HOUSTON, Nov. 3, 2016
/PRNewswire/ -- Cheniere Energy Partners, L.P. ("Cheniere
Partners") (NYSE MKT: CQP) reported a net loss of $81.5 million and $256.5
million for the three and nine months ended September 30, 2016, respectively, compared to a
net loss of $24.1 million and
$262.9 million for the same periods
in 2015, respectively. Adjusted EBITDA1 for the
three and nine months ended September 30,
2016 was $100.3 million and
$163.5 million, respectively,
compared to $20.2 million and
$37.9 million for the comparable 2015
periods, respectively.
During the three months ended September
30, 2016, Train 2 of the Sabine Pass Liquefaction Project
(defined below) achieved substantial completion. Prior to
substantial completion, amounts received from the sale of
commissioning cargoes were offset against LNG terminal
construction-in-process because these amounts were earned during
the testing phase for the construction of Trains 1 and 2 of the
Sabine Pass Liquefaction Project. We expect sales of LNG cargoes
from future liquefaction trains ("Trains") to be reported in the
same manner. During the three months ended September 30, 2016, a total of 18 cargoes were
loaded and exported from the Sabine Pass Liquefaction Project, 3 of
which were Train 2 commissioning cargoes.
Total operating costs and expenses increased $251.9 million and $317.6
million during the three and nine months ended September 30, 2016 compared to the three and nine
months ended September 30, 2015,
respectively, generally as a result of the commencement of
operations of Train 1 and Train 2 of the Sabine Pass Liquefaction
Project in May and September 2016,
respectively. Depreciation and amortization expense increased
during the three and nine months ended September 30, 2016 as we began depreciation of
our assets related to Train 1 and Train 2 of the Sabine Pass
Liquefaction Project upon reaching substantial completion. General
and administrative expense-affiliate decreased during the three and
nine months ended September 30, 2016,
partially due to a decrease in the amount payable under our service
agreements with affiliates and partially due to a reallocation of
resources from general and administrative activities to operating
and maintenance activities following commencement of operations at
the Sabine Pass Liquefaction Project.
For the three and nine months ended September 30, 2016, Adjusted EBITDA excludes the
impact of loss on early extinguishment of debt associated with the
write-off of debt issuance costs by Sabine Pass Liquefaction, LLC
("SPL") in connection with the refinancing of a portion of its
credit facilities and by Cheniere Creole Trail Pipeline, L.P. as a
result of the prepayment of its outstanding term loan, derivative
loss (gain) primarily as a result of changes in the forward LIBOR
curve over the period as well as an increase in the notional amount
of interest rate swaps related to our new credit facilities entered
into in February 2016, and changes in
the fair value of commodity derivatives. For the three and nine
months ended September 30, 2015,
Adjusted EBITDA excludes the impact of losses on early
extinguishment of debt related primarily to the write-off of debt
issuance costs by SPL in connection with the refinancing of a
portion of its credit facilities, derivative loss due primarily to
the termination of certain interest rate derivatives, and changes
in the fair value of commodity derivatives.
Third Quarter 2016 Highlights
- In September 2016, Cheniere
Partners announced that Train 2 of the Sabine Pass Liquefaction
Project achieved substantial completion.
- In September 2016, commissioning
activities commenced on Train 3 of the Sabine Pass Liquefaction
Project.
- In September 2016, SPL issued an
aggregate principal amount of $1.5
billion of 5.00% Senior Secured Notes due 2027. Net proceeds
from the offering were used to prepay all of the principal amounts
outstanding under SPL's credit facilities and are being used to pay
a portion of the capital costs in connection with the construction
of the Sabine Pass Liquefaction Project.
Sabine Pass Liquefaction Project Update
We are developing up to six Trains, each with an expected
nominal production capacity of approximately 4.5 million tonnes per
annum ("mtpa") of LNG, at the Sabine Pass LNG terminal adjacent to
the existing regasification facilities (the "Sabine Pass
Liquefaction Project").
The Trains are in various stages of operation, construction, and
development.
