions of this Agreement, provided that:

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(i)                         neither the exercise nor the non-exercise of such right shall reduce the responsibility of Customer to SABINE in respect of such LNG Vessel and her operation, nor increase SABINE’s responsibilities to Customer or third parties for the same; and

(ii)                      Customer’s obligations under this Agreement shall not be excused or suspended by reason of Customer’s inability (pursuant to the foregoing) to use a vessel as an LNG Vessel.

8.4                               Advance Notices Regarding LNG Vessel and Cargoes

(a)                                  Change in Expected Receipt Quantity.  If, subsequent to issuing the notice required under Section 5.1(b)(ii) and Section 5.2(a), Customer anticipates a material change in the Expected Receipt Quantity for a particular Cargo, Customer shall promptly provide notice thereof to SABINE and include in such notice Customer’s new estimate of the Expected Receipt Quantity.  SABINE shall use reasonable endeavors to accept such changed quantity but shall at all times retain the right not to accept any increased quantity if, in its reasonable  discretion, such increased quantity would conflict with any Other Customer’s unloading schedule or entitlement to Services or exceed Customer’s Service entitlements at the Sabine Pass Facility.

(b)                                 LNG Vessel Nomination.  As soon as practicable but no later than five (5) days prior to the scheduled loading date for a Cargo, Customer shall notify SABINE of the information specified below:

(i)                         name of LNG Vessel and, in reasonable detail, the dimensions, specifications, operator,  and owner of such LNG Vessel;

(ii)                      name of Loading Port;

(iii)                   expected departure date of LNG Vessel from Loading Port;

(iv)                  estimated arrival date at the Sabine Pass Facility; and

(v)                     any changes in the Expected Receipt Quantity since Customer’s prior notice.

Moreover, if the vessel that Customer proposes to use as an LNG Vessel has not, within the immediately preceding Contract Year, delivered LNG to the Sabine Pass Facility, Customer shall notify SABINE thereof at least sixty (60) days prior to the applicable Scheduled Arrival Date.

(c)                                  LNG Vessel Movements.  With respect to each Cargo of LNG to be delivered hereunder, Customer shall give, or cause the master of the LNG Vessel to give, to SABINE the following notices:

(i)                         A first notice (“First Notice”), which shall be sent upon the departure of the LNG Vessel from the Loading Port and which shall set forth the time and

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date that loading was completed, the volume (expressed in Cubic Meters) of LNG loaded on board the LNG Vessel, the estimated time of arrival of the LNG Vessel at the Pilot Boarding Station (“ETA”), and any operational deficiencies in the LNG Vessel that may affect its performance at the Sabine Pass Facility or berth;

(ii)                      A second notice (“Second Notice”), which shall be sent ninety-six (96) hours prior to the ETA set forth in the First Notice, stating the LNG Vessel’s then ETA.  If, thereafter, such ETA changes by more than six (6) hours, Customer shall give promptly, or cause the master of the LNG Vessel to give promptly, to SABINE notice of the corrected ETA;

(iii)                   A third notice (“Third Notice”), which shall be sent twenty-four (24) hours prior to the ETA set forth in the Second Notice (as corrected), confirming or amending such ETA.  If, thereafter, such ETA changes by more than three (3) hours, Customer shall give promptly, or cause the master of the LNG Vessel to give promptly, to SABINE notice of the corrected ETA;

(iv)                  A fourth notice (“Final Notice”), which shall be sent twelve (12) hours prior to the ETA set forth in the Third Notice (as corrected), confirming or amending such ETA.  If, thereafter, such ETA changes by more than one (1) hour, Customer shall give promptly, or cause the master of the LNG Vessel to give promptly, to SABINE notice of the corrected ETA; and

(v)                     An NOR, which shall be given at the time prescribed in Section 8.5(a) below.

(d)                                 Characteristics of Cargoes.  With the First Notice, Customer shall notify SABINE, or cause SABINE to be notified, for SABINE’s information only, of the following characteristics of the LNG comprising its Cargo as determined at the time of loading:

(i)                         Gross Heating Value per unit;

(ii)                      molecular percentage of hydrocarbon components and nitrogen;

(iii)                   average temperature; and

(iv)                  density at loading.

