Cheniere Energy Partners Reports Second Quarter 2012 Results

         Cheniere Energy Partners Reports Second Quarter 2012 Results

PR Newswire

HOUSTON, Aug. 3, 2012

HOUSTON, Aug. 3, 2012  /PRNewswire/ -- For the three and six months ended June
30, 2012, Cheniere Energy Partners, L.P. ("Cheniere Partners") (NYSE MKT: CQP)
reported a net loss of $24.9 million and $44.2 million, respectively, compared
to net loss of $6.9 million and $9.1 million for the same periods in 2011,
respectively.  Results included development expenses for the Sabine Pass
Liquefaction Project ("Liquefaction Project") of $15.5 million and $33.4
million for the respective three and six months ended June 30, 2012.   

Overview of Recent Significant 2012 Events

  o In April 2012, Sabine Pass Liquefaction, LLC ("SPL") received
    authorization under Section 3 of the Natural Gas Act (the "Order") from
    the FERC to site, construct and operate facilities for the liquefaction
    and export of domestically produced natural gas at the Sabine Pass LNG
    terminal located in Cameron Parish, Louisiana.  The Order authorizes the
    development of up to four modular LNG trains.
  o In May 2012, Cheniere Partners received commitments for $2.0 billion of
    equity financing for the Liquefaction Project.  Cheniere Partners and
    Blackstone CQP Holdco LP ("Blackstone") entered into a unit purchase
    agreement whereby Cheniere Partners agreed to sell to Blackstone in a
    private placement 100 million Class B Units of Cheniere Partners for $1.5
    billion. Cheniere Partners and Cheniere Energy, Inc. ("CEI") also entered
    into a unit purchase agreement whereby CEI agreed to purchase 33.3 million
    Class B Units for $500 million.
  o In June 2012, CEI purchased $167 million of Class B Units and Cheniere
    Partners issued a limited notice to proceed to Bechtel Oil, Gas and
    Chemicals, Inc. ("Bechtel").
  o In July 2012, Cheniere Partners announced that its Board of Directors made
    a positive final investment decision on the development and construction
    of the first two liquefaction trains.
  o In July 2012, Cheniere Partners closed on a $3.6 billion credit facility
    that will be used to fund the first two trains of the Liquefaction
    Project.  The credit facility has a 7 year maturity and interest rate of
    LIBOR plus 350 basis points during construction and then steps up to LIBOR
    plus 375 basis points during operations.
  o In July 2012, CEI purchased the remaining $333 million of its $500 million
    equity commitment in Class B Units from Cheniere Partners.   

Results

Cheniere Partners reported income from operations of $18.3 million and $43.2
million for the three and six months ended June 30, 2012, compared to income
from operations of $36.9 million and $78.1 million for the comparable periods
in 2011.  The decrease in income from operations of $18.7 million for the
quarter ended June 30, 2012 compared to the comparable period in 2011 was
primarily due to a decrease in revenues (including affiliate) of $12.2
million, an increase in development expenses (including affiliate) of $3.4
million and an increase in operating and maintenance expenses (including
affiliate) of $2.7 million.  The decrease in income from operations of $34.9
million for the six months ended June 30, 2012 compared to the comparable
period in 2011 was primarily due to a decrease in revenues (including
affiliate) of $17.4 million, an increase in development expenses (including
affiliate) of $13.8 million and an increase in operating and maintenance
expenses (including affiliate) of $3.5 million. 

Revenues were impacted by decreased LNG cargo export loading fee revenue,
decreased revenues earned under the variable capacity rights agreement
("VCRA") with Cheniere Marketing, and a provision for loss on a firm purchase
commitment for LNG inventory needed to restore the heating value of vaporized
LNG to meet natural gas pipeline specifications.  Development expenses
(including affiliate) are related to the Liquefaction Project.  Operating and
maintenance expenses (including affiliate) increased primarily due to
maintenance dredging in the second 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.

In June 2012, Cheniere Partners issued a Limited Notice to Proceed to Bechtel
under the engineering, procurement and construction contract to proceed with
site preparation that was permitted in May 2012 by FERC, as well as to
continue with detailed engineering and limited procurement activities for the
first two liquefaction trains being developed.

In July 2012, Cheniere Partners closed on a project credit facility of $3.6
billion. Including the recently announced $2.0 billion of equity commitments,
Cheniere Partners has now secured financing of approximately $5.6 billion for
the construction of the first two trains of the Liquefaction Project. Cheniere
Partners' Board of Directors has made a positive final investment decision on
the development and construction of the first two liquefaction trains. 
Cheniere Partners  has received the remaining $333 million of the $500 million
of funding through the purchase of 22.2 million Class B Units by CEI. Cheniere
Partners will issue a full notice to proceed to Bechtel upon the receipt of
initial funding from Blackstone.

LNG exports from the Sabine Pass LNG terminal are anticipated to commence as
early as 2015, with the second liquefaction train commencing operations
approximately six to nine months thereafter.

