Cheniere Energy Partners, L.P. Reports Fourth Quarter and Full Year 2015 Results

- Sabine Pass Train 1 has begun producing LNG; First LNG commissioning cargo expected to be exported late February / March

- Sabine Pass Trains 1 and 2 substantial completion expected to occur in late April / May and August, respectively

Feb 19, 2016, 08:30 ET from Cheniere Energy Partners, L.P.

HOUSTON, Feb. 19, 2016 /PRNewswire/ -- Cheniere Energy Partners, L.P. ("Cheniere Partners") (NYSE MKT: CQP) reported a net loss of $56.0 million and $318.9 million for the three and twelve months ended December 31, 2015, respectively, compared to a net loss of $70.8 million and $410.0 million for the same periods in 2014, respectively. 

Significant items for the three months ended December 31, 2015 totaled a gain of $4.8 million, compared to a loss $30.2 million for the comparable 2014 period, and related to derivative gains due primarily to changes in long-term LIBOR during the period. The significant item for the three months ended December 31, 2014 related to derivative losses. For the twelve months ended December 31, 2015, significant items totaled a loss of $138.0 million, compared to a loss of $233.7 million for the comparable 2014 period. Significant items for the twelve months ended December 31, 2015 related to loss on early extinguishment of debt associated with the write-off of debt issuance costs by Sabine Pass Liquefaction, LLC ("SPL") primarily in connection with the refinancing of a portion of its credit facilities in March 2015, and derivative losses primarily attributable to the termination of interest rate swaps. Significant items for the twelve months ended December 31, 2014 related to derivative losses, and losses on early extinguishment of debt.

General and administrative expense (including affiliate) increased by $14.8 million and $22.2 million for the three and twelve months ended December 31, 2015, respectively, compared to the corresponding 2014 periods, primarily due to costs of services provided by Cheniere Energy, Inc. (NYSE MKT: LNG) pursuant to an information technology services agreement.

Sabine Pass LNG Terminal

We are developing up to six natural gas liquefaction trains ("Trains"), each with an expected nominal production capacity of approximately 4.5 million tonnes per annum ("mtpa") of LNG, at the Sabine Pass LNG terminal adjacent to the existing regasification facilities (the "Sabine Pass Liquefaction Project").

The Trains are in various stages of development, with construction of the first Train complete and the commissioning process underway. Train 1 has begun producing LNG, and the first LNG commissioning cargo is expected to be exported late February / March. Commissioning for Train 2 is expected to commence in the upcoming months. The remaining Trains are expected to commence commissioning on a staggered basis thereafter.

  • Construction on Trains 1 and 2 began in August 2012, and as of December 31, 2015, the overall project completion percentage for Trains 1 and 2 was approximately 97.4%, which is ahead of the contractual schedule. Based on the recently updated construction and commissioning schedule, we expect to export the first LNG commissioning cargo in late February or March 2016.
  • Construction on Trains 3 and 4 began in May 2013, and as of December 31, 2015, the overall project completion percentage for Trains 3 and 4 was approximately 79.5%, which is ahead of the contractual schedule. We expect Trains 3 and 4 to become operational in 2017.
  • Construction on Train 5 began in June 2015, and as of December 31, 2015, the overall project completion percentage for Train 5 was approximately 14.9%, which is ahead of the contractual schedule. Engineering, procurement and construction were approximately 41.9%, 20.5% and 0.1% complete, respectively. We expect Train 5 to become operational in 2019.
  • Train 6 is currently under development, with all necessary regulatory approvals in place. We expect to make a final investment decision and commence construction on Train 6 upon, among other things, entering into acceptable commercial arrangements and obtaining adequate financing.

 

Sabine Pass Liquefaction Project Timeline




Target Date

Milestone


Trains
1 - 5


Train
6

DOE export authorization


Received


Received

Definitive commercial agreements


Completed

19.75 mtpa


2016/2017

- 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


2016/2017

Financing


Completed


2016/2017

FERC authorization


Completed


Completed

Issue Notice to Proceed


Completed


2016/2017

Commence operations


2016 - 2019


2019/2020

Distributions to Unitholders

We paid a cash distribution per common unit of $0.425 to unitholders of record as of February 1, 2016, and the related general partner distribution on February 12, 2016.

We estimate that the annualized distribution to common unitholders for fiscal year 2016 will be $1.70 per unit.

