Cheniere Energy Inc. Reports 4th Quarter and 2003 Results.

Energy Editors/Business Editors

HOUSTON--(BUSINESS WIRE)--March 26, 2004

Cheniere Energy Inc. (AMEX:LNG) reported a net loss of $4,398,063, or $0.27 per share (basic and diluted) for the fourth quarter of 2003 compared with net income of $739,660, or $0.06 per share (basic and diluted), a year earlier. The major factors contributing to the fourth quarter loss in 2003 were: LNG receiving terminal development expenses of $3,343,895 (which were offset by a $1,462,490 minority interest in the operations of Corpus Christi LNG, L.P. ("Corpus LNG")), Cheniere's equity share of the loss in Freeport Development LNG, L.P. ("Freeport LNG") of $1,815,894 and other general and administrative expenses of $814,344.

Financial results for the year ended Dec. 31, 2003 reflect a loss of $5,288,017, or $0.36 per share (basic and diluted), compared to a loss of $5,632,308 or $0.42 per share (basic and diluted) in 2002. The major factors contributing to the loss for 2003 were: LNG receiving terminal development expenses of $6,704,538 (which were offset by a $3,015,468 minority interest in the operations of Corpus LNG), Cheniere's equity share of the loss in the Freeport LNG partnership of $4,471,529 and other general and administrative expenses of $2,542,399. These factors are offset by a $4,760,000 gain on the sale of 60% of the Freeport LNG assets and a $423,454 gain on the sale of a 10% limited partnership interest in the Freeport LNG terminal.

Cheniere's working capital at Dec. 31, 2003 was $155,526. However, as previously announced, in January 2004, the Company issued 1,100,000 shares of its common stock in a private placement under Regulation D to twelve accredited investors for a total consideration of $14,850,000, or $13.50 per share. After deducting placement fees, the net proceeds totaled $13,884,750. Also in January 2004, Cheniere received a payment of $2,500,000 from Freeport LNG, which was payable pursuant to Cheniere's February 2003 sale of its 60% interest in the Freeport LNG project. Additional proceeds of $1,309,559 were received in January and February 2004 related to exercises of stock options and warrants. The pro forma effects as of Dec. 31, 2003 of these transactions would have increased working capital to $17,849,835.

During the fourth quarter of 2003 and during the first quarter of 2004 the company and its venture partners reported achievement of various milestones:

Cheniere LNG, Inc. (a wholly owned subsidiary) on Dec. 22, 2003, filed applications with the Federal Energy Regulatory Commission (FERC) for permits to build liquefied natural gas (LNG) receiving terminals near Sabine Pass, Louisiana and near Corpus Christi, Texas. Both of the terminals are planned to be the largest built in North America, with daily processing capacity of 2.6 billion cubic feet (Bcf) of natural gas, which the company is actively marketing to potential partners and customers from gas owners to marketers to large end-users -- industrials and power generators.

Cheniere Pipeline Company (a wholly owned subsidiary) on Dec. 22, 2003 also filed applications with FERC for permits to construct natural gas pipelines from the sites of the planned Sabine Pass and Corpus Christi LNG receiving terminals to interconnection points with interstate and intrastate natural gas pipelines in Southwest Louisiana and South Texas. In February 2004, Cheniere initiated binding open seasons for the marketing of its planned natural gas pipelines. The open seasons will conclude on April 16, 2004.

Freeport LNG Development, L.P. (in which Cheniere holds a 30% limited partner interest) further advanced its project to build an LNG receiving terminal near Freeport, Texas, with daily processing capacity of 1.5 Bcf of natural gas. On Nov. 10, 2003, FERC issued its Draft Environmental Impact Statement declaring the project to have no significant impact on its surroundings. On Dec. 21, 2003, Freeport LNG announced that it had reached an agreement for ConocoPhillips (NYSE:COP) to acquire 1 Bcf/per day of capacity in the terminal for its use in exchange for ConocoPhillips providing a substantial majority of the construction funding to build the facility, estimated to exceed $500 million. The parties also agreed for ConocoPhillips to be primarily responsible for managing the construction and operation of the facility and as a user of the facility, to pay its proportionate share of operating expenses and fuel costs, a throughput fee of $0.05 per Mcf, and all amounts necessary to amortize the construction funding. In addition, ConocoPhillips paid Freeport LNG a nonrefundable capacity reservation fee of $10 million in January 2004. The transaction is expected to close in the spring of 2004, subject to completion of remaining documentation and satisfaction of closing conditions.

On Feb. 26, 2004, Cheniere announced that Freeport LNG had reached a 20-year terminal use agreement (TUA) with The Dow Chemical Company (NYSE:DOW) for up to 500 million cubic feet per day (Mmcf/d) of throughput capacity at the Freeport LNG receiving terminal pursuant to an option it had acquired in June 2003. Under the terms of the TUA, Dow has made a firm commitment to reserve throughput capacity for 1.8 million tons of LNG per year (250 Mmcf/d) and has until Aug. 31, 2004 to exercise an option on the remaining 250 Mmcf/d.

