Press Releases

Cheniere Energy Partners, L.P. NYSE American: CQP

Cheniere Energy Partners, L.P. Reports Second Quarter 2015 Results

HOUSTON, July 30, 2015 /PRNewswire/ -- Cheniere Energy Partners, L.P. ("Cheniere Partners") (NYSE MKT: CQP) reported a net loss of $60.0 million and  $238.7 million for the three and six months ended June 30, 2015, respectively, compared to a net loss of $226.2 million and $296.0 million for the same periods in 2014, respectively. 

Significant items for the three and six months ended June 30, 2015 were a loss of $7.7 million and $134.4 million, respectively, compared to a loss of $178.5 million and $216.9 million for the comparable 2014 periods, respectively. Significant items for the three and six months ended June 30, 2015 related to losses on early extinguishment of debt related primarily to 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, derivative gains (losses) due primarily to the termination of certain interest rate derivatives, and development expenses primarily for the fifth and sixth natural gas liquefaction trains ("Trains") we are developing through SPL at the Sabine Pass LNG terminal adjacent to the existing regasification facilities (the "Sabine Pass Liquefaction Project").

General and administrative expense (including affiliate) increased by $10.3 million and $4.9 million for the three and six months ended June 30, 2015, respectively, compared to the corresponding 2014 periods, primarily due to an increase in management fees incurred under certain management service agreements with wholly owned subsidiaries of Cheniere Energy, Inc. ("Cheniere"). SPL 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 five Trains at the Sabine Pass Liquefaction Project. Operating and maintenance expense (including affiliate) decreased by $12.5 million and increased by $10.6 million for the three and six months ended June 30, 2015, respectively, compared to the corresponding 2014 periods, primarily due to timing of costs incurred in order to maintain the cryogenic readiness of the regasification facilities at the Sabine Pass LNG terminal.

Recent Significant Events

  • In June 2015, SPL made a positive final investment decision and issued a notice to proceed with construction to Bechtel Oil, Gas and Chemicals, Inc. for Train 5 of the Sabine Pass Liquefaction Project.
  • In connection with the commencement of construction on Train 5, SPL entered into four credit facilities totaling $4.6 billion, which replaced its existing credit facilities, to fund a portion of the costs of developing, constructing, and placing into operation Trains 1 through 5 of the Sabine Pass Liquefaction Project.

Sabine Pass Liquefaction Project Update

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

The Trains are in various stages of development:

  • Construction on Trains 1 and 2 began in August 2012, and as of June 30, 2015, the overall project completion percentage for Trains 1 and 2 was approximately 92.2%, 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, 2015, the overall project completion percentage for Trains 3 and 4 was approximately 69.2%, which is ahead of the contractual schedule. We expect Trains 3 and 4 to become operational in late 2016 and 2017, respectively.
  • The permitting process for Trains 5 and 6 has been completed. In April 2015, we received U.S. Federal Energy Regulatory Commission ("FERC") authorization to site, construct, and operate Trains 5 and 6. In June 2015, we received authorization from the U.S. Department of Energy ("DOE") to export LNG to non-free trade agreement countries.
  • Construction on Train 5 began on June 30, 2015, and Train 6 is under development. We expect Train 5 to commence operations as early as 2018. We expect to commence construction on Train 6 upon entering into acceptable commercial arrangements and obtaining adequate financing.

Sabine Pass Liquefaction Project Timeline






Target Date

Milestone


Trains
1 - 4


Trains
5 & 6

DOE export authorization


Received


Received

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


T5: Completed 
T6: 2015

Financing


Completed


T5: Completed 
T6: 2015

FERC authorization


Completed


Completed

Issue Notice to Proceed


Completed


T5: Completed 
T6: 2015

Commence operations


2015 - 2017


2018/2019

Distributions to Unitholders

We estimate that the annualized distribution to common unitholders for fiscal year 2015 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 3, 2015, and the related general partner distribution on August 14, 2015.

