HOUSTON, July 31, 2014 /PRNewswire/ -- Cheniere
Energy Partners, L.P. ("Cheniere Partners") (NYSE MKT: CQP)
reported a net loss of $226.2 million
and $296.0 million for the three and
six months ended June 30, 2014,
compared to a net loss of $47.0
million and $98.7 million for
the same periods in 2013, respectively.
Significant items for the three and six months ended
June 30, 2014 were a loss of
$178.5 million and $216.9 million, compared to a gain of
$11.1 million and a loss of
$10.3 million for the comparable 2013
periods, respectively. Significant items for the three and six
months ended June 30, 2014 related to
development expenses, loss on early extinguishment of debt, and
derivative losses. Development expenses were primarily for the
liquefaction facilities we are developing through Sabine Pass
Liquefaction, LLC ("Sabine Pass Liquefaction") at the Sabine Pass
LNG terminal adjacent to the existing regasification facilities
(the "Liquefaction Project"). 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 under Sabine Pass
Liquefaction's four credit facilities (the "2013 Liquefaction
Credit Facilities.")
General and administrative expense (including affiliate)
decreased by $11.4 million and
$7.8 million for the three and six
months ended June 30, 2014, compared
to the corresponding 2013 periods, respectively, primarily due to
costs incurred under certain management service agreements with
wholly owned subsidiaries of Cheniere Energy, Inc.
("Cheniere"). Sabine Pass Liquefaction and Cheniere Creole
Trail Pipeline, L.P. are required to pay monthly fees to an
affiliate of Cheniere based upon the capital expenditures incurred
in the previous month for construction of Trains 1 through 4 of the
Liquefaction Project and construction of certain modifications
to the Creole Trail pipeline, respectively.
Overview of Recent Significant Events
- 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 Liquefaction Project in lieu of a terminated
portion of the commitments under the 2013 Liquefaction Credit
Facilities.
Liquefaction Project Update
We continue to make progress on the Liquefaction Project, which
is being developed for up to six Trains, each with an expected
nominal production capacity of approximately 4.5 mtpa.
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 liquefied natural gas
("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.
Liquefaction Project Timeline
|
|
Target
Date
|
Milestone
|
|
Trains
1 &
2
|
|
Trains
3 &
4
|
|
Trains
5 &
6
|
DOE export
authorization
|
|
Received
|
|
Received
|
|
Received
FTA
Pending
Non-FTA
|
Definitive commercial
agreements
|
|
Completed 7.7
mtpa
|
|
Completed 8.3
mtpa
|
|
T5:
Completed
T6: 2014
|
- 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
|
EPC
contract
|
|
Completed
|
|
Completed
|
|
2015
|
Financing
|
|
|
|
|
|
2015
|
- Equity
|
|
Completed
|
|
Completed
|
|
|
- Debt
commitments
|
|
Received
|
|
Received
|
|
|
FERC
authorization
|
|
|
|
|
|
|
- FERC
Order
|
|
Received
|
|
Received
|
|
2014/2015
|
- Certificate to
commence construction
|
|
Received
|
|
Received
|
|
|
Issue Notice to
Proceed
|
|
Completed
|
|
Completed
|
|
2015
|
Commence
operations
|
|
2015/2016
|
|
2016/2017
|
|
2018/2019
|
Distributions to Unitholders
We estimate that the
annualized distribution to common unitholders for fiscal year 2014
will be $1.70 per unit.
We will pay a cash distribution per common unit of $0.425 to unitholders of record as of
August 1, 2014, and the related
general partner distribution on August 14,
2014.
Cheniere Partners owns 100 percent of the Sabine Pass LNG
terminal located on the Sabine
Pass deep water shipping channel less than four miles from
the Gulf Coast. The Sabine Pass LNG terminal includes existing
infrastructure of five LNG storage tanks with capacity of
approximately 16.9 billion cubic feet equivalent (Bcfe), two docks
that can accommodate vessels with capacity of up to 265,000 cubic
meters and vaporizers with regasification capacity of approximately
4.0 Bcf/d.
Cheniere Partners is developing natural gas liquefaction
facilities at the Sabine Pass LNG terminal adjacent to the existing
regasification facilities. Cheniere Partners plans to construct
over time up to six natural gas Trains, which are in various stages
of development. Each Train is expected to have a nominal production
capacity of approximately 4.5 mtpa. The overall project completion
of Trains 1 and 2 is approximately 69% as of June 30, 2014. The overall project completion of
Trains 3 and 4 is approximately 36% as of June 30, 2014. Sabine Pass Liquefaction recently
began the development of Trains 5 and 6 and commenced the
regulatory process in February 2013.
Sabine Pass Liquefaction has entered into six third-party LNG SPAs
that in the aggregate equate to 19.75 mtpa and commence with the
date of first commercial delivery of Trains 1 through 5 as
specified in the respective SPAs. Cheniere Partners has placed
documentation pertaining to the Liquefaction Project, including the
applications and supporting studies, on its website located at
http://www.cheniereenergypartners.com.
