CONSENT AND WAIVER NO. 4 TO CREDIT AGREEMENT

EXHIBIT 10.3

EXECUTION COPY

CONSENT AND WAIVER NO. 4

TO CREDIT AGREEMENT

This CONSENT AND WAIVER NO. 4 TO CREDIT AGREEMENT (this “ Consent and Waiver ”), dated as of May 31, 2005, is made among Sabine Pass LNG, L.P., a Delaware limited partnership (the “ Borrower ”), Société Générale, in its capacity as administrative agent for the Lenders (the “ Agent ”) and HSBC Bank USA, National Association, in its capacity as collateral agent for the Lenders (the “ Collateral Agent ”).

W I T N E S S E T H

WHEREAS, the Borrower, the Agent and the Collateral Agent are party to a Credit Agreement dated as of February 25, 2005 (as amended, modified and supplemented and in effect from time to time, the “ Credit Agreement ”), pursuant to which the lenders from time to time party thereto (the “ Lenders ”) have agreed to make loans to the Borrower in an aggregate principal amount of $822,000,000;

WHEREAS, the Borrower has been unable to procure the levels of insurance required pursuant to the EPC Contract and Credit Agreement on commercially reasonable terms;

WHEREAS, pursuant to, and as more fully described in, the waiver request letter dated as of May 18, 2005 (the “ Waiver Request Letter ”) attached hereto as Exhibit A, the Borrower has requested that the Lenders (a) consent to a modification to the EPC Contract and a waiver of certain provisions of the Credit Agreement to modify the required insurance coverages, and (b) consent to a Change Order to increase the contract price of the EPC contract by an amount not to exceed $6,900,000 to cover the increased costs of the contemplated insurance;

NOW THEREFORE, in consideration of the mutual agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:

Section 1. Definitions . Capitalized terms (including those used in the preamble and the recitals above) not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement and the principles of interpretation set forth therein shall apply herein.

Section 2. Consent . The Agent, acting with the consent of the Majority Lenders, hereby consents to the Borrower (a) entering into a modification of Attachment O to the EPC Contract solely to the extent necessary to effect the changes to Attachment O requested in the Waiver Request Letter, and (b) entering into a Change Order to increase the contract price of the EPC Contract by an amount not to exceed $6,900,000 to cover the increased costs of the contemplated insurance coverages above the current insurance allowance.

Section 3. Waiver . The Agent, acting with the consent of the Majority Lenders, hereby waives compliance with (a) Schedule 8.05(C)(6) of the Credit Agreement solely to the extent necessary to permit the Borrower to obtain pollution liability insurance with a term of no less than 41 months and (b) Schedule 8.05(F)(4)(a) of the Credit Agreement solely to the extent necessary to permit the Borrower to obtain delayed startup and strikes, riots and civil commotion coverages with term aggregate limits, in each case as set forth in the Waiver Request Letter.

Section 4. Effectiveness . This Consent and Waiver shall become effective upon receipt by the Agent of the counterparts of this Consent and Waiver duly executed and delivered by the Borrower and receipt of approval of the Majority Lenders.

Section 5. Miscellaneous .

(a) Limited Waiver .

(i) Except as expressly consented to or waived hereby, all of the representations, warranties, terms, covenants, conditions and other provisions of the Credit Agreement and the other Financing Documents shall remain unchanged and unwaived and shall continue to be and shall remain in full force and effect in accordance with their respective terms.

(ii) The consents and waivers set forth herein shall be limited precisely as provided for herein to the provisions expressly consented to or waived herein and shall not be deemed to be a waiver of any right, power or remedy of any Lender, the Agent or the Collateral Agent under, or a waiver of, consent to, or modification of, any other term or provision of the Credit Agreement, any other Financing Document referred to therein or herein or of any transaction or further or future action on the part of the Borrower which would require the consent of the Lenders under the Credit Agreement or any of the other Financing Documents.

(iii) Except as provided in Sections 2 and 3 hereof, nothing contained in this Consent and Waiver shall abrogate, prejudice, diminish or otherwise affect any powers, rights, remedies or obligations of any Person arising before the date of this Consent and Waiver.

(b) Financing Document . This Consent and Waiver shall be deemed to be a Financing Document referred to in the Credit Agreement and shall be construed, administered and applied in accordance with the terms and provisions thereof.

(c) Counterparts; Integration; Effectiveness . This Consent and Waiver may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument and any parties hereto may execute this Consent and Waiver by signing any such counterpart.

(d) Costs and Expenses . The Borrower agrees to pay and reimburse the Agent for all its reasonable costs and out-of-pocket expenses (including, without limitation, the reasonable fees and expenses of counsel to the Agent and the Lenders) incurred in connection with the preparation and delivery of this Consent and Waiver and such other related documents.

(e) Governing Law . THIS CONSENT AND WAIVER AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

[Signature Pages Follow]

IN WITNESS WHEREOF, the parties hereto have caused this Consent and Waiver to be duly executed and delivered as of the day and year first above written.

Appendix A