Annual report pursuant to Section 13 and 15(d)

Property, Plant and Equipment (Notes)

v2.4.0.6
Property, Plant and Equipment (Notes)
 12 Months Ended
Dec. 31, 2012
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,
 
 
2012
 
2011
LNG terminal costs
 
 
 
 
LNG terminal
 
$
1,641,722

 
$
1,637,724

LNG terminal construction-in-process
 
1,228,647

 
286

LNG site and related costs, net
 
156

 
163

Accumulated depreciation
 
(166,538
)
 
(124,409
)
Total LNG terminal costs, net
 
2,703,987

 
1,513,764

 
 
 
 
 
Fixed assets
 
 

 
 

Computer and office equipment
 
368

 
227

Vehicles
 
704

 
416

Machinery and equipment
 
1,473

 
1,068

Other
 
760

 
916

Accumulated depreciation
 
(2,397
)
 
(1,975
)
Total fixed assets, net
 
908

 
652

 
 
 
 
 
Property, plant and equipment, net
 
$
2,704,895

 
$
1,514,416

 
Depreciation expense related to the Sabine Pass LNG terminal totaled $42.1 million, $42.6 million and $41.8 million for the years ended December 31, 2012, 2011 and 2010, respectively.

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
Marine berth, electrical, facility and roads
 
35
Regasification processing equipment (recondensers, vaporization and vents)
 
30
Sendout pumps
 
20
Others
 
15-30


In June 2012, Train 1 and Train 2 of the Liquefaction Project satisfied the criteria for capitalization. Accordingly, costs associated with the construction of Train 1 and Train 2 of the Liquefaction Project have been recorded as construction-in-process since that date. For the year ended December 31, 2012, we capitalized $35.1 million of interest expense related to the construction of Train 1 and Train 2 of the Liquefaction Project.