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 October 30, 2015 - 8:00 AM EDT
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Cheniere Energy Partners, L.P. Reports Third Quarter 2015 Results

HOUSTON, Oct. 30, 2015 /PRNewswire/ -- Cheniere Energy Partners, L.P. ("Cheniere Partners") (NYSE MKT: CQP) reported a net loss of $24.1 million and $262.9 million for the three and nine months ended September 30, 2015, respectively, compared to a net loss of $43.2 million and $339.2 million for the same periods in 2014, respectively. 

Significant items for the three months ended September 30, 2015 resulted in a gain of $21.1 million and are related to derivative loss associated with the changes in long-term LIBOR during the period, and development expense, offset by changes in operating and maintenance expense associated with the increase in fair value of certain natural gas purchase agreements related to gas procurement for the liquefaction project currently under construction at the Sabine Pass LNG terminal adjacent to the existing regasification facilities (the "Sabine Pass Liquefaction Project"). Significant items for the nine months ended September 30, 2015 resulted in a loss of $113.8 million and are related to loss on early extinguishment of debt, derivative losses primarily due to the termination of interest rate swaps, and development expense, partially offset by changes in operating and maintenance expense described above.

General and administrative expense (including affiliate) increased by $2.5 million and $7.4 million for the three and nine months ended September 30, 2015, respectively, compared to the corresponding 2014 periods, primarily due to an increase in management fees incurred under certain management service agreements with wholly owned subsidiaries of Cheniere Energy, Inc. ("Cheniere") (NYSE MKT: LNG). Our wholly-owned subsidiary, Sabine Pass Liquefaction, LLC ("SPL")  is required to pay monthly fees to an affiliate of Cheniere based upon the capital expenditures incurred in the previous month for construction of the first five natural gas liquefaction trains ("Trains") of the Sabine Pass Liquefaction Project. Operating and maintenance expense (including affiliate) decreased by $40.8 million and $30.9 million for the three and nine months ended September 30, 2015, respectively, compared to the corresponding 2014 periods, primarily due to the increase in fair value of certain natural gas purchase agreements related to gas procurement for the Sabine Pass Liquefaction Project.

Recent Significant Events

  • SPL entered into a $1.2 billion working capital facility that will be used primarily for certain working capital requirements related to developing and placing into operation the Sabine Pass Liquefaction Project.

Sabine Pass Liquefaction Project Update

We continue to make progress on the Sabine Pass Liquefaction Project, which is being developed for up to six Trains, each with an expected nominal production capacity of approximately 4.5 million tonnes per annum ("mtpa") of LNG.

The Trains are in various stages of development:

  • Construction on Trains 1 and 2 began in August 2012, and as of September 30, 2015, the overall project completion percentage for Trains 1 and 2 was approximately 95.2%, which is ahead of the contractual schedule. Based on our current construction schedule, we anticipate that Train 1 will produce LNG as early as late 2015.
  • Construction on Trains 3 and 4 began in May 2013, and as of September 30, 2015, the overall project completion percentage for Trains 3 and 4 was approximately 73.6%, which is ahead of the contractual schedule. We expect Trains 3 and 4 to become operational in late 2016 and 2017, respectively.
  • The permitting process for Trains 5 and 6 has been completed. In April 2015, we received U.S. Federal Energy Regulatory Commission ("FERC") authorization to site, construct, and operate Trains 5 and 6. In June 2015, we received authorization from the U.S. Department of Energy ("DOE") to export LNG to non-free trade agreement countries.
  • Construction on Train 5 began on June 30, 2015, and we expect Train 5 to commence operations as early as 2018. We expect to commence construction on Train 6 upon entering into acceptable commercial arrangements and obtaining adequate financing.

 

Sabine Pass Liquefaction Project Timeline






Target Date

Milestone


Trains
1 - 4


Trains
5 & 6

DOE export authorization


Received


Received

Definitive commercial agreements


Completed
16.0 mtpa


T5: Completed
T6: 2015/2016

- BG Gulf Coast LNG, LLC


5.5 mtpa



- Gas Natural Fenosa


3.5 mtpa



- KOGAS


3.5 mtpa



- GAIL (India) Ltd.


