Annual report pursuant to Section 13 and 15(d)

Property, Plant and Equipment

v3.19.3.a.u2
Property, Plant and Equipment
 12 Months Ended
Dec. 31, 2019
Property, Plant and Equipment [Abstract]  
Property, Plant and Equipment PROPERTY, PLANT AND EQUIPMENT
 
As of December 31, 2019 and 2018, property, plant and equipment, net consisted of the following (in millions):
 
 
December 31,
 
 
2019
 
2018
LNG terminal costs
 
 
 
 
LNG terminal and interconnecting pipeline facilities
 
$
16,894

 
$
12,760

LNG terminal construction-in-process
 
1,275

 
3,913

Accumulated depreciation
 
(1,807
)
 
(1,290
)
Total LNG terminal costs, net
 
16,362

 
15,383

Fixed assets
 
 

 
 

Fixed assets
 
27

 
26

Accumulated depreciation
 
(21
)
 
(19
)
Total fixed assets, net
 
6

 
7

Property, plant and equipment, net
 
$
16,368

 
$
15,390

 

Depreciation expense was $523 million, $413 million and $331 million during the years ended December 31, 2019, 2018 and 2017, respectively.

We realized offsets to LNG terminal costs of $48 million, $94 million and $301 million during the years ended December 31, 2019, 2018 and 2017, respectively, that were related to the sale of commissioning cargoes because these amounts were earned or loaded prior to the start of commercial operations of the respective Trains of the Liquefaction Project, during the testing phase for its construction.

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 have depreciable lives between 7 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
 
7-50
Other
 
10-30

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.