- Construction on Trains 1 and 2 began in August 2012 and substantial completion was
achieved in May 2016 and September 2016, respectively. Substantial
completion is achieved upon the completion of construction,
commissioning and the satisfaction of certain tests.
- Construction on Trains 3 and 4 began in May 2013, and as of September 30, 2016, the
overall project completion percentage for Trains 3 and 4 was
approximately 91.8%, which is ahead of the contractual schedule. In
September 2016, commissioning
activities commenced on Train 3. Based on the current
construction schedule, we expect Trains 3 and 4 to reach
substantial completion in 2017.
- Construction on Train 5 began in June
2015, and as of September 30, 2016, the overall project
completion percentage for Train 5 was approximately 42.8%, which is
ahead of the contractual schedule. Engineering, procurement,
subcontract work and construction were approximately 90.8%, 62.0%,
41.9% and 4.6% complete, respectively. Based on the current
construction schedule, we expect Train 5 to reach substantial
completion in 2019.
- Train 6 is currently under development, with all necessary
regulatory approvals in place. We expect to make a final investment
decision and commence construction on Train 6 upon, among other
things, entering into an engineering, procurement, and construction
contract, entering into acceptable commercial arrangements, and
obtaining adequate financing.
|
Sabine Pass
Liquefaction Project
|
Liquefaction
Train
|
Train
1
|
Train
2
|
Trains
3-4
|
Train
5
|
Project
Status
|
Operational
|
Operational
|
92% Overall
Completion
|
43% Overall
Completion
|
Expected Substantial
Completion
|
-
|
-
|
2017
|
2019
|
Recent Developments
- In October 2016, the previously
announced planned outage to improve performance of the flare
systems at the Sabine Pass Liquefaction Project, as well as to
perform scheduled maintenance to Train 1 and other facilities, was
completed on schedule and budget.
- In October 2016, Sabine Pass LNG,
L.P. ("SPLNG") issued a notice of redemption to redeem all of its
outstanding $420 million in aggregate
principal amount of 6.50% Senior Secured Notes due 2020 (the "2020
Notes") on November 30, 2016 (the
"Redemption Date"). Concurrently, SPLNG intends to repay all of its
outstanding $1,665.0 million in
aggregate principal amount of 7.50% Senior Secured Notes due 2016
(the "2016 Notes"), which mature on the Redemption Date. Subsequent
to the redemption of the 2020 Notes and the repayment of the 2016
Notes, there will be no debt maturity in the Cheniere Partners
complex until 2020.
Distributions to Unitholders
We will pay a cash distribution per common unit of $0.425 to unitholders of record as of
November 1, 2016, and the related general partner distribution
on November 11, 2016.
We estimate that the annualized distribution to common
unitholders for fiscal year 2016 will be $1.70 per unit.
Investor Conference Call and Webcast
Cheniere Energy, Inc. will host a conference call to discuss its
financial and operating results for the third quarter on
Thursday, November 3, 2016, at
11 a.m. Eastern time / 10 a.m. Central time. A listen-only webcast of
the call and an accompanying slide presentation may be accessed
through our website at www.cheniere.com. Following the call, an
archived recording will be made available on our website. The call
and accompanying slide presentation may include financial and
operating results or other information regarding Cheniere
Partners.
About Cheniere Partners
Through its wholly owned subsidiary, Sabine Pass LNG, L.P.,
Cheniere Partners owns 100% of the Sabine Pass LNG terminal located
in Cameron Parish, Louisiana, on
the Sabine-Neches Waterway 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 marine
berths that can accommodate vessels with nominal capacity of up to
266,000 cubic meters and vaporizers with regasification capacity of
approximately 4.0 Bcf/d. Through its wholly owned subsidiary,
Cheniere Creole Trail Pipeline, L.P., Cheniere Partners also owns a
94-mile pipeline that interconnects the Sabine Pass LNG terminal
with a number of large interstate pipelines.
