Annual report pursuant to Section 13 and 15(d)

Property, Plant and Equipment

v3.8.0.1
Property, Plant and Equipment
 12 Months Ended
Dec. 31, 2017
Property, Plant and Equipment [Abstract]  
Property, Plant and Equipment
PROPERTY, PLANT AND EQUIPMENT
 
Property, plant and equipment, net consists of LNG terminal costs and fixed assets, as follows (in millions):
 
 
December 31,
 
 
2017
 
2016
LNG terminal costs
 
 
 
 
LNG terminal
 
$
12,703

 
$
7,976

LNG terminal construction-in-process
 
3,310

 
6,728

Accumulated depreciation
 
(880
)
 
(553
)
Total LNG terminal costs, net
 
15,133

 
14,151

Fixed assets
 
 

 
 

Fixed assets
 
23

 
20

Accumulated depreciation
 
(17
)
 
(13
)
Total fixed assets, net
 
6

 
7

Property, plant and equipment, net
 
$
15,139

 
$
14,158

 

Depreciation expense was $331 million, $148 million and $65 million in the years ended December 31, 2017, 2016 and 2015, respectively.

We realized offsets to LNG terminal costs of $301 million and $201 million in the years ended December 31, 2017 and 2016, 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 Train 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 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
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.