Cheniere Partners owns 100 percent of the Sabine Pass LNG terminal located on the Sabine Pass deepwater 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 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 of LNG. The overall project completion percentage of Trains 1 and 2 is approximately 92.2% as of June 30, 2015. The overall project completion percentage of Trains 3 and 4 is approximately 69.2% as of June 30, 2015. Construction commenced on Train 5 in June 2015. Cheniere Partners has received all regulatory approvals to construct and operate Train 6. Cheniere Partners 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 June 30, 2015, 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 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


Six Months Ended


June 30,


June 30,


2015


2014


2015


2014

Revenues








Revenues

$

66,490



$

66,594



$

133,208



$

133,043


Revenues—affiliate

1,199



734



2,011



1,506


Total revenues

67,689



67,328



135,219



134,549










Operating costs and expenses








Operating and maintenance expense

9,095



24,232



41,082



33,451


Operating and maintenance expense—affiliate

7,501



4,860



12,274



9,291


Depreciation expense

15,991



14,722



30,870



29,040


Development expense

1,367



3,792



2,518



7,288


Development expense—affiliate

206



242



410



394


General and administrative expense

4,081



4,234



7,596



7,600


General and administrative expense—affiliate

33,472



22,972



55,069



50,125


Total operating costs and expenses

71,713



75,054



149,819



137,189










Loss from operations

(4,024)



(7,726)



(14,600)



(2,640)










Other income (expense)








Interest expense, net

(50,148)



(43,789)



(92,993)



(84,059)


Loss on early extinguishment of debt

(7,281)



(114,335)



(96,273)



(114,335)


Derivative gain (loss), net

1,175



(60,178)



(35,209)



(94,859)


Other income (expense)

235



(196)



356



(64)


Total other expense

(56,019)



(218,498)



(224,119)



(293,317)










Net loss

$

(60,043)



$

(226,224)



$

(238,719)



$

(295,957)










Basic and diluted net loss per common unit

$

(0.01)



$

(0.85)



$

(0.62)



$

(0.91)










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

57,080



57,079



57,080



57,079






(1)

Please refer to the Cheniere Energy Partners, L.P. Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, filed with the Securities and Exchange Commission.

 

Cheniere Energy Partners, L.P.

Consolidated Balance Sheets

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






June 30,


December 31,


2015


2014

ASSETS

(unaudited)



Current assets




Cash and cash equivalents

$

194,914



$

248,830


Restricted cash

374,508



195,702


Accounts and interest receivable

410



333


Accounts receivable—affiliate

2,084



3,651


Advances to affiliate

24,783



27,323


LNG inventory

12,462



4,293


Other current assets

15,197



6,388


Total current assets

624,358



486,520






Non-current restricted cash

732,076



544,465


Property, plant and equipment, net

10,511,970



8,978,356


Debt issuance costs, net

292,450



241,909


Non-current derivative assets

426



11,744


Other non-current assets

147,257



124,521


Total assets

$

12,308,537



$

10,387,515






LIABILITIES AND PARTNERS' EQUITY




Current liabilities




Accounts payable

$

10,527



$

8,598


Accrued liabilities

312,292



136,578


Due to affiliates

49,672



18,952


Deferred revenue

26,671



26,655


Deferred revenue—affiliate

708



708


Derivative liabilities

7,839



23,247


Other current liabilities

599



18


Total current liabilities

408,308



214,756






Long-term debt, net

10,993,119



8,991,333


Non-current deferred revenue

11,500



13,500


Other non-current liabilities

1,833



2,452


Other non-current liabilities—affiliate

51,248



34,745






Partners' equity




Common unitholders' interest (57.1 million units issued and outstanding at June 30, 2015 and December 31, 2014)

377,702



495,597


Class B unitholders' interest (145.3 million units issued and outstanding at June 30, 2015 and December 31, 2014)

(38,146)



(38,216)


Subordinated unitholders' interest (135.4 million units issued and outstanding at June 30, 2015 and December 31, 2014)

483,802



648,414


General partner's interest (2% interest with 6.9 million units issued and outstanding at June 30, 2015 and December 31, 2014)

19,171



24,934


Total partners' equity

842,529



1,130,729


Total liabilities and partners' equity

$

12,308,537



$

10,387,515






(1)

 Please refer to the Cheniere Energy Partners, L.P. Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, 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-second-quarter-2015-results-300121581.html

SOURCE Cheniere Energy Partners, L.P.