HOUSTON, July 31, 2014
/PRNewswire/ -- Cheniere Energy, Inc. ("Cheniere") (NYSE MKT:
LNG) reported a net loss attributable to common stockholders of
$201.9 million, or $0.90 per share (basic and diluted), for the
three months ended June 30, 2014,
compared to a net loss attributable to common stockholders of
$154.8 million, or $0.71 per share (basic and diluted), for the
comparable 2013 period. For the six months ended June 30, 2014, Cheniere reported a net loss
attributable to common stockholders of $299.7 million, or $1.34 per share (basic and diluted), compared to
a net loss attributable to common stockholders of $271.9 million, or $1.26 per share (basic and diluted), during the
corresponding period of 2013.
Results include significant items for the three and six months
ended June 30, 2014 of $189.8 million and $236.6
million, compared to $7.1
million and $41.6 million for
the comparable 2013 periods, respectively. The significant items
for the three and six months ended June 30,
2014 related to liquefied natural gas ("LNG") terminal
development expenses, derivative losses, and loss on early
extinguishment of debt. LNG terminal development expenses were
primarily for the liquefaction facilities being developed by us
near Corpus Christi, Texas (the
"Corpus Christi Liquefaction Project"), and for the liquefaction
facilities Cheniere Energy Partners, L.P. ("Cheniere Partners") is
developing through Sabine Pass Liquefaction, LLC ("Sabine Pass
Liquefaction") at the Sabine Pass LNG terminal adjacent to the
existing regasification facilities (the "Sabine Pass Liquefaction
Project"). Derivative losses were primarily the result of the
change in fair value of Sabine Pass Liquefaction's interest rate
derivatives to hedge the exposure to volatility in a portion of the
floating-rate interest payments under Sabine Pass Liquefaction's
four credit facilities (the "2013 Liquefaction Credit Facilities").
Loss on early extinguishment of debt was related to Sabine Pass
Liquefaction's write-off of debt issuance costs in connection with
the early extinguishment of $2.1
billion of the 2013 Liquefaction Credit Facilities.
General and administrative expense decreased $67.4 million and $79.3
million in the three and six months ended June 30, 2014, respectively, as compared to the
three and six months ended June 30,
2013, primarily as a result of the timing of awards under
bonus plans relating to the Sabine Pass Liquefaction Project.
Included in general and administrative expenses were non-cash
compensation expenses of $24.6
million and $59.2 million for
the three and six months ended June 30,
2014, respectively, compared to $103.2 million and $162.4
million for the comparable 2013 periods, respectively.
Results are reported on a consolidated basis and include our
ownership interest in Cheniere Partners, which is based on our 100%
ownership of the general partner and 84.5% ownership interest in
Cheniere Energy Partners LP Holdings, LLC which owns 55.9% of
Cheniere Partners.
Overview of Recent Significant Events
- Our wholly owned subsidiary, Corpus Christi Liquefaction, LLC
("Corpus Christi Liquefaction"), has entered into LNG Sale and
Purchase Agreements ("SPAs") beginning in the second quarter 2014
through July 2014 with the following
customers for the Corpus Christi Liquefaction Project:
- Endesa Generación, S.A. (which has been assigned to Endesa
S.A.) and Endesa S.A. (together, "Endesa") under which Endesa has
agreed to purchase a total of 117.3 million MMBtu of LNG per year
(approximately 2.25 mtpa) upon the date of the first commercial
delivery of LNG from Train 1;
- Iberdrola S.A. ("Iberdrola") under which Iberdrola has agreed
to purchase a total of 39.7 million MMBtu of LNG per year
(approximately 0.76 mtpa) upon the date of first commercial
delivery of LNG from Train 2. In addition, Corpus Christi
Liquefaction will provide Iberdrola with bridging volumes of 19.8
million MMBtu per contract year, starting on the date on which
Train 1 becomes commercially operable and ending on the date of the
first commercial delivery of LNG from Train 2;
- Gas Natural Fenosa LNG SL ("Gas Natural Fenosa") under which
Gas Natural Fenosa has agreed to purchase a total of 78.2 million
MMBtu of LNG per year (approximately 1.5 mtpa) upon the date of
first commercial delivery of LNG from Train 2;
- Woodside Energy Trading Singapore Pte Ltd ("Woodside") under
which Woodside has agreed to purchase a total of 44.1 million MMBtu
of LNG per year (approximately 0.85 mtpa) upon the date of first
commercial delivery of LNG from Train 2;
- PT Pertamina (Persero) ("Pertamina") under which Pertamina has
agreed to purchase an additional 39.7 million MMBtu of LNG per year
(approximately 0.76 mtpa) upon the date of first commercial
delivery of LNG from Train 2; and
- Électricité de France, S.A.