(e)                                  Right to Reject Certain Quantities.  Without prejudice to any other rights and remedies arising hereunder or by law or otherwise, SABINE shall for any reason (including limitations in LNG Storage) have the right to reject, and shall not be required to unload, those quantities of LNG on board an LNG Vessel that exceed one hundred and five percent (105%) the Expected Receipt Quantity for such Cargo as specified in, whichever is applicable: (i) the notice delivered pursuant to Section 5.1(b)(ii) or Section 5.2(a) and utilized by SABINE for the purposes of determining Annual Delivery Program or any Three Month Unloading Schedule,

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respectively; or (ii) any subsequent notice delivered pursuant to Section 8.4(a) and accepted by SABINE.

8.5                               Notice of Readiness

(a)                                  Issuance.  Subject to any applicable restrictions, including any nighttime transit restrictions imposed by Governmental Authorities or Pilots or any other reasonable timing restrictions imposed by SABINE (in light of SABINE’s obligation to have the capability to provide Services twenty-four (24) hours a day, seven (7) days a week), the master of an LNG Vessel or its agent shall give to SABINE its notice of readiness (“NOR”), to unload (berth or no berth) upon arrival of such LNG Vessel at the specific location off the Sabine Pass Facility at which Pilots customarily board the LNG Vessel (such location referred to as the “Pilot Boarding Station”) and after the Pilot has boarded the LNG Vessel.

(b)                                 Effectiveness.  An NOR given under Section 8.5(a) shall become effective as follows:

(i)                         For an LNG Vessel arriving at the Pilot Boarding Station at any time before 6:00 a.m. Central Time on the Scheduled Arrival Date allocated to such LNG Vessel, an NOR shall be deemed effective at 6:00 a.m. Central Time on such Scheduled Arrival Date;

(ii)                      For an LNG Vessel arriving at the Pilot Boarding Station at any time between the period of 6:00 a.m. Central Time on the Scheduled Arrival Date allocated to such LNG Vessel and 6:00 a.m. Central Time on the day immediately following such Scheduled Arrival Date, an NOR shall become effective at the time of its issuance; or

(iii)                   For an LNG Vessel arriving at the Pilot Boarding Station at any time after the expiration of the Scheduled Arrival Date, an NOR shall become effective upon SABINE’s notice to the LNG Vessel that it is ready to receive the LNG Vessel at berth.

8.6                               Berthing Assignment

(a)                                  General Rule.  SABINE shall determine the berthing sequence of all LNG Vessels at the Sabine Pass Facility in order to ensure compliance with the Annual Delivery Program and Three Month Unloading Schedules.  If an LNG Vessel arrives not ready to unload for any reason, SABINE may refuse to allow it to berth.

(b)                                 Timely Arrival.  SABINE shall berth an LNG Vessel arriving before or during its Scheduled Arrival Date at the first opportunity that SABINE determines such LNG Vessel will not interfere with berthing and unloading of any other scheduled LNG vessel with a higher berthing priority.  Berthing priority for LNG vessels arriving before or during their respective Scheduled Arrival Dates shall be determined as follows:

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(i)                         The first berthing priority on any day shall be for LNG vessels with a Scheduled Arrival Date on such day.  Priority within this group shall be given to the LNG vessel which has first given SABINE its NOR;

(ii)                      The second berthing priority on any day shall be for LNG vessels arriving before their respective Scheduled Arrival Date.  Priority within this group shall be given to the LNG vessel which has first given SABINE its NOR.

(c)                                  Late Arrival.  SABINE shall berth an LNG Vessel arriving after its Scheduled Arrival Date at the first opportunity that SABINE reasonably determines such LNG Vessel will not interfere with berthing and unloading by any scheduled vessel arriving on its Scheduled Arrival Date.