 3.5 mtpa



- Total Gas & Power N.A.




2.0 mtpa

- Centrica plc




1.75 mtpa

EPC contracts


Completed


T5: Completed
T6: 2015/2016

Financing


Completed


T5: Completed
T6: 2015/2016

FERC authorization


Completed


Completed

Issue Notice to Proceed


Completed


T5: Completed 
T6: 2015/2016

Commence operations


2015 - 2017


2018/2019

Distributions to Unitholders

We estimate that the annualized distribution to common unitholders for fiscal year 2015 will be $1.70 per unit.

We will pay a cash distribution per common unit of $0.425 to unitholders of record as of November 2, 2015, and the related general partner distribution on November 13, 2015.

Cheniere Partners owns 100 percent of the Sabine Pass LNG terminal located on the Sabine Pass deepwater shipping channel less than four miles from the Gulf Coast. The Sabine Pass LNG terminal includes existing infrastructure of five LNG storage tanks with capacity of approximately 16.9 Bcfe, two docks that can accommodate vessels with nominal capacity of up to 266,000 cubic meters and vaporizers with regasification capacity of approximately 4.0 Bcf/d.

Cheniere Partners is developing natural gas liquefaction facilities at the Sabine Pass LNG terminal adjacent to the existing regasification facilities. Cheniere Partners plans to construct over time up to six natural gas Trains, which are in various stages of development. Each Train is expected to have a nominal production capacity of approximately 4.5 mtpa of LNG. The overall project completion percentage of Trains 1 and 2 is approximately 95.2% as of September 30, 2015. The overall project completion percentage of Trains 3 and 4 is approximately 73.6% as of September 30, 2015. Construction commenced on Train 5 in June 2015. Cheniere Partners has received all regulatory approvals to construct and operate Train 6. Cheniere Partners has entered into six third-party LNG Sale and Purchase Agreements ("SPAs") that in the aggregate equate to approximately 19.75 mtpa of LNG and commence with the date of first commercial delivery of Trains 1 through 5 as specified in the respective SPAs.

For additional information, please refer to the Cheniere Partners website at www.cheniere.com and Quarterly Report on Form 10-Q for the quarter ended September 30, 2015, filed with the Securities and Exchange Commission.

This press release contains certain statements that may include "forward-looking statements." All statements, other than statements of historical facts, included herein are "forward-looking statements." Included among "forward-looking statements" are, among other things, (i) statements regarding Cheniere Partners' business strategy, plans and objectives, including the development, construction and operation of liquefaction facilities, (ii) statements regarding expectations regarding regulatory authorizations and approvals, (iii) statements expressing beliefs and expectations regarding the development of Cheniere Partners' LNG terminal and liquefaction business, (iv) statements regarding the business operations and prospects of third parties, (v) statements regarding potential financing arrangements, and (vi) statements regarding future discussions and entry into contracts. Although Cheniere Partners believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Cheniere Partners' actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in Cheniere Partners' periodic reports that are filed with and available from the Securities and Exchange Commission. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Other than as required under the securities laws, Cheniere Partners does not assume a duty to update these forward-looking statements.

 (Financial Tables Follow)

 


Cheniere Energy Partners, L.P.

