SAN ANTONIO, Oct. 5 /PRNewswire-FirstCall/ -- Tidelands Oil & Gas Corporation (OTCBulletinBoard:TIDE) today announced that it has entered into an agreement with Cheniere Energy, Inc. to fund the development of Tidelands' Burgos Hub Export/Import Project, which potentially will connect the North American pipeline grid to natural gas supplies and markets in northern Mexico. Cheniere has purchased an 80% equity interest in the project in exchange for up to $9 million in current and future payments plus royalties to be paid to Tidelands.
James B. Smith, Tidelands' President and Chief Executive Officer said, "We are pleased to have Cheniere as a partner in this venture. Their demonstrated vision in other energy infrastructure projects and their potential ability to secure competitive gas supply for our target markets represents real value added to the Burgos Hub Export/Import Project. With Cheniere as a partner, we will be able to accelerate development of the project to streamline the North American natural gas market."
Tidelands received an initial $1 million payment when the agreement with Cheniere was signed on September 28, 2007. Additional payments will be made as construction begins on each phase of the project. In addition, Cheniere will pay Tidelands $25,000 per month for 24 months, for management consulting related to the project. Upon completion of each phase, Tidelands will receive a $0.01 per MMBtu royalty on Phase I and Phase II subscribed volumes and a $0.02 per MMBtu royalty on Phase III subscribed storage. Cheniere will fund, at its discretion, all project development expenses up and until construction of each Phase begins. At that time each party will fund their respective share.
The Burgos Hub Export/Import Project will be constructed in three phases. Phase I will consist of a pipeline extending from the Valero Gilmore Plant, located at Hidalgo County, Texas to Estacion Arguelles, located in Tamaulipas, Mexico, to Station 19 of Pemex Gas y Petroquimica Basica to Monterrey, Mexico; Phase II will be the construction of a pipeline extending from the Donna Station to the Brazil Storage facility to Station 19 of Pemex Gas y Petroquimica Basica; and Phase III will be the construction of the Brazil Storage Facility, an underground natural gas storage facility to be located in Rio Bravo, Mexico.
About Tidelands Oil & Gas Corporation
Tidelands Oil & Gas Corporation, San Antonio, Texas, focuses on development of mid-stream natural gas projects including natural gas pipeline infrastructure, retail NGL sales, and natural gas receiving and storage facilities. Through its subsidiaries, Tidelands offers a full suite of services and has the capability to satisfy a wide variety of customer needs, both domestically and internationally. For more information about the Company, please contact Jim Smith at firstname.lastname@example.org.
Cautionary Statement to Investors: Statements made in this release with respect to Tidelands' current plans, estimates, strategies and beliefs and other statements that are not historical facts are forward-looking statements about the future performance of Tidelands. Forward-looking statements include, but are not limited to, those statements using words such as "believe," "expect," "plans," "strategy," "prospects," "forecast," "estimate," "project," "anticipate," "potential" "aim," "may" or "might" and words of similar meaning in connection with a discussion of future operations, financial performance, events or conditions. From time to time, oral or written forward-looking statements may also be included in other materials released to the public. These statements are based on management's assumptions and beliefs in light of the information currently available to it. Tidelands cautions you that a number of important risks and uncertainties could cause actual results to differ materially from those discussed in the forward-looking statements, and therefore you should not place undue reliance on them. Those cautionary risks are outlined in the Company's filings with the U.S. Securities and Exchange Commission. You also should not rely on any obligation of Tidelands to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Tidelands disclaims any such obligation. Furthermore, this news release is not an offer or a solicitation of an offer to buy or sell securities. Please be aware that decisions regarding investing are the responsibility of users themselves.
Source: Tidelands Oil & Gas Corporation