Annual report pursuant to Section 13 and 15(d)

Property, Plant and Equipment (Notes)

v2.4.0.8
Property, Plant and Equipment (Notes)
 12 Months Ended
Dec. 31, 2013
Property, Plant and Equipment [Abstract]  
Property, Plant and Equipment
PROPERTY, PLANT AND EQUIPMENT
 
Property, plant and equipment consists of LNG terminal costs and fixed assets, as follows (in thousands):
 
 
December 31,
 
 
2013
 
2012
LNG terminal costs
 
 
 
 
LNG terminal
 
$
2,225,412

 
$
2,224,230

LNG terminal construction-in-process
 
4,448,541

 
1,228,647

LNG site and related costs, net
 
149

 
156

Accumulated depreciation
 
(291,265
)
 
(234,349
)
Total LNG terminal costs, net
 
6,382,837

 
3,218,684

 
 
 
 
 
Fixed assets
 
 

 
 

Computer and office equipment
 
612

 
368

Vehicles
 
907

 
704

Machinery and equipment
 
1,490

 
1,473

Other
 
963

 
760

Accumulated depreciation
 
(2,870
)
 
(2,397
)
Total fixed assets, net
 
1,102

 
908

 
 
 
 
 
Property, plant and equipment, net
 
$
6,383,939

 
$
3,219,592

 
Depreciation expense related to the Sabine Pass LNG terminal totaled $57.3 million, $57.3 million, and $57.8 million for the years ended December 31, 2013, 2012 and 2011, respectively.

In June 2012, we began capitalizing costs associated with Trains 1 and 2 of the Liquefaction Project, and in May 2013, we began capitalizing costs associated with Trains 3 and 4 of the Liquefaction Project. For the years ended December 31, 2013 and 2012, we capitalized $188.7 million and $35.1 million, respectively,of interest expense related to the construction of Trains 1 through 4 of the Liquefaction Project.

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 15 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
Regasification processing equipment (recondensers, vaporization and vents)
 
30
Sendout pumps
 
20
Others
 
15-30

Fixed Assets 

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