Cheniere Energy Partners Reports Third Quarter 2012 Results

         Cheniere Energy Partners Reports Third Quarter 2012 Results

PR Newswire

HOUSTON, Nov. 2, 2012

HOUSTON, Nov. 2, 2012 /PRNewswire/ -- For the three and nine months ended
September30, 2012, Cheniere Energy Partners, L.P. ("Cheniere Partners") (NYSE
MKT: CQP) reported a net loss of $42.4 million and $86.6 million,
respectively, compared to a net loss of $14.5 million and $23.6 million for
the comparable 2011 periods. Results for the three and nine months ended
September 2012 were primarily impacted by increases in certain expenses
related to the liquefaction facilities we are developing and constructing
adjacent to the Sabine Pass LNG terminal (the "Liquefaction Project").

Overview of Recent Significant Events

  oIn July 2012, we closed on a $3.6 billion senior secured credit facility
    that will be used to fund a portion of the costs of developing,
    constructing and placing into service LNG trains 1 and 2 of the
    Liquefaction Project. We also received from Cheniere Energy, Inc. the
    remaining $333 million of its $500 million equity commitment in our Class
    B Units.
  oIn August 2012, Blackstone CQP Holdco LP ("Blackstone") purchased its
    initial $500 million of Class B Units from us, and we issued a full notice
    to proceed to Bechtel to construct LNG trains 1 and 2 of the Liquefaction
    Project. As of October 31, 2012, Blackstone purchased $800 million
    additional Class B Units for an aggregate investment of $1.3 billion.
  oIn September 2012, we sold 8.0 million common units in an underwritten
    public offering at a price of $25.07 per common unit for net cash proceeds
    of approximately $194 million.
  oIn October 2012, Sabine Pass LNG, L.P. ("Sabine Pass LNG") repurchased
    approximately 97% of the outstanding $550 million 7.25% Senior Secured
    Notes due 2013 through a tender offer. The repurchase was funded from an
    equity contribution from Cheniere Partners and from newly issued $420
    million 6.50% Senior Secured Notes due in 2020.

Results

Cheniere Partners reported income from operations of $0.8 million and $43.9
million for the three and nine months ended September30, 2012, compared to
income from operations of $29.5 million and $107.6 million for the comparable
periods in 2011. The decrease in income from operations of $28.7 million for
the quarter ended September30, 2012, compared to the comparable period in
2011, was primarily due to increased general and administrative costs incurred
to manage the construction of the Liquefaction Project, partially offset by
decreased development costs due to the costs of LNG trains 1 and 2 of the
Liquefaction Project satisfying the criteria for capitalization in June 2012.
The general and administrative expenses incurred to manage the construction of
the Liquefaction Project primarily resulted from a management services
agreement entered into by Sabine Pass Liquefaction, LLC ("Sabine Pass
Liquefaction"), in which Sabine Pass Liquefaction is required to pay a monthly
fee based upon the capital expenditures incurred in the previous month for the
Liquefaction Project to Cheniere Energy, Inc. These payments are being funded
from proceeds received from the Liquefaction Project's equity and debt
financings. The decrease in income from operations of $63.7 million for the
nine months ended September30, 2012, compared to the comparable period in
2011, was primarily due to increased development expenses, increased costs
incurred to manage the construction of the Liquefaction Project and decreased
revenues (including affiliate).

Revenues for the nine months ended September 30, 2012, compared to the
comparable 2011 period, were negatively impacted by decreased LNG cargo export
loading fee revenue, decreased revenues earned under the variable capacity
rights agreement with Cheniere Marketing, and a loss on LNG inventory needed
to restore the heating value of vaporized LNG to meet natural gas pipeline
specifications.

Liquefaction Project Update

We continue to make progress on the Liquefaction Project, which is being
developed for up to four LNG trains, each with a nominal production capability
of approximately 4.5 mtpa.

In July 2012, we secured financing of approximately $5.6 billion, including
$2.0 billion of equity and $3.6 billion of debt commitments, for the
development, construction and placing into service LNG trains 1 and 2. We
have issued a full notice to proceed to Bechtel and construction has commenced
for LNG trains 1 and 2. LNG exports from the Sabine Pass LNG terminal are
anticipated to commence in late 2015, with LNG train 2 commencing operations
approximately six to nine months thereafter.