8.7                               Unloading Time

(a)                                  Allotted Unloading Time.  The allotted unloading time for each LNG Vessel (“Allotted Unloading Time”) shall be thirty-six (36) hours, subject to extensions for:

(i)                                     reasons attributable to Customer, a Pilot, a Governmental Authority, the LNG Vessel or its master, crew, owner or operator;

(ii)                                  Force Majeure;

(iii)                               unscheduled curtailment or temporary discontinuation of operations at the Sabine Pass Facility in accordance with Section 16.2; provided that in the circumstances described in Section 16.2 (a), the repairs giving rise to such curtailment or discontinuance are reasonably necessary for the delivery of Services to Customer and Other Customers or for reasons of safety;

(iv)                              occupancy of the berth by an LNG vessel that arrived at berth at the Sabine Pass Facility no later than 6:00 p.m. Central Time of the scheduled unloading window allocated to such LNG vessel (such unloading window not to exceed the time allotted to Customer), which shall result in an extension of no more than nine (9) hours;

(v)                                 additional time to unload an LNG Vessel with an LNG cargo containment capacity greater than one hundred forty thousand (140,000) Cubic Meters, such increase over thirty-six (36) hours to be calculated in the same manner as increases over twenty-four (24) hours under Section 8.9(b)(i)b;

(vi)                              failure to send the Final Notice; and

(vii)                           nighttime transit restrictions.

For the avoidance of doubt, SABINE shall have the right to delay berthing of the LNG Vessel for any of the reasons set forth in (i) to (vii) above.

(b)                                 Actual Unloading Time.  The actual unloading time for each LNG Vessel (“Actual Unloading Time”) shall commence when the NOR is effective and shall end when the unloading and return lines of the LNG Vessel are disconnected from the Sabine Pass Facility’s unloading and return lines.

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(c)                                  Demurrage at the Sabine Pass Facility.

(i)                                     In the event Actual Unloading Time exceeds Allotted Unloading Time (including any extension in accordance with Section 8.7(a)) (“Demurrage Event”), SABINE shall pay to Customer as liquidated damages demurrage in United States dollars (which shall be prorated for a portion of a day) determined in accordance with the rate set out in the following table:

(ii)                                  If a Demurrage Event occurs, Customer shall invoice SABINE for such demurrage within thirty (30) days and pursuant to Section 11.2.

(d)                                 Excess Boil-Off.  If an LNG Vessel is delayed in berthing at the Sabine Pass Facility and/or commencement of unloading due to an event occurring at the Sabine Pass Facility and for a reason that would not result in an extension of Allotted Unloading Time under Section 8.7(a), and if, as a result thereof, the commencement of unloading is delayed beyond twenty-four (24) hours after the Notice of Readiness is effective, then, for each full hour by which commencement of unloading is delayed beyond such twenty-four (24) hour period, SABINE shall pay Customer as liquidated damages an amount, on account of excess boil-off, equal to the ▇▇▇▇▇ Hub Price multiplied by the quantity in MMBTUs equal to 0.0052% of the Cargo.  Customer shall invoice SABINE for such excess boil-off pursuant to Section 11.2.

8.8                               Unloading at the Sabine Pass Facility

(a)                                  Efficiency.  SABINE shall, acting as a Reasonable and Prudent Operator, cooperate with Transporters (or their agents) and with the master of each LNG Vessel to facilitate the continuous and efficient delivery of LNG hereunder.

(b)                                 Vapor Return Line.  During unloading of each Cargo of LNG, SABINE shall return to the LNG Vessel Gas in such quantities as are necessary for the safe unloading of the LNG at such rates, pressures and temperatures as may be required by the design of the LNG Vessel, and such returned Gas shall not be deemed to be volume unloaded for Customer’s account.

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8.9                               LNG Vessel Not Ready for Unloading; Excess Berth Time

(a)                                  Vessel Not Ready for Unloading.  If any LNG Vessel, previously believed to be ready for unloading, is determined to be not ready after being berthed, SABINE may direct the LNG Vessel’s master to vacate the berth and proceed to anchorage, whether or not other LNG vessels are awaiting the berth, unless it appears reasonably certain to SABINE that such LNG Vessel can be made ready without disrupting the overall unloading schedule of the Sabine Pass Facility or operations of the Sabine Pass Facility.  When an unready LNG Vessel at anchorage becomes ready for unloading, its master shall notify SABINE.  Upon the reberthing of any LNG Vessel vacated pursuant to this Section 8.9(a), Customer shall be responsible for any actual costs incurred by SABINE acting as a Reasonable and Prudent Operator as a result of such LNG Vessel not being ready for unloading.