("EDF") under which EDF has agreed to purchase 40.0 million MMBtu
of LNG per year (approximately 0.77 mtpa) upon the date of first
commercial delivery of LNG from Train 3. In addition, Corpus
Christi Liquefaction will provide EDF with bridging volumes of 20.0
million MMBtu per contract year, starting on the date on which
Train 2 becomes commercially operable and ending on the date of the
first commercial delivery of LNG from Train 3.
- In May 2014, Sabine Pass
Liquefaction issued an aggregate principal amount of $2.0 billion of 5.75% Senior Secured Notes due
2024 and $0.5 billion of 5.625%
Senior Secured Notes due 2023. Net proceeds from the offering of
approximately $2.5 billion were used
to repay certain outstanding indebtedness under the 2013
Liquefaction Credit Facilities, and the remaining proceeds are
being used to pay a portion of the capital costs in connection with
the construction of the first four natural gas liquefaction trains
("Trains") of the Sabine Pass Liquefaction Project in lieu of a
terminated portion of the commitments under the 2013 Liquefaction
Credit Facilities.
Liquefaction Projects Update
Sabine Pass Liquefaction Project
Through Cheniere Partners we are developing up to six Trains,
each with an expected nominal production capacity of approximately
4.5 mtpa at the Sabine Pass LNG terminal adjacent to the existing
regasification facilities.
The Trains are in various stages of development.
- Construction on Trains 1 and 2 began in August 2012, and as of June 30, 2014, the overall project for Trains 1
and 2 was approximately 69% complete, which is ahead of the
contractual schedule. Based on our current construction schedule,
we anticipate that Train 1 will produce LNG as early as late
2015.
- Construction on Trains 3 and 4 began in May 2013, and as of June
30, 2014, the overall project for Trains 3 and 4 was
approximately 36% complete, which is ahead of the contractual
schedule. We expect Trains 3 and 4 to become operational in late
2016 and 2017, respectively.
- Trains 5 and 6 are under development. We have entered into SPAs
for approximately 3.75 mtpa in aggregate that commence with the
date of first commercial delivery for Train 5. We have received
authorizations from the Department of Energy ("DOE") to export 503
Bcf per year of LNG volumes from Trains 5 and 6 to free trade
agreement ("FTA") countries. Authorization to export LNG to non-FTA
countries is pending. Federal Energy Regulatory Commission ("FERC")
authorization is also pending. We will contemplate making a final
investment decision to commence construction on Trains 5 and 6
based upon, among other things, entering into acceptable commercial
arrangements, receiving all regulatory approvals and obtaining
financing.
Corpus Christi Liquefaction Project
We continue to make progress on the commercialization and
development of the Corpus Christi Liquefaction Project, which is
being designed for up to three Trains with expected aggregate
nominal production capacity of approximately 13.5 mtpa of LNG.
- To date, we have entered into SPAs aggregating approximately
6.9 mtpa of LNG volumes commencing with Trains 1 and 2 and 0.77
mtpa of LNG volumes commencing with Train 3.
- We have received authorization from the DOE to export up to 767
Bcf per year of domestically produced LNG to FTA countries.
Authorization to export LNG to non-FTA countries is pending. FERC
authorization is also pending.
We will contemplate making a final investment decision to
commence construction of the Corpus Christi Liquefaction Project
based upon, among other things, entering into acceptable commercial
arrangements, receiving all regulatory approvals and obtaining
financing.