For additional information, please refer to the Cheniere Energy
Partners, L.P. website at www.cheniereenergypartners.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." All statements, other than statements
of historical facts, included herein are "forward-looking
statements." Included among "forward-looking statements" are, among
other things, (i) statements regarding Cheniere Partners' 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 Partners' LNG terminal and liquefaction
business, (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 Partners
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 Partners' 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
Partners' 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 Partners does not assume a duty to update
these forward-looking statements.
(Financial Table
Follows)
|
Cheniere Energy
Partners, L.P.
|
Selected Financial
Information
|
(in thousands,
except per unit data) (1)
|
(unaudited)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
66,594
|
|
|
$
|
66,842
|
|
|
$
|
133,043
|
|
|
$
|
132,406
|
Revenues—affiliate
|
734
|
|
|
795
|
|
|
1,506
|
|
|
1,341
|
Total
revenues
|
67,328
|
|
|
67,637
|
|
|
134,549
|
|
|
133,747
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and
expenses
|
|
|
|
|
|
|
|
|
|
|
Operating and
maintenance expense
|
24,232
|
|
|
20,902
|
|
|
33,451
|
|
|
29,198
|
Operating and
maintenance expense—affiliate
|
4,860
|
|
|
10,307
|
|
|
9,291
|
|
|
17,220
|
Depreciation
expense
|
14,722
|
|
|
14,355
|
|
|
29,040
|
|
|
28,658
|
Development
expense
|
3,792
|
|
|
3,318
|
|
|
7,288
|
|
|
6,803
|
Development
expense—affiliate
|
242
|
|
|
611
|
|
|
394
|
|
|
1,062
|
General and
administrative expense
|
4,234
|
|
|
2,028
|
|
|
7,600
|
|
|
5,803
|
General and
administrative expense—affiliate
|
22,972
|
|
|
36,543
|
|
|
50,125
|
|
|
59,759
|
Total operating costs
and expenses
|
75,054
|
|
|
88,064
|
|
|
137,189
|
|
|
148,503
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
(7,726)
|
|
|
(20,427)
|
|
|
(2,640)
|
|
|
(14,756)
|
|
|
|
|
|
|
|
|
|
|
|
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)
|
(196)
|
|
|
434
|
|
|
(64)
|
|
|
760
|
Total other
expense
|
(218,498)
|
|
|
(26,583)
|
|
|
(293,317)
|
|
|
(83,987)
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
$
|
(226,224)
|
|
|
$
|
(47,010)
|
|
|
$
|
(295,957)
|
|
|
$
|
(98,743)
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable
to the Creole Trail Pipeline Business
|
$
|
—
|
|
|
$
|
(9,148)
|
|
|
$
|
—
|
|
|
$
|
(18,394)
|
Net loss attributable
to partners
|
$
|
(226,224)
|
|
|
$
|
(37,862)
|
|
|
$
|
(295,957)
|
|
|
$
|
(80,349)
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net
income (loss) per common unit
|
$
|
(0.85)
|
|
|
$
|
0.11
|
|
|
$
|
(0.91)
|
|
|
$
|
0.21
|
Weighted average
number of common units outstanding used for basic and diluted net
income (loss) per common unit calculation
|
57,079
|
|
|
57,079
|
|
|
57,079
|
|
|
51,345
|
|
June 30,
2014
|
|
December 31,
2013
|
Cash and cash
equivalents
|
$
|
307,487
|
|
|
$
|
351,032
|
|
Restricted cash and
cash equivalents
|
357,793
|
|
|
227,652
|
|
LNG
inventory
|
5,800
|
|
|
10,430
|
|
Other current assets
(2)
|
15,122
|
|
|
24,014
|
|
Non-current
restricted cash and cash equivalents
|
1,849,424
|
|
|
1,025,056
|
|
Property, plant and
equipment, net
|
7,815,072
|
|
|
6,383,939
|
|
Debt issuance costs,
net
|
259,716
|
|
|
313,944
|
|
Non-current
derivative assets
|
20,236
|
|
|
98,123
|
|
Other
assets
|
81,790
|
|
|
82,593
|
|
Total
assets
|
$
|
10,712,440
|
|
|
$
|
8,516,783
|
|
|
|
|
|
|
|
Current liabilities
(2)
|
381,497
|
|
|
265,887
|
|
Long-term debt, net
of discount
|
8,987,850
|
|
|
6,576,273
|
|
Deferred
revenue
|
15,500
|
|
|
17,500
|
|
Other liabilities
(2)
|
33,314
|
|
|
17,379
|
|
Total partners'
capital
|
1,294,279
|
|
|
1,639,744
|
|
Total liabilities and
partners' capital
|
$
|
10,712,440
|
|
|
$
|
8,516,783
|
|
|
|
|
(1)
|
Please refer to the
Cheniere Energy Partners, L.P. Quarterly Report on Form 10-Q for
the quarter ended June 30, 2014, filed with the Securities and
Exchange Commission.
|
|
|
(2)
|
Amounts include
transactions between Cheniere Partners and Cheniere Energy, Inc. or
subsidiaries of Cheniere Energy, Inc.
|
SOURCE Cheniere Energy Partners, L.P.