(b)                                 Berth Limitations.

(i)                         An LNG Vessel shall complete unloading and vacate the berth as soon as possible but not later than the following allowed berth time:

a.                                       twenty-four (24) hours, in the case of an LNG Vessel with an LNG cargo containment capacity less than or equal to one hundred forty thousand (140,000) Cubic Meters; or

b.                                      in accordance with the following formula, in the case of an LNG Vessel with an LNG cargo containment capacity greater than one hundred forty thousand (140,000) Cubic Meters:

24 + x   =   allowed berth time (in hours)

where:

x   =                           y/12,000 Cubic Meters; and

y   =                         the LNG cargo containment capacity of the LNG Vessel in excess of 140,000 Cubic Meters.

(ii)                      Notwithstanding the foregoing, the aforementioned time restrictions shall be extended for: (a) reasons attributable to SABINE; (b) reasons attributable to a Pilot or to a Governmental Authority; (c) Force Majeure; and (d) nighttime transit restrictions.

(iii)                   If an LNG Vessel fails to depart at the end of its allowed berth time, SABINE may direct the LNG Vessel to vacate the berth and proceed to sea at utmost dispatch.

(iv)                  If an LNG Vessel fails to vacate the berth pursuant to the provisions of this Section 8.9 and after receipt of SABINE’s notice in respect thereof, Customer shall reimburse SABINE for any and all reasonable and actual

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damages its incurs as a result thereof, including amounts SABINE becomes contractually obligated to pay as demurrage or excess boil-off to any Other Customer.

(v)                     In the event an LNG Vessel fails to vacate the berth pursuant to this Section 8.9 and Customer is not taking actions to cause it to vacate the berth, SABINE may effect such removal at the expense of the Customer.

ARTICLE 9
RECEIPT OF LNG

9.1                               Title, Custody and Risk of Loss

(a)                                  Title to Customer’s Inventory, Risk of Loss.  Subject to Section 3.4, SABINE shall not assume title or risk of loss with respect to Customer’s Inventory even during periods when it is in the possession and control of SABINE.  For the avoidance of doubt, title and risk of loss with respect to Retainage shall pass to SABINE at the Receipt Point.

(b)                                 Possession and Control.  Possession and control of Customer’s LNG shall pass from Customer to SABINE upon delivery of same at the Receipt Point.  Possession and control of Customer’s Inventory shall pass from SABINE to Customer upon delivery of same at the Delivery Point.

9.2                               No Encumbrance

(a)                                  Customer’s Covenants.  Customer agrees to fully defend, indemnify and hold SABINE and its Affiliates harmless against all Encumbrances and Liabilities relating to such Encumbrances (collectively, “Claims”) regarding Customer’s Inventory, including Claims brought by Other Customers, other than any Claims caused by SABINE’s acts or omissions.  For purposes of this Section 9.2(a), the term “Encumbrance” shall include any mortgage, pledge, lien, charge, adverse claim, proprietary right, assignment by way of security, security interest, title retention, preferential right or trust arrangement or any other security agreement or arrangement having the effect of security.

(b)                                 SABINE’s Covenants.  SABINE covenants that it has the right to deliver, and shall deliver, to Customer at the Delivery Point all Gas held for Customer’s account free from all Claims relating thereto caused by SABINE’s acts or omissions.  SABINE agrees to fully defend, indemnify and hold Customer and its Affiliates harmless from and against all Claims regarding Customer’s Inventory caused by the acts or omissions of SABINE and Other Customers.

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9.3                               Receipt of LNG

The receipt of LNG from an LNG Vessel at the Receipt Point shall be carried out by use of pumps and other equipment on the LNG Vessel under such reasonable and customary conditions as are specified in the Sabine Pass Marine Operations Manual.

