Annual report pursuant to Section 13 and 15(d)

Property, Plant and Equipment

v3.10.0.1
Property, Plant and Equipment
 12 Months Ended
Dec. 31, 2018
Property, Plant and Equipment [Abstract]  
Property, Plant and Equipment
PROPERTY, PLANT AND EQUIPMENT
 
As of December 31, 2018 and 2017, property, plant and equipment, net consisted of the following (in millions):
 
 
December 31,
 
 
2018
 
2017
LNG terminal costs
 
 
 
 
LNG terminal and interconnecting pipeline facilities
 
$
12,760

 
$
12,703

LNG terminal construction-in-process
 
3,913

 
3,310

Accumulated depreciation
 
(1,290
)
 
(880
)
Total LNG terminal costs, net
 
15,383

 
15,133

Fixed assets
 
 

 
 

Fixed assets
 
26

 
23

Accumulated depreciation
 
(19
)
 
(17
)
Total fixed assets, net
 
7

 
6

Property, plant and equipment, net
 
$
15,390

 
$
15,139

 

Depreciation expense was $413 million, $331 million and $148 million during the years ended December 31, 2018, 2017 and 2016, respectively.

We realize offsets to LNG terminal costs for sales of commissioning cargoes that were earned or loaded prior to the start of commercial operations of the respective Train during the testing phase for its construction. We realized offsets to LNG terminal costs of $94 million, $301 million and $201 million in the years ended December 31, 2018, 2017 and 2016, respectively, for sales of commissioning cargoes from the Liquefaction Project.

LNG Terminal Costs

The Sabine Pass LNG terminal is depreciated using the straight-line depreciation method applied to groups of LNG terminal assets with varying useful lives. The identifiable components of the Sabine Pass LNG terminal with similar estimated useful lives have a depreciable range between 6 and 50 years, as follows:
Components
 
Useful life (yrs)
LNG storage tanks
 
50
Natural gas pipeline facilities
 
40
Marine berth, electrical, facility and roads
 
35
Water pipelines
 
30
Regasification processing equipment
 
30
Sendout pumps
 
20
Liquefaction processing equipment
 
6-50
Other
 
15-30


Fixed Assets and Other

Our fixed assets and other are recorded at cost and are depreciated on a straight-line method based on estimated lives of the individual assets or groups of assets.