HOUSTON, May 4, 2012 /PRNewswire/ -- Cheniere Energy, Inc. ("Cheniere") (NYSE Amex: LNG) reported a net loss of $56.4 million, or $0.43 per share (basic and diluted), for the quarter ended March 31, 2012, compared with a net loss of $39.8 million, or $0.60 per share (basic and diluted), for the comparable 2011 period. Results include LNG terminal and pipeline development expenses of $21.8 million, or $0.17 per share for the quarter ended March 31, 2012 and $8.4 million, or $0.13 per share, for the comparable 2011 period, which primarily related to the Sabine Pass Liquefaction Project ("Liquefaction Project") currently under development.
Results are reported on a consolidated basis and include our 88.7 percent ownership interest in Cheniere Energy Partners, L.P. ("Cheniere Partners").
Overview of Significant 2012 Events
Q1 2012 Results
Cheniere reported income from operations of $0.7 million for the quarter ended March 31, 2012, compared to income from operations of $23.6 million for the comparable period in 2011. The decrease in net operating income of $22.9 million was primarily a result of increased LNG terminal and pipeline development expenses of $13.4 million and decreased LNG and natural gas marketing and trading revenues of $5.8 million. LNG terminal and pipeline development expenses increased due to costs incurred to develop the Liquefaction Project. LNG and natural gas marketing and trading revenues decreased due to less LNG export cargo sales and lower-of-cost-or-market adjustments on our LNG inventory.
Interest expense, net of amounts capitalized, decreased $5.8 million, from the three months ended March 31, 2011 to the three months ended March 31, 2012 due to the reduction of our indebtedness during the first quarter of 2012.
Liquefaction Project Update
Cheniere Partners continues to make progress on the Liquefaction Project, which is being developed 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.
Cheniere Partners is advancing towards commencing construction on the first two liquefaction trains. The Liquefaction Project recently received approval from the FERC. One of the last steps needed to proceed with construction is to obtain financing. Cheniere Partners expects to fund the first two liquefaction trains with a combination of debt and equity and is actively pursuing financing for the first two liquefaction trains. Construction of the first two liquefaction trains is expected to commence in the first half of 2012.
Commencement of construction for LNG trains three and four is subject, but not limited to, entering into an engineering procurement and construction agreement, obtaining financing and reaching a positive final investment decision. Cheniere Partners has engaged Bechtel Oil, Gas and Chemicals, Inc. to complete front-end engineering and design work and to negotiate a lump sum turnkey contract. Construction for liquefaction trains three and four is targeted to begin in early 2013.
Summary 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.
- Certificate to commence construction
As of March 31, 2012, we had unrestricted cash and cash equivalents of $439.8 million that will be available to Cheniere, which excludes cash and cash equivalents and other working capital available to Cheniere Partners and Sabine Pass LNG. In addition, we had consolidated restricted cash and cash equivalents of $205.9 million, which were designated for the following purposes: $137.3 million for interest payments related to the Senior Notes; $3.5 million for Sabine Pass LNG's working capital; $55.9 million for Cheniere Partners' working capital; and $9.2 million for other restricted purposes.
In January 2012 we repaid the 2007 Term Loans due May 2012. In March 2012 we received net proceeds of $351.9 million in an underwritten public offering.
Cheniere Energy, Inc. is a Houston-based energy company primarily engaged in LNG related businesses, and owns and operates the Sabine Pass LNG terminal and Creole Trail pipeline in Louisiana. Cheniere is pursuing related business opportunities both upstream and downstream of the Sabine Pass LNG terminal. Additional information about Cheniere Energy, Inc. may be found on its web site at www.cheniere.com.
For additional information, please refer to the Cheniere Energy, Inc. Quarterly Report on Form 10-Q for the three-months ended March 31, 2012, filed with the Securities and Exchange Commission.
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's business strategy, plans and objectives and (ii) statements expressing beliefs and expectations regarding the development of Cheniere's LNG terminal and pipeline businesses, including liquefaction services. Although Cheniere 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's 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's 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 does not assume a duty to update these forward-looking statements.
(Financial Table Follows)
Cheniere Energy, Inc.
Selected Financial Information
(in thousands, except per share data) (1)
Three Months Ended
LNG terminal revenues
Marketing and trading
Oil and gas sales
Operating costs and expenses
General and administrative expenses
Depreciation, depletion and amortization
LNG terminal and pipeline operating expenses
LNG terminal and pipeline development expenses
Total operating costs and expenses
Income from operations
Interest expense, net
Loss on early extinguishment of debt
Other income (expense)
Income tax provision
Net loss per common share—basic and diluted
Weighted average number of common shares outstanding—basic and diluted
As of March 31,
As of December 31,
Cash and cash equivalents
Restricted cash and cash equivalents
Accounts and interest receivable
Prepaid expenses and other
Non-current restricted cash and cash equivalents
Property, plant and equipment, net
Debt issuance costs, net
Long-term debt (including related party debt), net of discount
Total liabilities and deficit
March 31, 2012
Pass LNG, L.P.
Cash and cash equivalents
Restricted cash and cash equivalents
Please refer to the Cheniere Energy, Inc. Quarterly Report on Form 10-Q for the three months ended March 31, 2012, filed with the Securities and Exchange Commission.
SOURCE Cheniere Energy, Inc.