Cheniere Partners, through its subsidiary, SPL, is developing
and constructing natural gas liquefaction facilities at the Sabine
Pass LNG terminal adjacent to the existing regasification
facilities. Cheniere Partners, through SPL, plans to construct over
time up to six liquefaction trains, which are in various stages of
development and construction. Trains 1 and 2 have commenced
commercial operations, Train 3 is undergoing commissioning, Trains
4 and 5 are under construction and Train 6 is fully
permitted. Each liquefaction train is expected to have a
nominal production capacity of approximately 4.5 mtpa of LNG. SPL
has entered into six third-party LNG sale and purchase agreements
("SPAs") that in the aggregate equate to approximately 19.75 mtpa
of LNG and commence with the date of first commercial delivery of
Trains 1 through 5 as specified in the respective SPAs.
For additional information, please refer to the Cheniere
Partners website at www.cheniere.com and Quarterly Report on Form
10-Q for the quarter ended September 30, 2016, filed with the
Securities and Exchange Commission.
Forward-Looking Statements
This press release contains certain statements that may include
"forward-looking statements." 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 Partners' business
strategy, plans and objectives, including the development,
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.
|
Consolidated
Statements of Operations
|
(in thousands,
except per unit data) (1)
|
(unaudited)
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Revenues
|
|
|
|
|
|
|
|
Regasification
revenues
|
$
|
66,262
|
|
|
$
|
66,596
|
|
|
$
|
196,768
|
|
|
$
|
199,804
|
|
Regasification
revenues—affiliate
|
716
|
|
|
941
|
|
|
3,068
|
|
|
2,952
|
|
LNG
revenues
|
248,195
|
|
|
—
|
|
|
333,555
|
|
|
—
|
|
LNG
revenues—affiliate
|
16,236
|
|
|
—
|
|
|
16,236
|
|
|
—
|
|
Total
revenues
|
331,409
|
|
|
67,537
|
|
|
549,627
|
|
|
202,756
|
|
|
|
|
|
|
|
|
|
Operating costs and
expenses
|
|
|
|
|
|
|
|
Cost (cost recovery)
of sales (excluding depreciation and amortization expense shown
separately below)
|
158,663
|
|
|
(31,774)
|
|
|
211,861
|
|
|
(30,990)
|
|
Cost of
sales—affiliate
|
1,430
|
|
|
—
|
|
|
1,430
|
|
|
—
|
|
Operating and
maintenance expense
|
37,613
|
|
|
8,992
|
|
|
79,556
|
|
|
48,830
|
|
Operating and
maintenance expense—affiliate
|
13,756
|
|
|
8,081
|
|
|
35,901
|
|
|
20,355
|
|
Development
expense
|
1
|
|
|
113
|
|
|
137
|
|
|
2,631
|
|
Development
expense—affiliate
|
87
|
|
|
152
|
|
|
369
|
|
|
562
|
|
General and
administrative expense
|
2,978
|
|
|
3,673
|
|
|
9,378
|
|
|
11,269
|
|
General and
administrative expense—affiliate
|
24,454
|
|
|
25,692
|
|
|
67,865
|
|
|
80,761
|
|
Depreciation and
amortization expense
|
44,529
|
|
|
16,687
|
|
|
92,101
|
|
|
47,557
|
|
Total operating costs
and expenses
|
283,511
|
|
|
31,616
|
|
|
498,598
|
|
|
180,975
|
|
|
|
|
|
|
|
|
|
Income from
operations
|
47,898
|
|
|
35,921
|
|
|
51,029
|
|
|
21,781
|
|
|
|
|
|
|
|
|
|
Other income
(expense)
|
|
|
|
|
|
|
|
Interest expense, net
of capitalized interest
|
(113,227)
|
|
|
(49,360)
|
|
|
(228,678)
|
|
|
(142,353)
|
|
Loss on early
extinguishment of debt
|
(25,765)
|
|
|
—
|
|
|
(53,526)
|
|
|
(96,273)
|
|
Derivative gain
(loss), net
|
9,183
|
|
|
(10,872)
|
|
|
(26,417)
|
|
|
(46,541)
|
|
Other
income
|
402
|
|
|
179
|
|
|
1,052
|
|
|
535
|
|
Total other
expense
|
(129,407)
|
|
|
(60,053)
|
|
|
(307,569)
|
|
|
(284,632)
|
|
|
|
|
|
|
|
|
|
Net loss
|
$
|
(81,509)
|
|
|
$
|
(24,132)
|
|
|
$
|
(256,540)
|
|
|
$
|
(262,851)
|
|
|
|
|
|
|
|
|
|
Basic and diluted net
income (loss) per common unit
|
$
|
(0.27)
|
|
|
$
|
0.18
|
|
|
$
|
(0.56)
|
|
|
$
|
(0.44)
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common units outstanding used for basic and diluted net
income (loss) per common unit calculation
|
57,086
|
|
|
57,081
|
|
|
57,085
|
|
|
57,081
|
|
(1)
|
Please refer to the
Cheniere Energy Partners, L.P. Quarterly Report on Form 10-Q for
the quarter ended September 30, 2016, filed with the
Securities and Exchange Commission.
