HOUSTON, Feb. 24, 2012 /PRNewswire/ -- For the quarter and year ended December 31, 2011, Cheniere Energy Partners, L.P. ("Cheniere Partners") (NYSE Amex: CQP) reported a net loss of $7.5 million and $31.0 million, respectively, compared to a net loss of $2.7 million and net income of $107.6 million, respectively, for the same periods in 2010. For the year ended December 31, 2011, affiliate revenues decreased $116.3 million primarily as a result of the assignment of the terminal use agreement ("TUA") in June 2010 from Cheniere Marketing, LLC ("Cheniere Marketing") to Cheniere Energy Investments, LLC ("Investments"), our wholly owned subsidiary, which required us to eliminate for consolidated reporting purposes the TUA revenues under this contract to Sabine Pass LNG, L.P. ("Sabine Pass"), our wholly owned subsidiary.
Overview of Significant Events
As of February 2012, Sabine Liquefaction has contracted additional volumes under SPAs and has now sold approximately 16.0 mtpa of LNG, or approximately 89% of the expected nameplate liquefaction volumes that will be available upon the completion of the liquefaction facilities. The fixed fee component for the SPAs equates to a range between $2.25 per million British thermal units ("MMBtu") and $3.00 per MMBtu and, in aggregate, the fixed fee component from all four SPAs totals approximately $2.3 billion annually.
Cheniere Partners reported income from operations of $37.0 million and $144.6 million for the quarter and year ended December 31, 2011, respectively, compared to income from operations of $40.7 million and $280.8 million for the comparable periods in 2010.
Total revenues for the quarter and year ended December 31, 2011, were $70.8 million and $283.8 million, respectively, compared to total revenues of $72.1 million and $399.3 million for the comparable periods in 2010. Total revenues primarily include capacity payments received from customers in accordance with their TUAs and incremental revenues from tug services and re-export fees. Revenues from affiliates for the year ended December 31, 2011, decreased by $116.3 million when compared to the comparable period in 2010 due to the assignment of Cheniere Marketing's TUA to Investments, partially offset by revenues from the variable capacity rights agreement ("VCRA") with Cheniere Marketing.
Total operating costs and expenses for the quarter and year ended December 31, 2011, were $33.8 million and $139.2 million, respectively, compared to $31.4 million and $118.5 million for the comparable periods in 2010. Development expense (including affiliate) increased $25.9 million for the year ended December 31, 2011, compared to 2010, primarily due to expenses related to the proposed Liquefaction Project. Operating and maintenance expenses (including affiliate) decreased $5.4 million for the year ended December 31, 2011, compared to 2010, primarily due to decreased fuel costs as a result of efficiencies in our LNG inventory management.
Liquefaction Project Update
We continue to make progress on our Liquefaction Project, which is being designed and permitted for up to four liquefaction trains, each with a nominal production capability of approximately 4.5 mtpa. We anticipate LNG exports from the Sabine Pass LNG terminal could commence as early as 2015, with each liquefaction train commencing operations approximately six to nine months after the previous train.
We are advancing towards making a final investment decision on the first two liquefaction trains, which is subject, but not limited to, obtaining regulatory approval from the Federal Energy Regulatory Commission ("FERC") and obtaining financing. We estimate that the costs to construct the first two liquefaction trains will be approximately $4.5 billion to $5.0 billion, before financing costs. We expect to finance the first two liquefaction trains with a combination of debt and equity. Construction is expected to commence in the first half of 2012.
Commencement of construction for liquefaction trains 3 and 4 is subject, but not limited to, regulatory approvals, entering into an EPC agreement, obtaining financing and making a final investment decision. Sabine Liquefaction has engaged Bechtel to complete front-end engineering and design work and to negotiate a lump sum turnkey contract. Construction for LNG trains 3 and 4 is targeted for early 2013.
Summary Liquefaction Project Timeline
Trains 1 & 2
Trains 3 & 4
DOE export authorization
Definitive commercial agreements
Completed 7.7 mtpa
Completed 8.3 mtpa
BG Gulf Coast LNG, LLC
Gas Natural Fenosa
GAIL (India) Ltd.
FERC construction authorization
For the quarters ended on and after June 30, 2010, we paid the initial quarterly distribution of $0.425 to all common unitholders and 2% of the distributions to the general partner but did not make any distributions to the subordinated unitholders. Cash available for distributions to the common unitholders and the general partner is supported by payments made by Total and Chevron for their capacity under their TUAs.
The subordinated units will receive distributions only to the extent we have available cash above the initial quarterly distributions required for our common unitholders and general partner along with certain reserves. Such available cash could be generated through new business development or fees received from Cheniere Marketing under the VCRA whereby Cheniere Marketing will pay Investments 80% of the gross margin for each cargo it delivers to the Sabine Pass LNG terminal. On a longer-term basis, available cash for subordinated unit distributions is expected to be generated from the Liquefaction Project.
Cheniere Partners estimates that its annualized distribution to common unitholders for fiscal year 2012 will be $1.70 per unit.
Cheniere Partners owns 100 percent of the Sabine Pass LNG terminal located in western Cameron Parish, Louisiana on the Sabine Pass Channel. The terminal has sendout capacity of 4.0 Bcf/d and storage capacity of 16.9 Bcfe. Additional information about Cheniere Partners may be found on its website: www.cheniereenergypartners.com.
This press release contains certain statements that may include "forward-looking statements" within the meanings of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. 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 and (ii) statements expressing beliefs and expectations regarding the development of Cheniere Partners' LNG terminal business and liquefaction project. 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.
Selected Financial Information
(in thousands, except per unit data) (1)
Three Months Ended
Revenues - affiliate
Operating costs and expenses
Development expense - affiliate
Operating and maintenance expense
Operating and maintenance expense - affiliate
Depreciation, depletion and amortization
General and administrative expense
General and administrative expense-affiliate
Total operating costs and expenses
Income from operations
Interest expense, net (4)
Derivative gain (loss)
Net income (loss)
Basic and diluted net income per common unit
Weighted average number of common units outstanding used for basic and diluted net income (loss) per common unit calculation
December 31, 2011 (3)
December 31, 2010 (3)
Cash and cash equivalents
Restricted cash and cash equivalents
LNG Inventory - affiliate
Other current assets (4)
Non-current restricted cash and cash equivalents
Property, plant and equipment, net
Debt issuance costs, net
Current liabilities (4)
Long-term debt, net of discount
Deferred revenue, including affiliate
Other liabilities (4)
Total partners' deficit
Total liabilities and partners' deficit
Please refer to Cheniere Energy Partners, L.P. Annual Report on Form 10-K for the year ended December 31, 2011, filed with the Securities and Exchange Commission.
Consolidated operating results of Cheniere Energy Partners, L.P. and its consolidated subsidiaries for the three months and year ended December 31, 2011 and 2010.
Consolidated balance sheets of Cheniere Energy Partners, L.P. and its consolidated subsidiaries.
Amounts include transactions between Cheniere Partners and Cheniere Energy, Inc. or subsidiaries of Cheniere Energy, Inc.
SOURCE Cheniere Energy Partners, L.P.