Timelines for Liquefaction Projects
|
|
Target
Date
|
|
|
Sabine Pass
Liquefaction
|
|
Corpus Christi
Liquefaction
|
Milestone
|
|
Trains
1 &
2
|
|
Trains
3 &
4
|
|
Trains
5 &
6
|
|
|
DOE export
authorization
|
|
Received
|
|
Received
|
|
Received
FTA
Pending
Non-FTA
|
|
Received FTA;
Pending Non-FTA
|
Definitive commercial
agreements
|
|
Completed
7.7 mtpa
|
|
Completed
8.3 mtpa
|
|
T5:
Completed
T6: 2014
|
|
T1-T2:
Completed
|
- BG Gulf Coast LNG,
LLC
|
|
4.2 mtpa
|
|
1.3 mtpa
|
|
|
|
|
- Gas Natural
Fenosa
|
|
3.5 mtpa
|
|
|
|
|
|
|
- KOGAS
|
|
|
|
3.5 mtpa
|
|
|
|
|
- GAIL (India)
Ltd.
|
|
|
|
3.5 mtpa
|
|
|
|
|
- Total Gas &
Power N.A.
|
|
|
|
|
|
2.0 mtpa
|
|
|
- Centrica
plc
|
|
|
|
|
|
1.75 mtpa
|
|
|
- PT
Pertamina
|
|
|
|
|
|
|
|
1.52 mtpa
|
- Endesa,
S.A.
|
|
|
|
|
|
|
|
2.25 mtpa
|
- Iberdrola,
S.A.
|
|
|
|
|
|
|
|
0.76 mtpa
|
- Gas Natural Fenosa
LNG SL
|
|
|
|
|
|
|
|
1.50 mtpa
|
- Woodside Energy
Trading Singapore
|
|
|
|
|
|
|
|
0.85 mtpa
|
- Électricité de
France, S.A.
|
|
|
|
|
|
|
|
0.77 mtpa
|
EPC
contract
|
|
Completed
|
|
Completed
|
|
2015
|
|
Completed
|
Financing
|
|
|
|
|
|
2015
|
|
2014
|
- Equity
|
|
Completed
|
|
Completed
|
|
|
|
|
- Debt
commitments
|
|
Received
|
|
Received
|
|
|
|
|
FERC
authorization
|
|
|
|
|
|
|
|
|
- FERC
Order
|
|
Received
|
|
Received
|
|
2014/2015
|
|
2014/2015
|
- Certificate to
commence construction
|
|
Received
|
|
Received
|
|
|
|
|
Issue Notice to
Proceed
|
|
Completed
|
|
Completed
|
|
2015
|
|
2015
|
Commence
operations
|
|
2015/2016
|
|
2016/2017
|
|
2018/2019
|
|
2018/2019
|
Cheniere Energy, Inc. is a Houston-based energy company primarily engaged
in LNG-related businesses, and owns and operates the Sabine Pass
LNG terminal and Creole Trail Pipeline in Louisiana. Cheniere is pursuing related
business opportunities both upstream and downstream of the Sabine
Pass LNG terminal. Through its subsidiary, Cheniere Energy
Partners, L.P., Cheniere is developing a liquefaction project at
the Sabine Pass LNG terminal adjacent to the existing
regasification facilities for up to six Trains, each of which is
expected to have a nominal production capacity of approximately 4.5
mtpa. Construction has begun on Trains 1 through 4 at the Sabine
Pass Liquefaction Project. Cheniere has also initiated a project to
develop liquefaction facilities near Corpus Christi, Texas. The Corpus Christi
Liquefaction Project is being designed for up to three Trains, with
expected aggregate nominal production capacity of approximately
13.5 mtpa of LNG, three LNG storage tanks with capacity of 10.1
Bcfe and two LNG carrier docks. Commencement of construction for
the Corpus Christi Liquefaction Project is subject, but not
limited, to obtaining regulatory approvals, entering into long-term
customer contracts sufficient to underpin financing of the project,
obtaining financing, and Cheniere making a final investment
decision. Cheniere believes that LNG exports from the Corpus
Christi Liquefaction Project could commence as early as 2018.
For additional information, please refer to the Cheniere Energy,
Inc. website at www.cheniere.com and Quarterly Report on Form 10-Q
for the quarter ended June 30, 2014,
filed with the Securities and Exchange Commission.