Commencement of construction for LNG trains 3 and 4 is subject, but not
limited to, entering into an engineering, procurement and construction
agreement ("EPC"), reaching a positive final investment decision and obtaining
financing. We have engaged Bechtel to complete front-end engineering and
design work for LNG trains 3 and 4 and have begun negotiating a lump sum
turnkey EPC contract, which is expected to be finalized by the end of the
fourth quarter. Construction of LNG trains 3 and 4 is expected 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             Received            2013
  construction
• Commence construction                 Complete            2013
• Commence operations                   2015/2016           2016/2017



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 November 1, 2012, and the
related general partner distribution on November 14, 2012.

Cheniere Partners owns 100 percent of the Sabine Pass LNG terminal located on
the Sabine Pass Channel in western Cameron Parish, Louisiana. The Sabine Pass
LNG terminal has regasification and send-out capacity of 4.0 billion cubic
feet per day (Bcf/d) and storage capacity of 16.9 billion cubic feet
equivalent (Bcfe).

For additional information, please refer to the Cheniere Energy Partners, L.P.
website at www.cheniereenergypartners.com and Quarterly Report on Form 10-Q
for the period ended September 30, 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 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, (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.
Selected Financial Information
(in thousands, except per unit data) ^(1)
                            Three Months Ended        Nine Months Ended
                            September 30,             September 30,
                            2012 ^(2)    2011 ^(2)    2012 ^(2)    2011 ^(2)
Revenues
Revenues                    $ 62,429     $ 63,669     $ 190,154    $ 200,514
Revenues—affiliate          3,879        1,238        6,872        12,452
Total revenues              66,308       64,907       197,026      212,966
Expenses
Operating and maintenance   6,586        6,288        19,843       15,878
expense
Operating and maintenance   6,476        2,612        12,414       8,723
expense—affiliate
Depreciation expense        10,652       10,766       31,897       32,245
Development expense         4,229        8,971        35,369       26,751
Development                 102          923          2,365        2,746
expense—affiliate
General and administrative  4,248        867          7,668        4,068
expense
General and administrative  33,243       4,957        43,532       14,973
expense—affiliate
Total expenses              65,536       35,384       153,088      105,384
Income from operations      772          29,523       43,938       107,582
Other income (expense)
Interest expense, net       (43,626)     (43,319)     (130,554)    (130,115)
Derivative gain (loss), net 287          (716)        (288)        (1,164)
Other                       145          33           289          140)
Total other expense         (43,194)     (44,002)     (130,553)    (131,139)
Net loss                    $ (42,422)   $ (14,479)   $ (86,615)   $ (23,557)
Basic and diluted net       $ 0.04       $ 0.29       $ 0.36       $ 0.93
income per common unit
Weighted average number of
common units outstanding
used for basic and diluted  31,997       27,408       31,449       26,867
net income per common unit
calculation



                                       As of September 30,  As of December 31,
                                       2012 ^(3)            2011 ^(3)
Cash and cash equivalents              $    369,100         $   81,415
Restricted cash and cash equivalents   123,297              13,732
LNG Inventory                          5,701                473
Other current assets ^(4)              38,269               13,890
Non-current restricted cash and cash   267,201              82,394
equivalents
Property, plant and equipment, net     2,414,003            1,514,416
Debt issuance costs, net               222,144              17,622
Other assets                           31,140               13,358
Total assets                           $    3,470,855       $   1,737,300
Current liabilities ^(4)               $    177,531         $   51,818
Long-term debt, net of discount        2,295,939            2,192,418
Deferred revenue, including affiliate  37,220               37,766
Long-term derivative liabilities       29,384               —
Other liabilities ^(4)                 306                  317
Total partners' capital (deficit)      930,475              (545,019)
Total liabilities and partners'        $    3,470,855       $   1,737,300
capital (deficit)



    Please refer to Cheniere Energy Partners, L.P. Quarterly Report on Form
(1) 10-Q for the period ended September 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 nine months ended September
    30, 2012 and 2011.
(3) Consolidated balance sheets of Cheniere Energy Partners, L.P. and its
    consolidated subsidiaries.
(4) Amounts include transactions between Cheniere Energy Partners, L.P. 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
 
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