Cheniere Energy Partners, L.P. Reports Fourth Quarter and Full Year 2014 Results

HOUSTON, Feb. 20, 2015 /PRNewswire/ -- Cheniere Energy Partners, L.P. ("Cheniere Partners") (NYSE MKT: CQP) reported a net loss of $70.8 million and $410.0 million for the three months and year ended December 31, 2014, respectively, compared to a net loss of $61.3 million and $258.1 million for the same periods in 2013, respectively. 

Results include significant items consisting of losses of $29.8 million and $242.8 million for the three months and year ended December 31, 2014, respectively, and losses of $26.7 million and $60.9 million, respectively, for the comparable 2013 periods. Significant items for the three months and year ended December 31, 2014 related to development expenses primarily for the fifth and sixth natural gas liquefaction trains ("Trains") 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"), losses on early extinguishment of debt related to the write-off of debt issuance costs by Sabine Pass Liquefaction in connection with the refinancing of a portion of its credit facilities in May 2014 and April 2013, and derivative gains (losses) due primarily to changes in long-term LIBOR during the respective periods.

General and administrative expense (including affiliate) decreased by $0.3 million and $26.2 million for the three months and year ended December 31, 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 is required to pay monthly fees to an affiliate of Cheniere based upon the capital expenditures incurred in the previous month for construction of the first four Trains at the Liquefaction Project.

Liquefaction Project Update

We continue to make progress on the Liquefaction Project, which is being developed for up to six Trains, each with a nominal production capacity of approximately 4.5 million tonnes per annum ("mtpa").

The Trains are in various stages of development.

  • Construction on Trains 1 and 2 began in August 2012, and as of December 31, 2014, the overall project for Trains 1 and 2 was approximately 81% 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 December 31, 2014, the overall project for Trains 3 and 4 was approximately 54% 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 LNG sale and purchase agreements ("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 U.S. 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.  In December 2014, the Federal Energy Regulatory Commission ("FERC") published the final Environmental Assessment, and final FERC authorization is subject to commissioner approvals.

We will contemplate making a final investment decision to commence construction of Train 5 and Train 6 based on, among other things, entering into engineering, procurement and construction ("EPC") contracts, entering into acceptable commercial arrangements, receiving all regulatory approvals and obtaining financing.

Liquefaction Project Timeline










Target Date

Milestone


Trains
1 - 4


Trains
5 & 6

DOE export authorization


Received


Received FTA
Pending Non-FTA

Definitive commercial agreements


Completed

16.0 mtpa


T5: Completed

T6: 2015

- BG Gulf Coast LNG, LLC


5.5 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 contracts


Completed


2015

Financing


Completed


2015

- Equity commitments





- Debt commitments





FERC authorization


Completed



- FERC Order




2015

- Certificate to commence construction




2015

Issue Notice to Proceed


Completed


2015

Commence operations


2015 - 2017


2018/2019

Distributions to Unitholders
We paid a cash distribution per common unit of $0.425 to unitholders of record as of February 2, 2015, and the related general partner distribution on February 15, 2015.

We estimate that the annualized distribution to common unitholders for fiscal year 2015 will be $1.70 per unit.

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 nominal capacity of up to 266,000 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 percentage of Trains 1 and 2 is approximately 81% as of December 31, 2014. The overall project completion percentage of Trains 3 and 4 is approximately 54% as of December 31, 2014. Sabine Pass Liquefaction is developing 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.cheniere.com.

For additional information, please refer to the Cheniere Partners website at www.cheniere.com and Annual Report on Form 10-K for the fiscal year ended December 31, 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 Tables Follow)

 

Cheniere Energy Partners, L.P.

