Cheniere Energy Partners, L.P. (“Cheniere Partners”) (NYSE
American: CQP) today announced its financial results for first
quarter 2022.
HIGHLIGHTS
- Net income of $159 million for the first quarter 2022.
- Adjusted EBITDA1 of $1.0 billion for the first quarter
2022.
- Declared a cash distribution of $1.050 per common unit to
unitholders of record as of May 5, 2022, comprised of a base amount
equal to $0.775 and a variable amount equal to $0.275. The common
unit distribution and the related general partner distribution will
be paid on May 13, 2022.
- Reconfirming full year 2022 distribution guidance of $4.00 -
$4.25 per common unit.
- In February 2022, in connection with a prior commitment by
Cheniere Energy, Inc. (“Cheniere”) to collateralize financing for
Train 6 of the SPL Project (defined below), our Board of Directors
approved the entry by Sabine Pass Liquefaction, LLC (“SPL”) into
agreements to novate from subsidiaries of Cheniere (i) two sale and
purchase agreements (“SPAs”) entered into with ENN LNG (Singapore)
Pte Ltd. and a subsidiary of Glencore plc, representing
approximately 21 million tonnes of LNG to be delivered between 2023
and 2035 in aggregate, and (ii) an Integrated Production Marketing
(“IPM”) agreement between Cheniere Corpus Christi Liquefaction
Stage III, LLC and Tourmaline Oil Marketing Corp. (“Tourmaline”), a
subsidiary of Tourmaline Oil Corp., under which SPL will purchase
approximately 140,000 MMBtu per day of natural gas from Tourmaline
at a price based on the Platts Japan Korea Marker (“JKM”), for a
term of approximately 15 years beginning in early 2023. The
assignment of the IPM agreement with Tourmaline was approved by our
Board of Directors in conjunction with approval of a free on board
SPA with Cheniere Marketing International LLP to sell LNG
associated with the natural gas to be supplied under the assigned
IPM agreement.
- In March 2022, the Federal Energy Regulatory Commission
(“FERC”) and the U.S. Department of Transportation’s Pipeline and
Hazardous Materials Safety Administration (“PHMSA”) jointly
provided SPL with conditional approval to recommission, cooldown
and place LNG Tank 1 in-service.
- In March 2022, the U.S. Department of Energy (“DOE”) issued a
long-term order to SPL authorizing additional LNG exports to any
country with which the United States has not entered into a free
trade agreement. The total approved export volume increased to
1,661.94 billion cubic feet per year at the SPL Project. This
authorization follows an order issued by the FERC in October 2021,
which authorized increased production capacity at the Sabine Pass
facility.
2022 FULL YEAR DISTRIBUTION
GUIDANCE
2022
Distribution per Unit
$
4.00
-
$
4.25
SUMMARY AND REVIEW OF FINANCIAL
RESULTS
(in millions, except LNG data)
Three Months Ended March
31,
2022
2021
% Change
Revenues
$
3,328
$
1,963
70
%
Net income
$
159
$
347
(54
) %
Adjusted EBITDA1
$
1,031
$
779
32
%
LNG exported:
Number of cargoes
105
89
18
%
Volumes (TBtu)
384
321
20
%
LNG volumes loaded (TBtu)
385
317
21
%
Net income decreased $188 million while Adjusted EBITDA1
increased $252 million during first quarter 2022 as compared to the
corresponding 2021 period. The decrease in net income was primarily
due to an increase in unrealized losses from changes in fair value
of commodity derivatives, due primarily to instruments indexed to
international LNG prices related to the Tourmaline IPM agreement at
SPL, and partially offset by increased margins per MMBtu of LNG and
increased volumes of LNG delivered.
During the quarter, we recognized in income 372 TBtu of LNG
loaded from the SPL Project. During the first quarter,
approximately 13 TBtu of commissioning LNG was exported from the
SPL Project.
BALANCE SHEET MANAGEMENT
Capital Resources
As of March 31, 2022, our total liquidity position was
approximately $2.9 billion. We had cash and cash equivalents of
$1.2 billion. In addition, we had current restricted cash and cash
equivalents of $136 million, $750 million of available commitments
under our 2019 CQP Credit Facilities, and $832 million of available
commitments under the SPL Working Capital Facility.