Freeport LNG has announced that it expects to receive the Final Environmental Impact Statement from FERC towards the end of April 2004 and that it expects to break ground on construction of the facility this year with a target of being operational by mid 2007.

Cheniere Energy Inc. is a Houston-based developer of liquefied natural gas receiving terminals and a Gulf of Mexico E&P company. Cheniere is developing Gulf Coast LNG receiving terminals near Sabine Pass, La., and near Corpus Christi, Texas. Cheniere is also a 30% limited partner in Freeport LNG Development, L.P., which is developing an LNG receiving terminal in Freeport, Texas. Cheniere conducts exploration for oil and gas in the Gulf of Mexico using a regional database of 7,000 square miles of PSTM 3D seismic data. Cheniere also owns 9% of Gryphon Exploration Company, along with Warburg, Pincus Equity Partners, L.P. which owns 91%. Additional information about Cheniere Energy Inc. may be found on its Web site at www.cheniere.com, by contacting the company's investor and media relations department toll-free at 888-948-2036 or by writing to: [e-mail].

Except for the historical statements contained herein, this news release presents forward-looking statements that involve risks and uncertainties. Although the company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved. Certain risks and uncertainties inherent in the company's business are set forth in the company's periodic reports that are filed with and available from the Securities and Exchange Commission.

(Financial table follows)

                         Cheniere Energy Inc.
                    Selected Financial Information

                         (Unaudited)
                 Three Months Ended Dec. 31,    Year Ended Dec. 31,
                 --------------------------- -------------------------
                      2003         2002          2003         2002
                 -------------- ------------ ------------ ------------
Revenues              $290,802      $17,498     $657,467     $239,055
                 -------------- ------------ ------------ ------------
Operating Costs
 and Expenses
  Production
   Costs                     -            -            -       90,038
  Depreciation,
   Depletion and
   Amortization        177,674       54,180      428,680      368,562
  General and
   Administrative
   Expenses
    LNG Terminal
     Development     3,343,895   (1,188,162)   6,704,538    1,556,782
    Other              814,344      413,217    2,542,399    1,918,580
                 -------------- ------------ ------------ ------------
     Total
      General
     and Admini-
     strative
     Expenses        4,158,239     (774,945)   9,246,937    3,475,362
                 -------------- ------------ ------------ ------------
     Total
      Operating
      Costs and
      Expenses       4,335,913     (720,765)   9,675,617    3,933,962
                 -------------- ------------ ------------ ------------
Loss from
 Operations         (4,045,111)     738,263   (9,018,150)  (3,694,907)
Equity in Net
 Loss of
 Unconsolidated
 Affiliate                   -            -            -   (2,184,847)
Equity in Net
 Loss of Limited
 Partnership        (1,815,894)           -   (4,471,529)           -
Gain on Sale of
 Proved Oil and
 Gas Properties              -            -            -      340,257
Gain on Sale of
 LNG Assets                  -            -    4,760,000            -
Gain on Sale of
 Limited
 Partnership
 Interest                    -            -      423,454            -
Loss on Early
 Extinguishment
 of Debt                     -            -            -     (100,544)
Interest Income            452        1,397        2,740        7,733
Minority Interest    1,462,490            -    3,015,468            -
                 -------------- ------------ ------------ ------------
Net Income (Loss)  $(4,398,063)    $739,660  $(5,288,017) $(5,632,308)
                 ============== ============ ============ ============

Net Income (Loss)
 Per Share -
 Basic and
 Diluted                $(0.27)       $0.06       $(0.36)      $(0.42)
                 ============== ============ ============ ============
Weighted Average
 Shares
 Outstanding -
 Basic and
 Diluted            16,100,842   13,297,393   14,771,700   13,297,393
                 ============== ============ ============ ============

                    Pro Forma
                 12/31/2003 (a)  12/31/2003   12/31/2002
                 -------------- ------------ ------------
Current Assets     $21,181,661   $4,487,352   $1,848,820
Oil and Gas
 Properties, net,
 full cost method   19,134,954   19,134,954   17,594,229
LNG Site Costs         310,500      310,500    1,400,000
Fixed Assets, net      578,281      578,281      216,341
Intangible LNG
 Assets                 79,670       79,670            -
                 -------------- ------------ ------------
Total Assets       $41,285,066  $24,590,757  $21,059,390
                 ============== ============ ============

Current
 Liabilities        $3,331,826   $4,331,826   $3,262,055
Deferred Revenue     1,000,000    1,000,000            -
Minority Interest      120,032      120,032            -
Stockholders'
 Equity             36,833,208   19,138,899   17,797,335
                 -------------- ------------ ------------
Total Liabilities
 and
 Stockholders'
 Equity            $41,285,066  $24,590,757  $21,059,390
                 ============== ============ ============

(a) Includes the pro forma effects as of Dec. 31, 2003 of Cheniere's
    common stock issued pursuant to the private placement in January
    2004 ($13,884,750, net), receipt of final payment from Freeport
    LNG in January 2004 ($2,500,000), common stock issued upon warrant
    and stock option exercises in January and February 2004
    ($1,309,559), and repayment of the Company's note payable in
    January 2004 ($1,000,000).