9.4                               Quality and Measurement of Customer’s LNG

Customer’s LNG shall be measured and tested in accordance with Annex I.  Customer shall ensure that all LNG delivered at the Receipt Point for Customer’s account shall conform to the following specifications:

(a)                                  Gross Heating Value.

LNG when delivered by Customer to SABINE shall have, in a gaseous state, a Gross Heating Value of not less than 950 BTUs per Standard Cubic Foot and not more than 1165 BTUs per Standard Cubic Foot.

(b)                                 Components.

(i)                         The LNG when delivered by Customer to SABINE shall, in a gaseous state, contain not less than eighty-four molecular percentage (84.0 MOL%) of methane (C1) and, for the components and substances listed below, such LNG shall not contain more than the following:

a.                                       Nitrogen (N2), 1.5 MOL%;

b.                                      Ethane (C2), 11 MOL%;

c.                                       Propane (C3), 3.5 MOL%;

d.                                      Butanes (C4) and heavier, 2 MOL%;

e.                                       Pentanes (C5) and heavier, 0.09 MOL%;

f.                                         Hydrogen sulfide (H2S), 0.25 grains per 100 Standard Cubic Feet; and

g.                                      Total sulfur content, 1.35 grains per 100 Standard Cubic Feet.

(ii)                      The LNG when delivered by Customer to SABINE shall contain no water, mercury, active bacteria or bacterial agents (including sulfate reducing bacteria or acid producing bacteria) or other contaminants or extraneous material.

9.5                               Off-Specification LNG

(a)                                  Refusal of Off-Spec LNG.  Without prejudice to any other rights and remedies of SABINE hereunder, SABINE may refuse to take delivery of all or part of any

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LNG not conforming to the quality specifications set forth in Section 9.4 (“Off-Spec LNG”).

(b)                                 Notice.  Customer shall provide notice to SABINE as soon as reasonably practicable of any existing or anticipated failure of the LNG available for delivery to SABINE hereunder to conform to the quality specifications set forth in Section 9.4, giving details of the nature and expected magnitude of the variance, the cause of the non-compliance and the probable duration thereof, including the Cargoes and Scheduled Arrival Dates to be affected thereby.  If so notified, SABINE shall as soon as possible inform Customer whether it intends to reject any of such Off-Spec LNG.  If SABINE is notified by Customer prior to the commencement of unloading of a Cargo at the Sabine Pass Facility that the LNG is Off-Spec LNG and the quantity is delivered to the Sabine Pass Facility, SABINE shall use reasonable endeavors to take delivery of any Cargoes which it would otherwise be entitled to reject; provided, however that SABINE shall be entitled to delay unloading of Off-Spec LNG for the period of time reasonably required for SABINE to determine whether it can take delivery of such Off-Spec LNG pursuant to this Section 9.5(b).  Subject to SABINE first using its reasonable endeavors to take delivery of any Cargoes containing Off-Spec LNG, SABINE shall:

(i)                         notify Customer that SABINE will take delivery of some or all of the affected Cargoes, without prejudice to SABINE’s rights and remedies with respect to such Off-Spec LNG other than SABINE’s right to reject said Cargo; or

(ii)                      reject all or any of the affected Cargoes.

(c)                                  Customer’s Responsibility.  If SABINE accepts delivery of a Cargo of Off-Spec LNG which it would otherwise be entitled to reject, Customer shall:

(i)                         bear the financial responsibility for all reasonable and actual incremental costs (other than capital costs) and Liabilities incurred by SABINE or any of SABINE’s Affiliates, in each case acting as a Reasonable and Prudent Operator, in connection with receiving and treating Off-Spec LNG by such means as are appropriate, including mixing such Off-Spec LNG with lower calorific value Gas or injecting nitrogen if facilities to allow for such mixing or injection presently exist at the Sabine Pass Facility; and

(ii)                      indemnify and hold harmless SABINE, its Affiliates and their respective directors, officers and employees from any and all Liabilities, including any of same attributable to claims of any Person and any Other Customers, which arise out of, are incident to or result from the acceptance, handling, disposal or use of Off-Spec LNG.