KEY FINANCIAL TRANSACTIONS
In February 2022, we announced the initiation of quarterly
distributions to be comprised of a base amount plus a variable
amount, which began with the distribution related to the first
quarter of 2022. The common unit distribution with respect to the
first quarter of 2022 is comprised of a base amount equal to $0.775
($3.10 annualized), and a variable amount equal to the remaining
available cash per unit, or $0.275, which takes into consideration,
among other things, amounts reserved for annual debt repayment and
capital allocation goals, anticipated capital expenditures to be
funded with cash, and cash reserves to provide for the proper
conduct of the business.
SPL PROJECT OVERVIEW
We own natural gas liquefaction facilities consisting of six
operational liquefaction Trains, with a total production capacity
of approximately 30 million tonnes per annum (“mtpa”) of LNG at the
Sabine Pass LNG terminal in Cameron Parish, Louisiana (the “SPL
Project”). On February 4, 2022, Train 6 of the SPL Project reached
substantial completion.
As of April 30, 2022, over 1,600 cumulative LNG cargoes totaling
over 110 million tonnes of LNG have been produced, loaded, and
exported from the SPL Project.
DISTRIBUTIONS TO UNITHOLDERS
We declared a cash distribution of $1.050 per common unit to
unitholders of record as of May 5, 2022, comprised of a base amount
equal to $0.775 and a variable amount equal to $0.275. The common
unit distribution and the related general partner distribution will
be paid on May 13, 2022.
INVESTOR CONFERENCE CALL AND WEBCAST
Cheniere Energy, Inc. (“Cheniere”) will host a conference call
to discuss its financial and operating results for first quarter
2022 on Wednesday, May 4, 2022, 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.
___________________________ 1 Non-GAAP financial measure. See
“Reconciliation of Non-GAAP Measures” for further details.
About Cheniere Partners
Cheniere Partners owns the Sabine Pass LNG terminal located in
Cameron Parish, Louisiana, which has natural gas liquefaction
facilities consisting of six operational liquefaction Trains with a
total production capacity of approximately 30 mtpa of LNG. The
Sabine Pass LNG terminal also has operational regasification
facilities that include five LNG storage tanks, vaporizers, and two
marine berths with a third marine berth under construction.
Cheniere Partners also owns the Creole Trail Pipeline, which
interconnects the Sabine Pass LNG terminal with a number of large
interstate pipelines.
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 March 31, 2022, filed with the
Securities and Exchange Commission.
Use of Non-GAAP Financial Measures
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.
Forward-Looking Statements
This press release contains certain statements that may include
“forward-looking statements.” All statements, other than statements
of historical or present facts or conditions, included herein are
“forward-looking statements.” Included among “forward-looking
statements” are, among other things, (i) statements regarding
Cheniere Partners’ financial and operational guidance, business
strategy, plans and objectives, including the development,
construction and operation of liquefaction facilities, (ii)
statements regarding Cheniere Partners’ anticipated quarterly
distributions and ability to make quarterly distributions at the
base amount or any amount, (iii) statements regarding regulatory
authorization and approval expectations, (iv) statements expressing
beliefs and expectations regarding the development of Cheniere
Partners’ LNG terminal and liquefaction business, (v) statements
regarding the business operations and prospects of third-parties,
(vi) statements regarding potential financing arrangements, (vii)
statements regarding future discussions and entry into contracts,
and (viii) statements regarding the COVID-19 pandemic and its
impact on our business and operating results. 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 Tables Follow)
Cheniere Energy Partners,
L.P.
Consolidated Statements of
Income
(in millions, except per unit
data)(1)
(unaudited)
Three Months Ended
March 31,
2022
2021
Revenues
LNG revenues
$
2,488
$
1,669
LNG revenues—affiliate
757
214
Regasification revenues
68
67
Other revenues
15
13
Total revenues
3,328
1,963
Operating costs and expenses
Cost of sales (excluding items shown
separately below)
2,562
948
Cost of sales—affiliate
5
42
Operating and maintenance expense
170
149
Operating and maintenance
expense—affiliate
38
34
Operating and maintenance expense—related
party
12
10
General and administrative expense
3
2
General and administrative
expense—affiliate
23
21
Depreciation and amortization expense
153
139
Total operating costs and expenses
2,966
1,345
Income from operations
362
618
Other expense
Interest expense, net of capitalized
interest
(203
)
(217
)
Loss on modification or extinguishment of
debt
—
(54
)
Total other expense
(203
)
(271
)
Net income
$
159
$
347
Basic and diluted net income (loss) per
common unit
$
(0.11
)
$
0.64
Weighted average number of common units
outstanding used for basic and diluted net income (loss) per common
unit calculation
484.0
484.0
_________________________
(1) Please refer to the Cheniere Energy Partners, L.P. Quarterly
Report on Form 10-Q for the quarter ended March 31, 2022, filed
with the Securities and Exchange Commission.
