The Freeport LNG receiving terminal is currently under construction on Quintana Island, near Freeport, Texas. Cheniere developed this project and then sold a 60% interest to the Smith Entities, which subsequently sold a 15% limited partner interest to The Dow Chemical Company, or Dow Chemical. Cheniere also sold a 10% limited partner interest to Contango Oil & Gas Company, which it sold to Osaka Gas in early 2008. Cheniere continues to own a 30% non-operating limited partner interest in Freeport LNG Development, L.P.

In January 2005, FERC authorized Freeport LNG to commence construction of the LNG terminal and natural gas pipeline. Freeport LNG started construction in the first quarter of 2005. The estimated cost to construct the facility is $800 million to $850 million, before financing costs. Terminal operations are expected to commence in 2008.

Capacity for the Freeport LNG terminal is fully subscribed under TUAs for at least 20 years. ConocoPhillips contracted for 1.0 Bcf/d and Dow Chemical for 500 million cubic feet per day (MMcf/d). ConocoPhillips owns a 50% interest in the general partner entity responsible for managing construction and operations and has agreed to provide a substantial majority of the debt financing for the 1.5 Bcf/d Freeport LNG facility. In December 2005, Freeport LNG announced that it had closed a $383 million private placement of notes which will be used to finance portions of the initial phase and planned expansion of the project.

A filing has been made with FERC for an expansion of the Freeport LNG facility to increase its capacity to 4.0 Bcf/d, add a second dock, and include a third LNG storage tank and underground gas storage. ConocoPhillips exercised its option to acquire additional regasification capacity of 300 MMcf/d in connection with such an expansion. In addition, Freeport LNG announced in January 2005, that it had executed a long-term TUA with MC Global Gas Corporation, or MC Global, a subsidiary of Mitsubishi. Pursuant to the TUA, MC Global has reserved approximately 150 MMcf/d of regasification capacity in the Freeport LNG terminal expansion and has an option to increase its regasification capacity by an additional 100 MMcf/d.