|
Cheniere Energy
Partners, L.P.
|
Consolidated
Balance Sheets
|
(in thousands,
except per unit data) (1)
|
|
|
September
30,
|
|
December
31,
|
|
2016
|
|
2015
|
ASSETS
|
(unaudited)
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
|
12,469
|
|
|
$
|
146,221
|
|
Restricted
cash
|
568,549
|
|
|
274,557
|
|
Accounts and other
receivables
|
51,006
|
|
|
741
|
|
Accounts
receivable—affiliate
|
56,739
|
|
|
1,271
|
|
Advances to
affiliate
|
42,925
|
|
|
39,836
|
|
Inventory
|
60,520
|
|
|
16,667
|
|
Other current
assets
|
16,184
|
|
|
14,182
|
|
Total current
assets
|
808,392
|
|
|
493,475
|
|
|
|
|
|
Non-current
restricted cash
|
13,650
|
|
|
13,650
|
|
Property, plant and
equipment, net
|
13,788,657
|
|
|
11,931,602
|
|
Debt issuance costs,
net
|
103,728
|
|
|
132,091
|
|
Non-current
derivative assets
|
11,247
|
|
|
30,304
|
|
Other non-current
assets
|
216,919
|
|
|
232,031
|
|
Total
assets
|
$
|
14,942,593
|
|
|
$
|
12,833,153
|
|
|
|
|
|
LIABILITIES AND
PARTNERS' EQUITY
|
|
|
|
Current
liabilities
|
|
|
|
Accounts
payable
|
$
|
20,333
|
|
|
$
|
16,407
|
|
Accrued
liabilities
|
387,348
|
|
|
224,292
|
|
Current debt,
net
|
1,762,704
|
|
|
1,673,379
|
|
Due to
affiliates
|
101,556
|
|
|
115,123
|
|
Deferred
revenue
|
26,709
|
|
|
26,669
|
|
Deferred
revenue—affiliate
|
717
|
|
|
717
|
|
Derivative
liabilities
|
12,707
|
|
|
6,430
|
|
Other current
liabilities
|
263
|
|
|
—
|
|
Total current
liabilities
|
2,312,337
|
|
|
2,063,017
|
|
|
|
|
|
Long-term debt,
net
|
12,195,743
|
|
|
10,018,325
|
|
Non-current deferred
revenue
|
6,500
|
|
|
9,500
|
|
Non-current
derivative liabilities
|
16,501
|
|
|
2,884
|
|
Other non-current
liabilities
|
167
|
|
|
175
|
|
Other non-current
liabilities—affiliate
|
29,083
|
|
|
26,321
|
|
|
|
|
|
Partners'
equity
|
|
|
|
Common unitholders'
interest (57.1 million units issued and outstanding at
September 30, 2016 and December 31, 2015)
|
149,958
|
|
|
305,747
|
|
Class B unitholders'
interest (145.3 million units issued and outstanding at September
30, 2016 and December 31, 2015)
|
(8,525)
|
|
|
(37,429)
|
|
Subordinated
unitholders' interest (135.4 million units issued and outstanding
at September 30, 2016 and December 31, 2015)
|
230,864
|
|
|
428,035
|
|
General partner's
interest (2% interest with 6.9 million units issued and outstanding
at September 30, 2016 and December 31, 2015)
|
9,965
|
|
|
16,578
|
|
Total partners'
equity
|
382,262
|
|
|
712,931
|
|
Total liabilities and
partners' equity
|
$
|
14,942,593
|
|
|
$
|
12,833,153
|
|
(1)
|
Please refer to the
Cheniere Energy Partners, L.P. Quarterly Report on Form 10-Q for
the quarter ended September 30, 2016, filed with the
Securities and Exchange Commission.