Cheniere Energy Partners,
L.P.
Consolidated Balance
Sheets
(in millions, except unit
data) (1)
March 31,
December 31,
2022
2021
ASSETS
(unaudited)
Current assets
Cash and cash equivalents
$
1,156
$
876
Restricted cash and cash equivalents
136
98
Trade and other receivables, net of
current expected credit losses
434
580
Accounts receivable—affiliate
290
232
Accounts receivable—related party
—
1
Advances to affiliate
150
141
Inventory
149
176
Current derivative assets
24
21
Other current assets
93
87
Other current assets—affiliate
2
—
Total current assets
2,434
2,212
Property, plant and equipment, net of
accumulated depreciation
16,915
16,830
Operating lease assets
96
98
Debt issuance costs, net of accumulated
amortization
11
12
Derivative assets
30
33
Other non-current assets, net
172
173
Total assets
$
19,658
$
19,358
LIABILITIES AND PARTNERS' EQUITY
(DEFICIT)
Current liabilities
Accounts payable
$
24
$
21
Accrued liabilities
1,159
1,073
Accrued liabilities—related party
5
4
Due to affiliates
32
67
Deferred revenue
116
155
Deferred revenue—affiliate
—
1
Current operating lease liabilities
8
8
Current derivative liabilities
256
16
Total current liabilities
1,600
1,345
Long-term debt, net of premium, discount
and debt issuance costs
17,184
17,177
Operating lease liabilities
87
89
Derivative liabilities
2,999
11
Other non-current
liabilities—affiliate
18
18
Partners' equity (deficit)
Common unitholders’ interest (484.0
million units issued and outstanding at both March 31, 2022 and
December 31, 2021)
(1870
)
1,024
General partner’s interest (2% interest
with 9.9 million units issued and outstanding at March 31, 2022 and
December 31, 2021)
(360
)
(306
)
Total partners' equity (deficit)
(2,230
)
718
Total liabilities and partners' equity
(deficit)
$
19,658
$
19,358
________________________ (1) Please refer to the Cheniere Energy
Partners, L.P. Quarterly Report on Form 10-Q for the quarter ended
March 31, 2022, filed with the Securities and Exchange Commission.
Reconciliation of Non-GAAP
Measures
Regulation G
Reconciliations
Adjusted EBITDA
The following table reconciles our
Adjusted EBITDA to U.S. GAAP results for the three months ended
March 31, 2022 and 2021 (in millions):
Three Months Ended March
31,
2022
2021
Net income
$
159
$
347
Interest expense, net of capitalized
interest
203
217
Loss on modification or extinguishment of
debt
—
54
Income from operations
$
362
$
618
Adjustments to reconcile income from
operations to Adjusted EBITDA:
Depreciation and amortization expense
153
139
Loss from changes in fair value of
commodity derivatives, net (1)
516
22
Adjusted EBITDA
$
1,031
$
779
_______________________
(1) Change in fair value of commodity
derivatives prior to contractual delivery or termination
Adjusted EBITDA is commonly used as a supplemental financial
measure by our management and external users of our Consolidated
Financial Statements to assess the financial performance of our
assets without regard to financing methods, capital structures, or
historical cost basis. Adjusted EBITDA is not intended to represent
cash flows from operations or net income 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 financial and operating performance.
Adjusted EBITDA is calculated by taking net income before
interest expense, net of capitalized interest, 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, impairment expense and loss on disposal of
assets, and changes in the fair value of our commodity derivatives
prior to contractual delivery or termination. The change in fair
value of commodity derivatives is considered in determining
Adjusted EBITDA given that the timing of recognizing gains and
losses on these derivative contracts differs from the recognition
of the related item economically hedged. We believe the exclusion
of these items enables investors and other users of our financial
information to assess our sequential and year-over-year performance
and operating trends on a more comparable basis and is consistent
with management’s own evaluation of performance.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220503005913/en/
Cheniere Partners Investors Randy
Bhatia 713-375-5479 Frances Smith 713-375-5753 Media Relations Eben Burnham-Snyder 713-375-5764
Phil West 713-375-5586
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