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Commitments and Contingencies
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3 Months Ended |
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Mar. 31, 2012
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| Commitments and Contingencies Disclosure [Abstract] | |
| Commitments and Contingencies Disclosure [Text Block] |
Commitments and Contingencies
Crest Royalty
Under a settlement agreement dated as of June 14, 2001, we agreed to pay or cause certain affiliates, successors and assigns to pay a royalty, which we refer to as the Crest Royalty. This Crest Royalty is calculated based on the volume of natural gas processed through covered LNG facilities, subject to a maximum of approximately $11.0 million and a minimum of $2.0 million per production year. In 2003, Freeport LNG contractually assumed the obligation to pay the Crest Royalty for natural gas processed at Freeport LNG’s receiving terminal. The calculation of the Crest Royalty, and the scope of Freeport LNG's assumed obligation to pay the Crest Royalty, are being litigated in a declaratory judgment and breach of contract action pending in Texas state court. In March 2012, Cheniere purchased all of the rights, title, and interest in the Crest Royalty for a purchase price of $27.5 million. The purchase of the Crest Royalty represents the acquisition of payments that would have been due in future periods, therefore we recorded the purchase as an other non-current asset on our Consolidated Balance Sheets that is being amortized over the remaining useful life of the Sabine Pass LNG and Freeport LNG terminals. We classified the portion that will be amortized over the next twelve months as an other current asset and the remaining portion as an other non-current asset on our Consolidated Balance Sheets.
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