Through our wholly-owned subsidiary, Sabine Pass LNG, L.P., Cheniere Partners owns 100% of the Sabine Pass LNG terminal located on the Sabine-Neches Waterway 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 billion cubic feet equivalent (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. Through its wholly-owned subsidiary Cheniere Creole Trail Pipeline, L.P., Cheniere Partners also owns a 94-mile pipeline that interconnects the Sabine Pass LNG terminal with a number of large interstate pipelines.

Cheniere Partners, through its subsidiary, SPL, is developing and constructing natural gas liquefaction facilities at the Sabine Pass LNG terminal adjacent to the existing regasification facilities. Cheniere Partners, through SPL, plans to construct over time up to six liquefaction trains, which are in various stages of development. Each liquefaction train is expected to have a nominal production capacity of approximately 4.5 mtpa of LNG. SPL 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 Annual Report on Form 10-K for the fiscal year ended December 31, 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 Table Follows)

 

Cheniere Energy Partners, L.P.

Consolidated Statements of Operations

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






Three Months Ended


Year Ended


December 31,


December 31,


2015


2014


2015


2014

Revenues








Revenues

$

65,833



$

65,807



$

265,637



$

265,740


Revenues—affiliate

1,439



752



4,391



2,958


Total revenues

67,272



66,559



270,028



268,698










Operating costs and expenses








Operating and maintenance expense

13,100



8,069



30,940



62,819


Operating and maintenance expense—affiliate

9,024



6,808



29,379



21,115


Depreciation and amortization expense

18,147



14,780



65,704



58,601


Development expense

219



648



2,850



9,319


Development expense—affiliate

160



430



722



1,153


General and administrative expense

3,810



3,759



15,079



13,807


General and administrative expense—affiliate

41,551



26,790



122,312



101,369


Total operating costs and expenses

86,011



61,284



266,986



268,183










Income (loss) from operations

(18,739)



5,275



3,042



515










Other income (expense)








Interest expense, net of amounts capitalized

(42,247)



(46,089)



(184,600)



(177,032)


Loss on early extinguishment of debt





(96,273)



(114,335)


Derivative gain (loss), net

4,819



(30,179)



(41,722)



(119,401)


Other income

127



154



662



217


Total other expense

(37,301)



(76,114)



(321,933)



(410,551)










Net loss

$

(56,040)



$

(70,839)



$

(318,891)



$

(410,036)










Basic and diluted net income (loss) per common unit

$

0.01



$

0.06



$

(0.43)



$

(0.89)










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

57,083



57,080



57,081



57,079















(1)

Please refer to the Cheniere Energy Partners, L.P. Annual Report on Form 10-K for the fiscal year ended December 31, 2015, filed with the Securities and Exchange Commission.

 

Cheniere Energy Partners, L.P.

Consolidated Balance Sheets

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



December 31,


2015


2014

ASSETS




Current assets




Cash and cash equivalents

$

146,221



$

248,830


Restricted cash

274,557



195,702


Accounts and interest receivable

742



333


Accounts receivable—affiliate

1,271



3,651


Advances to affiliate

39,836



27,323


Inventory

16,667



7,786


Other current assets

11,828



2,895


Other current assets—affiliate

2,353




Total current assets

493,475



486,520






Non-current restricted cash

13,650



544,465


Property, plant and equipment, net

11,931,602



8,978,356


Debt issuance costs, net

295,265



241,909


Non-current derivative assets

30,304



11,744


Other non-current assets

200,013



124,521


Other non-current assets—affiliate

32,018




Total assets

$

12,996,327



$

10,387,515






LIABILITIES AND PARTNERS' EQUITY




Current liabilities




Accounts payable

$

16,407



$

8,598


Accrued liabilities

224,292



136,578


Current debt, net

1,676,197




Due to affiliates

115,123



18,952


Deferred revenue

26,669



26,655


Deferred revenue—affiliate

717



708


Derivative liabilities

6,430



23,247


Other current liabilities



18


Total current liabilities

2,065,835



214,756






Long-term debt, net

10,178,681



8,991,333


Non-current deferred revenue

9,500



13,500


Other non-current liabilities

3,059



2,452


Other non-current liabilities—affiliate

26,321



34,745






Commitments and contingencies








Partners' equity




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

305,747



495,597


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

(37,429)



(38,216)


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

428,035



648,414


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

16,578



24,934


Total partners' equity

712,931



1,130,729


Total liabilities and partners' equity

$

12,996,327



$

10,387,515













(1)

Please refer to the Cheniere Energy Partners, L.P. Annual Report on Form 10-K for the fiscal year ended December 31, 2015, filed with the Securities and Exchange Commission.

 

SOURCE Cheniere Energy Partners, L.P.



RELATED LINKS

http://www.cheniere.com