|
Reconciliation of Non-GAAP Measures
Regulation G Reconciliation
In addition to disclosing financial results in accordance with
U.S. GAAP, the accompanying news release contains a non-GAAP
financial measure. Adjusted EBITDA is a non-GAAP financial measure
that is used to facilitate comparisons of operating performance
across periods. This non-GAAP measure should be viewed as a
supplement to and not a substitute for our U.S. GAAP measures of
performance and the financial results calculated in accordance with
U.S. GAAP, and the reconciliation from these results should be
carefully evaluated.
Adjusted EBITDA is calculated by taking net loss before interest
expense, net of capitalized interest, changes in the fair value and
settlement of our interest rate derivatives, taxes, depreciation
and amortization, and adjusting for the effects of certain non-cash
items, other non-operating income or expense items and other items
not otherwise predictive or indicative of ongoing operating
performance, including the effects of modification or
extinguishment of debt, changes in the fair value of our commodity
derivatives and other income. Adjusted EBITDA is not intended to
represent cash flows from operations or net loss as defined by U.S.
GAAP and is not necessarily comparable to similarly titled measures
reported by other companies.
We believe Adjusted EBITDA provides relevant and useful
information to management, investors and other users of our
financial information in evaluating the effectiveness of our
operating performance in a manner that is consistent with
management's evaluation of business performance. Management
believes Adjusted EBITDA is widely used by investors to measure a
company's operating performance without regard to items such as
interest expense, taxes, depreciation and amortization which vary
substantially from company to company depending on capital
structure, the method by which assets were acquired and
depreciation policies. Further, the exclusion of certain non-cash
items, other non-operating income or expense items and other items
not otherwise predictive or indicative of ongoing operating
performance enables comparability to prior period performance and
trend analysis.
Adjusted EBITDA
The following table reconciles our Adjusted EBITDA to U.S. GAAP
results for the three and nine months ended September 30, 2016 and 2015 (in thousands):
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Net loss
|
(81,509)
|
|
|
(24,132)
|
|
|
(256,540)
|
|
|
(262,851)
|
|
Interest expense, net
of capitalized interest
|
113,227
|
|
|
49,360
|
|
|
228,678
|
|
|
142,353
|
|
Loss on early
extinguishment of debt
|
25,765
|
|
|
—
|
|
|
53,526
|
|
|
96,273
|
|
Derivative loss
(gain), net
|
(9,183)
|
|
|
10,872
|
|
|
26,417
|
|
|
46,541
|
|
Other
income
|
(402)
|
|
|
(179)
|
|
|
(1,052)
|
|
|
(535)
|
|
Income from
operations
|
47,898
|
|
|
35,921
|
|
|
51,029
|
|
|
21,781
|
|
Adjustments to
reconcile income (loss) from operations to Adjusted
EBITDA:
|
|
|
|
|
|
|
|
Depreciation and
amortization expense
|
44,529
|
|
|
16,687
|
|
|
92,101
|
|
|
47,557
|
|
Loss (gain) from
changes in fair value of commodity derivatives, net
|
7,865
|
|
|
(32,422)
|
|
|
20,406
|
|
|
(31,458)
|
|
Adjusted
EBITDA
|
100,292
|
|
|
20,186
|
|
|
163,536
|
|
|
37,880
|
|
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visit:http://www.prnewswire.com/news-releases/cheniere-energy-partners-lp-reports-third-quarter-2016-results-300356735.html
SOURCE Cheniere Energy Partners, L.P.