Consolidated Statements of Operations

(in thousands, except per unit data) (1)

(unaudited)






Three Months Ended


Nine Months Ended


September 30,


September 30,


2015


2014


2015


2014

Revenues








Revenues

$

66,596



$

66,890



$

199,804



$

199,933


Revenues—affiliate

941



700



2,952



2,206


Total revenues

67,537



67,590



202,756



202,139










Operating costs and expenses








Operating and maintenance expense (income)

(22,782)



21,041



17,840



54,750


Operating and maintenance expense—affiliate

8,081



5,016



20,355



14,307


Depreciation expense

16,687



14,781



47,557



43,821


Development expense

113



1,383



2,631



8,671


Development expense—affiliate

152



329



562



723


General and administrative expense

3,673



2,448



11,269



10,048


General and administrative expense—affiliate

25,692



24,454



80,761



74,579


Total operating costs and expenses

31,616



69,452



180,975



206,899










Income (loss) from operations

35,921



(1,862)



21,781



(4,760)










Other income (expense)








Interest expense, net of amounts capitalized

(49,360)



(46,884)



(142,353)



(130,943)


Loss on early extinguishment of debt





(96,273)



(114,335)


Derivative gain (loss), net

(10,872)



5,379



(46,541)



(89,222)


Other income

179



127



535



63


Total other expense

(60,053)



(41,378)



(284,632)



(334,437)










Net loss

$

(24,132)



$

(43,240)



$

(262,851)



$

(339,197)










Basic and diluted net income (loss) per common unit

$

0.18



$

0.08



$

(0.44)



$

(0.83)










Weighted average number of common units outstanding used for basic and diluted net income (loss) per common unit calculation

57,081



57,079



57,081



57,079






(1)

Please refer to the Cheniere Energy Partners, L.P. Quarterly Report on Form 10-Q for the quarter ended September 30, 2015, filed with the Securities and Exchange Commission.

 


Cheniere Energy Partners, L.P.

Consolidated Balance Sheets

(in thousands, except per unit data) (1)






September 30,


December 31,


2015


2014

ASSETS

(unaudited)



Current assets




Cash and cash equivalents

$

170,433



$

248,830


Restricted cash

391,495



195,702


Accounts and interest receivable

95



333


Accounts receivable—affiliate

2,566



3,651


Advances to affiliate

54,995



27,323


LNG inventory

7,145



4,293


Other current assets

16,055



6,388


Total current assets

642,784



486,520






Non-current restricted cash

76,107



544,465


Property, plant and equipment, net

11,299,725



8,978,356


Debt issuance costs, net

307,099



241,909


Non-current derivative assets

30,657



11,744


Other non-current assets

190,960



124,521


Total assets

$

12,547,332



$

10,387,515






LIABILITIES AND PARTNERS' EQUITY




Current liabilities




Accounts payable

$

7,096



$

8,598


Accrued liabilities

352,457



136,578


Due to affiliates

32,851



18,952


Deferred revenue

26,653



26,655


Deferred revenue—affiliate

708



708


Derivative liabilities

7,388



23,247


Other current liabilities

267



18


Total current liabilities

427,420



214,756






Long-term debt, net

11,244,002



8,991,333


Non-current deferred revenue

10,500



13,500


Non-current derivative liabilities

8,832



267


Other non-current liabilities

1,177



2,185


Other non-current liabilities—affiliate

61,691



34,745






Partners' equity




Common unitholders' interest (57.1 million units issued and outstanding at September 30, 2015 and December 31, 2014)

346,443



495,597


Class B unitholders' interest (145.3 million units issued and outstanding at September 30, 2015 and December 31, 2014)

(37,981)



(38,216)


Subordinated unitholders' interest (135.4 million units issued and outstanding at September 30, 2015 and December 31, 2014)

467,054



648,414


General partner's interest (2% interest with 6.9 million units issued and outstanding at September 30, 2015 and December 31, 2014)

18,194



24,934


Total partners' equity

793,710



1,130,729


Total liabilities and partners' equity

$

12,547,332



$

10,387,515






(1)

Please refer to the Cheniere Energy Partners, L.P. Quarterly Report on Form 10-Q for the quarter ended September 30, 2015, filed with the Securities and Exchange Commission.

 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/cheniere-energy-partners-lp-reports-third-quarter-2015-results-300169342.html

SOURCE Cheniere Energy Partners, L.P.


Source: PR Newswire (October 30, 2015 - 8:00 AM EDT)

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