(d)                                 No Continuing Waiver.  Acceptance of Off-Spec LNG shall not prevent SABINE from refusing future deliveries of Off-Spec LNG.  No waiver by SABINE of any

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default by Customer of any of the specifications set forth in this Article 9 shall ever operate as a continuing waiver of such specification or as a waiver of any subsequent default, whether of a like or different character.

(e)                                  Extended Delivery of Off-Spec LNG.  If (i) Customer notifies SABINE pursuant to Section 9.5(b) of an anticipated delivery of two (2) or more Cargoes of Off-Spec LNG and (ii) the Parties agree for SABINE to incur incremental capital costs in order to accept delivery of such Cargoes, then Customer shall, in addition to its payment and indemnification obligations under Section 9.5(c), bear the financial responsibility for and directly fund, at SABINE’s election, all such incremental capital costs.

ARTICLE 10
REDELIVERY OF GAS

10.1                        General

(a)                                  Delivery Point.  Subject to Section 3.3, the quantity of Gas nominated by Customer for any day pursuant to Section 5.3 shall be delivered at the Delivery Point.

(b)                                 Commingled Stream.  Customer acknowledges and agrees that Customer’s Inventory shall be delivered by SABINE in a commingled stream, including that combined with LNG received by SABINE from Other Customers.  Customer furthers acknowledges and agrees that Customer shall have no right to receive Gas of the same quality as Customer’s LNG. Customer shall however, receive the same quantity of BTUs as the quantity tendered, less Retainage pursuant to Clause Clause C.3, and which Gas shall satisfy the requirements set forth in Section 10.3.

(c)                                  Odorization.  SABINE will deliver Customer’s Inventory at the Delivery Point in its natural state without the addition of any odorizing agent, and SABINE shall not be obligated to add odorizing agents to any Gas unless required to do so by a Governmental Authority.  SABINE does not assume any responsibility for Liabilities by reason of the fact that it has not odorized Customer’s Inventory prior to its delivery to Customer, except to the extent such liabilities arise from a failure to comply with the requirements of a Governmental Authority.

10.2                        Customer’s Responsibility

(a)                                  Downstream Arrangements.  Customer shall arrange for the transportation of Gas by Downstream Pipelines in order to meet its obligations to take redelivery of Gas in accordance with the provisions of Section 3.4 at the rates nominated by it pursuant to Section 5.3.  In this regard, Customer shall be solely responsible for making all necessary arrangements with third parties at or downstream of the Delivery Point to enable SABINE to deliver Gas to Downstream Pipelines on a timely basis pursuant to the terms and conditions of this Agreement.  Customer shall also be solely responsible for ensuring that all such arrangements are

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consistent with the terms and conditions of this Agreement and shall require all relevant third parties to confirm to SABINE all of Customer’s nominations and scheduling of deliveries of Gas, such confirmation to be by telephone, electronic transmission, or other means acceptable to SABINE and the Downstream Pipelines.  Such third-party arrangements shall be timely communicated to, and coordinated with, SABINE, and SABINE shall have no liability whatsoever for any failure of any such third party to provide downstream arrangements.  The rules, guidelines, and policies of a Downstream Pipeline transporting or purchasing any Gas for or from Customer at the Delivery Point (as may be changed from time to time by the Downstream Pipeline) shall set forth, among other things, the manner in which Customer’s Inventory is transported from the Delivery Point.  Customer and SABINE recognize that the receipt and delivery on the Downstream Pipeline’s facilities of Gas shall be subject to the operational procedures of such Downstream Pipeline.

(b)                                 Limitation.  Customer shall ensure that its Gas transportation and sales arrangements are in compliance with all applicable laws and regulations.

10.3                        Specifications and Measurement of Gas at the Delivery Point

Gas delivered to Customer at the Delivery Point shall be measured and tested in accordance with Annex II.  SABINE shall ensure that all Gas delivered at the Delivery Point for Customer’s account shall conform to the following specifications:

(a)                                  Gross Heating Value.  Gas when delivered by SABINE to Customer shall have a Gross Heating Value of not less than 950 BTUs per Standard Cubic Foot and not more than 1165 BTUs per Standard Cubic Foot.