Consolidated Statements of Operations

(in thousands, except per unit data) (1)






Three Months Ended


Year Ended


December 31,


December 31,


2014



2013



2014



2013


Revenues












Revenues

$

65,807



$

66,199



$

265,740



$

265,251


Revenues—affiliate

752



800



2,958



2,940


Total revenues

66,559



66,999



268,698



268,191














Operating costs and expenses












Operating and maintenance expense

9,522



7,206



64,208



59,957


Operating and maintenance expense—affiliate

6,808



5,770



21,115



29,304


Depreciation expense

14,780



14,336



58,601



57,486


Development expense

648



3,165



9,319



11,322


Development expense—affiliate

430



207



1,153



1,402


General and administrative expense

3,759



3,049



13,807



11,570


General and administrative expense—affiliate

26,790



27,838



101,369



129,836


Total operating costs and expenses

62,737



61,571



269,572



300,877














Income (loss) from operations

3,822



5,428



(874)



(32,686)














Other income (expense)












Interest expense, net

(46,089)



(43,594)



(177,032)



(178,400)


Loss on early extinguishment of debt



(51,066)



(114,335)



(131,576)


Derivative gain (loss), net

(28,726)



27,742



(118,012)



83,448


Other income

154



224



217



1,097


Total other expense

(74,661)



(66,694)



(409,162)



(225,431)














Net loss

$

(70,839)



$

(61,266)



$

(410,036)



$

(258,117)














Net loss attributable to the Creole Trail Pipeline Business







(18,150)


Net loss attributable to partners

$

(70,839)



$

(61,266)



$

(410,036)



$

(239,967)














Basic and diluted net loss per common unit

$

(0.06)



$

(0.01)



$

(0.89)



$

(0.03)














Weighted average number of common units outstanding used for basic and diluted net loss per common unit calculation

57,080



57,079



57,079



54,235


 

 

Cheniere Energy Partners, L.P.

Consolidated Balance Sheets

(in thousands, except per unit data) (1)



December 31,


2014



2013

ASSETS





Current assets





Cash and cash equivalents

$

248,830



$

351,032

Restricted cash and cash equivalents

195,702



227,652

Accounts receivable

310



40

Advances to affiliate

27,323



14,737

LNG inventory

4,293



10,430

Prepaid expenses and other

6,411



5,957

Other—affiliate

3,651



3,280

Total current assets

486,520



613,128






Non-current restricted cash and cash equivalents

544,465



1,025,056

Property, plant and equipment, net

8,978,356



6,383,939

Debt issuance costs, net

241,909



313,944

Non-current derivative assets

11,744



98,123

Other non-current assets

124,521



82,593

Total assets

$

10,387,515



$

8,516,783






LIABILITIES AND PARTNERS' EQUITY





Current liabilities





Accounts payable

$

8,598



$

10,146

Accrued liabilities

136,578



170,052

Due to affiliates

19,660



45,547

Deferred revenue

26,655



26,593

Derivative liabilities

23,247



13,484

Other

18



65

Total current liabilities

214,756



265,887






Long-term debt, net

8,991,333



6,576,273

Non-current deferred revenue

13,500



17,500

Other non-current liabilities

2,452



193

Other non-current liabilities—affiliate

34,745



17,186






Commitments and contingencies










Partners' equity





Common unitholders' interest (57.1 million units issued and outstanding at December 31, 2014 and 2013)

495,597



711,771

Class B unitholders' interest (145.3 million units issued and outstanding at December 31, 2014 and 2013)

(38,216)



(38,216)

Subordinated unitholders' interest (135.4 million units issued and outstanding at December 31, 2014 and 2013)

648,414



931,074

General partner's interest (2% interest with 6.9 million units issued and outstanding at December 31, 2014 and 2013)

24,934



35,115

Total partners' equity

1,130,729



1,639,744

Total liabilities and partners' equity

$

10,387,515



$

8,516,783



(1)

Please refer to the Cheniere Energy Partners, L.P. Annual Report on Form 10-K for the fiscal year ended December 31, 2014, filed with the Securities and Exchange Commission.

 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/cheniere-energy-partners-lp-reports-fourth-quarter-and-full-year-2014-results-300038902.html

SOURCE Cheniere Energy Partners, L.P.