This press release contains certain statements that may include
"forward-looking statements" within the meanings of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. All statements, other than statements of
historical fact, included herein are "forward-looking statements."
Included among "forward-looking statements" are, among other
things, (i) statements regarding Cheniere's business strategy,
plans and objectives, including the construction and operation of
liquefaction facilities, (ii) statements regarding expectations
regarding regulatory authorizations and approvals, (iii) statements
expressing beliefs and expectations regarding the development of
Cheniere's LNG terminal and pipeline businesses, including
liquefaction facilities, (iv) statements regarding the business
operations and prospects of third parties, (v) statements regarding
potential financing arrangements and (vi) statements regarding
future discussions and entry into contracts. Although Cheniere
believes that the expectations reflected in these forward-looking
statements are reasonable, they do involve assumptions, risks and
uncertainties, and these expectations may prove to be incorrect.
Cheniere's actual results could differ materially from those
anticipated in these forward-looking statements as a result of a
variety of factors, including those discussed in Cheniere's
periodic reports that are filed with and available from the
Securities and Exchange Commission. You should not place undue
reliance on these forward-looking statements, which speak only as
of the date of this press release. Other than as required under the
securities laws, Cheniere does not assume a duty to update these
forward-looking statements.
(Financial Table Follows)
Cheniere Energy,
Inc.
|
Selected Financial
Information
|
(in thousands,
except per share data)
|
(unaudited)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
LNG terminal
revenues
|
$
|
66,841
|
|
|
$
|
66,426
|
|
|
$
|
133,260
|
|
|
$
|
132,487
|
|
Marketing and trading
revenues (losses)
|
324
|
|
|
416
|
|
|
981
|
|
|
(149)
|
|
Other
|
480
|
|
|
335
|
|
|
954
|
|
|
745
|
|
Total
revenues
|
67,645
|
|
|
67,177
|
|
|
135,195
|
|
|
133,083
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and
expenses
|
|
|
|
|
|
|
|
|
|
|
|
General and
administrative expense
|
67,720
|
|
|
135,076
|
|
|
141,528
|
|
|
220,875
|
|
Depreciation
|
17,298
|
|
|
15,173
|
|
|
32,773
|
|
|
30,286
|
|
LNG terminal
operating expense
|
29,409
|
|
|
31,068
|
|
|
43,096
|
|
|
46,327
|
|
LNG terminal
development expense
|
15,263
|
|
|
22,081
|
|
|
27,375
|
|
|
39,168
|
|
Other
|
90
|
|
|
57
|
|
|
170
|
|
|
159
|
|
Total operating costs
and expenses
|
129,780
|
|
|
203,455
|
|
|
244,942
|
|
|
336,815
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
(62,135)
|
|
|
(136,278)
|
|
|
(109,747)
|
|
|
(203,732)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense)
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
(43,789)
|
|
|
(42,016)
|
|
|
(84,059)
|
|
|
(82,278)
|
|
Loss on early
extinguishment of debt
|
(114,335)
|
|
|
(80,510)
|
|
|
(114,335)
|
|
|
(80,510)
|
|
Derivative gain
(loss), net
|
(60,178)
|
|
|
95,509
|
|
|
(94,859)
|
|
|
78,041
|
|
Other income
(expense)
|
(189)
|
|
|
413
|
|
|
121
|
|
|
889
|
|
Total other
expense
|
(218,491)
|
|
|
(26,604)
|
|
|
(293,132)
|
|
|
(83,858)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income
taxes and non-controlling interest
|
(280,626)
|
|
|
(162,882)
|
|
|
(402,879)
|
|
|
(287,590)
|
|
Income tax
provision
|
(84)