Commencement of construction for liquefaction trains three and four is
subject, but not limited to, entering into an engineering, procurement and
construction agreement, reaching a positive final investment decision and
obtaining financing. Cheniere Partners has engaged Bechtel to complete
front-end engineering and design work for the third and fourth liquefaction
trains and has begun negotiating a lump sum turnkey contract with Bechtel. 
Construction for liquefaction trains three and four is targeted to begin in
2013.

Summary Liquefaction Project Timeline 

                                        Target Date
Milestone                               Trains 1 & 2        Trains 3 & 4
DOE export authorization                Received            Received
Definitive commercial agreements        Completed 7.7 mtpa  Completed 8.3 mtpa
- BG Gulf Coast LNG, LLC                4.2 mtpa            1.3 mtpa
- Gas Natural Fenosa                    3.5 mtpa
- KOGAS                                                     3.5 mtpa
- GAIL (India) Ltd.                                         3.5 mtpa
EPC contract                            Complete            4Q12
Financing commitments                                       1Q13
- Equity                                Received
- Debt                                  Received
FERC authorization                      Received            Received
- Certificate to commence construction  Received            2013
Issue full notice to proceed to         3Q12                2013
Bechtel
Commence operations                     2015/2016           2017/2018

 

2012 Distributions

We estimate that the annualized distribution to common unitholders for fiscal
year 2012 will be $1.70 per unit.  We will pay a cash distribution per common
unit of $0.425 to unitholders of record as of August 1, 2012, and the related
general partner distribution on August 14, 2012. 

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 4.5 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, including the construction and operation of
liquefaction facilities (ii) statements regarding our 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, and (v) statements regarding potential
financing arrangements. 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       Six Months Ended
                                  June 30,                 June 30,
                                  2012 ^(2)    2011 ^(2)   2012 ^(2)    2011 ^(2)
Revenues
Revenues                          $ 60,767     $ 67,177    $ 127,725    $ 136,845
Revenues—affiliate                629          6,432       2,993        11,213
Total revenues                    61,396       73,609      130,718      148,058
Expenses
Operating and maintenance expense 7,144        3,904       13,256       9,590
Operating and maintenance         2,941        3,519       5,939        6,111
expense—affiliate
Depreciation expense              10,616       10,743      21,245       21,480
Development expense               14,472       11,163      31,141       17,780
Development  expense—affiliate    1,031        958         2,262        1,823
General and administrative        1,740        1,430       3,420        3,201
expense
General and                       5,177        4,960       10,289       10,015
administrative  expense—affiliate
Total expenses                    43,121       36,677      87,552       70,000
Income from operations            18,275       36,932      43,166       78,058
Other income (expense)
Interest expense, net             (43,458)     (43,399)    (86,916)     (86,796)
Derivative gain (loss), net       261          (448)       (575)        (448)
Other                             61           47          132          108
Total other expense               (43,136)     (43,800)    (87,359)     (87,136)
Net income (loss)                 $ (24,861)   $ (6,868)   $ (44,193)   $ (9,078)
Basic and diluted net income per  $ 0.17       $ 0.32      $ 0.40       $ 0.66
common unit
Weighted average number of common
units outstanding used for basic  31,328       26,754      31,173       26,416
and diluted net income per common
unit calculation

 

                                            As of June 30,  As of December 31,
                                            2012 ^(3)       2011 ^(3)
Cash and cash equivalents                   $  170,951      $   81,415
Restricted cash and cash equivalents        13,732          13,732
LNG Inventory                               621             473
Other current assets ^(4)                   13,614          13,890
Non-current restricted cash and cash        82,394          82,394
equivalents
Property, plant and equipment, net          1,540,874       1,514,416
Debt issuance costs, net                    15,437          17,622
Other assets                                35,376          13,358
Total assets                                $  1,873,000    $   1,737,300
Current liabilities ^(4)                    $  81,911       $   51,818
Long-term debt, net of discount             2,194,765       2,192,418
Deferred revenue, including affiliate       38,220          37,766
Other liabilities ^(4)                      311             317
Total partners' deficit                     (442,206)       (545,019)
Total liabilities and partners' deficit     $  1,873,000    $   1,737,300

    Please refer to Cheniere Energy Partners, L.P. Quarterly Report on Form
(1) 10-Q for the period ended June 30, 2012, filed with the Securities and
    Exchange Commission.
    Consolidated operating results of Cheniere Energy Partners, L.P. and its
(2) consolidated subsidiaries for the three and six months ended June 30, 2012
    and 2011.
(3) Consolidated balance sheets of Cheniere Energy Partners, L.P. and its
    consolidated subsidiaries.
(4) Amounts include transactions between Cheniere Partners and Cheniere
    Energy, Inc. or subsidiaries of Cheniere Energy, Inc.

 

SOURCE Cheniere Energy Partners, L.P.

Website: http://www.cheniere.com
Contact: Investors, Christina Burke, +1-713-375-5104, or Nancy Bui,
+1-713-375-5280, or Media, Diane Haggard, +1-713-375-5259