|
|
|
(1,022)
|
|
|
(176)
|
|
|
(942)
|
|
Net loss
|
(280,710)
|
|
|
(163,904)
|
|
|
(403,055)
|
|
|
(288,532)
|
|
Less: net loss
attributable to non-controlling interest
|
(78,782)
|
|
|
(9,140)
|
|
|
(103,317)
|
|
|
(16,664)
|
|
Net loss attributable
to common stockholders
|
$
|
(201,928)
|
|
|
$
|
(154,764)
|
|
|
$
|
(299,738)
|
|
|
$
|
(271,868)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share
attributable to common stockholders—basic and diluted
|
$
|
(0.90)
|
|
|
$
|
(0.71)
|
|
|
$
|
(1.34)
|
|
|
$
|
(1.26)
|
|
Weighted average
number of common shares outstanding—basic and diluted
|
223,602
|
|
|
217,397
|
|
|
223,406
|
|
|
216,520
|
|
|
June
30,
|
|
December
31,
|
|
2014
|
|
|
2013
|
|
ASSETS
|
(unaudited)
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
889,887
|
|
|
$
|
960,842
|
|
Restricted cash and
cash equivalents
|
670,659
|
|
|
598,064
|
|
Accounts and interest
receivable
|
4,175
|
|
|
4,486
|
|
LNG
inventory
|
5,800
|
|
|
10,563
|
|
Prepaid expenses and
other
|
20,963
|
|
|
17,225
|
|
Total current
assets
|
1,591,484
|
|
|
1,591,180
|
|
|
|
|
|
|
|
Non-current
restricted cash and cash equivalents
|
1,855,769
|
|
|
1,031,399
|
|
Property, plant and
equipment, net
|
7,933,868
|
|
|
6,454,399
|
|
Debt issuance costs,
net
|
259,716
|
|
|
313,944
|
|
Non-current
derivative assets
|
20,236
|
|
|
98,123
|
|
Goodwill
|
76,819
|
|
|
76,819
|
|
Other
|
121,403
|
|
|
107,373
|
|
Total
assets
|
$
|
11,859,295
|
|
|
$
|
9,673,237
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Accounts
payable
|
$
|
30,205
|
|
|
$
|
10,367
|
|
Accrued
liabilities
|
320,918
|
|
|
186,552
|
|
Deferred
revenue
|
26,639
|
|
|
26,593
|
|
Other
|
13,121
|
|
|
13,499
|
|
Total current
liabilities
|
390,883
|
|
|
237,011
|
|
|
|
|
|
|
|
Long-term debt,
net
|
8,987,850
|
|
|
6,576,273
|
|
Long-term deferred
revenue
|
15,500
|
|
|
17,500
|
|
Other non-current
liabilities
|
4,105
|
|
|
2,396
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
|
Preferred stock,
$0.0001 par value, 5.0 million shares authorized, none
issued
|
—
|
|
|
—
|
|
Common stock, $0.003
par value
|
|
|
|
|
|
Authorized: 480.0
million shares at June 30, 2014 and December 31, 2013
|
|
|
|
|
|
Issued and
outstanding: 238.1 million shares at June 30, 2014 and December 31,
2013
|
715
|
|
|
716
|
|
Treasury stock: 9.2
million shares and 9.0 million shares at June 30, 2014 and December
31, 2013, respectively, at cost
|
(189,646)
|
|
|
(179,826)
|
|
Additional
paid-in-capital
|
2,533,119
|
|
|
2,459,699
|
|
Accumulated
deficit
|
(2,400,645)
|
|
|
(2,100,907)
|
|
Total stockholders'
equity
|
(56,457)
|
|
|
179,682
|
|
Non-controlling
interest
|
2,517,414
|
|
|
2,660,375
|
|
Total
equity
|
2,460,957
|
|
|
2,840,057
|
|
Total liabilities and
equity
|
$
|
11,859,295
|
|
|
$
|
9,673,237
|
|
As of June 30, 2014, we had cash
and cash equivalents of $889.9
million available to Cheniere. In addition, we had current
and non-current restricted cash and cash equivalents of
$2,526.4 million (which included
current and non-current restricted cash and cash equivalents
available to Cheniere Partners, Sabine Pass Liquefaction and Sabine
Pass LNG, L.P.) designated for the following purposes: $2.1 billion for the Sabine Pass Liquefaction
Project, $51.4 million for Cheniere
Creole Trail Pipeline, L.P., $91.1
million for interest payments related to the Sabine Pass LNG
senior secured notes, and $319.2
million for other restricted purposes.
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SOURCE Cheniere Energy, Inc.