Cheniere Energy Partners Reports Fourth Quarter and YE 2012 Results

     Cheniere Energy Partners Reports Fourth Quarter and YE 2012 Results

PR Newswire

HOUSTON, Feb. 22, 2013

HOUSTON, Feb. 22,2013 /PRNewswire/ -- For the quarter and year ended December
31, 2012, Cheniere Energy Partners, L.P. ("Cheniere Partners") (NYSE MKT: CQP)
reported a net loss of $63.5 million and $150.1 million, respectively,
compared to a net loss of $7.5 million and $31.0 million, respectively, for
the same periods in 2011. Results for the quarter and year ended December 31,
2012 were primarily impacted by increases in certain expenses related to the
liquefaction facilities we are developing and constructing at the Sabine Pass
LNG terminal adjacent to the existing regasification facilities (the
"Liquefaction Project").

For the quarter and year ended December31, 2012, results include significant
items of $45.1 million and $82.8 million, respectively, related to development
expenses primarily for the Liquefaction Project and losses due to the early
extinguishment of debt. Excluding these significant items, the adjusted net
loss for the quarter and year ended December 31, 2012 were $18.4 million and
$67.3 million, respectively. 

Overview of Recent Significant Events

  oIn October/November 2012, Sabine Pass LNG, L.P. ("Sabine Pass LNG")
    repurchased its $550.0 million 7.25% Senior Secured Notes due 2013 by
    issuing $420.0 million of 6.50% Senior Secured Notes due in 2020 and by
    Cheniere Partners selling 8.0 million common units in an underwritten
    public offering at a price of $25.07 per common unit for net cash proceeds
    of $194.0 million;
  oIn December 2012, Sabine Pass Liquefaction, LLC ("Sabine Pass
    Liquefaction") announced the commencement of the development of Train 5
    and Train 6 of the Liquefaction Project and that it has entered into an
    LNG sale and purchase agreement ("SPA") with Total Gas & Power North
    America, Inc. ("Total") under which Total has agreed to purchase
    approximately 2.0 million metric tons per annum ("mmtpa") of LNG volumes
    upon the commencement of Train 5 operations;
  oIn December 2012, Sabine Pass Liquefaction and Bechtel Oil, Gas and
    Chemicals, Inc. ("Bechtel") entered into a lump sum turnkey contract for
    the engineering, procurement and construction ("EPC") of Train 3 and Train
    4 of the Liquefaction Project; and
  oIn February 2013, Sabine Pass Liquefaction issued an aggregate principal
    amount of $1.5 billion of 5.625% Senior Secured Notes due 2021 (the
    "Sabine Liquefaction Notes"). Proceeds from the offering are intended to
    be used to pay capital costs incurred in connection with the construction
    of Train 1 and Train 2 of the Liquefaction Project in lieu of a portion of
    the commitments under Sabine Pass Liquefaction's $3.6 billion senior
    secured credit facility.

2012 Results

Cheniere Partners reported income from operations of $19.6 million and $63.5
million for the quarter and year ended December31, 2012, respectively,
compared to income from operations of $37.0 million and $144.6 million for the
comparable periods in 2011. The decrease in income from operations of $17.4
million and $81.1 million for the quarter and year ended December31, 2012,
compared to the comparable periods in 2011, was primarily due to increased
general and administrative costs incurred to manage the construction of the
Liquefaction Project, decreased revenue, and increased operating and
maintenance expense (including affiliate). 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, in which Sabine Pass Liquefaction is paying to Cheniere
Energy, Inc. a monthly fee based upon the capital expenditures incurred in the
previous month for the Liquefaction Project. These payments are being funded
from proceeds received from the Liquefaction Project's equity and debt
financings. Revenues for the year ended December 31, 2012, compared to the
comparable 2011 period, were impacted by decreased LNG cargo export loading
fee revenue, decreased revenues earned under the variable capacity rights
agreement with Cheniere Marketing, Inc., and a loss on LNG inventory needed to
restore the heating value of vaporized LNG to meet natural gas pipeline
specifications. Increases in operating and maintenance expense (including
affiliate expense) resulted from the loss incurred to purchase LNG to maintain
the cryogenic readiness of the Sabine Pass LNG terminal and increased dredging
services in 2012.

Liquefaction Project Update

We continue to make progress on the Liquefaction Project, which is being
developed for up to six natural gas liquefaction trains ("Trains"), each with
a nominal production capacity of approximately 4.5 mmtpa. The Trains are in
various stages of development.

  oTrain 1 and Train 2 have received all Federal Energy Regulatory Commission
    ("FERC") and U.S. Department of Energy ("DOE") approvals. We have secured
    approximately $5.7 billion of required financing to construct Train 1 and
    Train 2. We have issued a full notice to proceed to Bechtel and have
    commenced construction of Train 1 and Train 2 and the related new
    facilities needed to treat, liquefy, store and export natural gas. As of
    December 31, 2012, the overall project for Train 1 and Train 2 was
    approximately 18% complete. The estimated substantial completion dates
    for Train 1 and Train 2 are ahead of the contractual schedule for
    guaranteed substantial completion, and we anticipate that Train 1 will
    achieve initial LNG production in late 2015.
  oTrain 3 and Train 4 have received all FERC and DOE approvals, and we have
    entered into a lump sum turnkey EPC contract with Bechtel for Train 3 and
    Train 4. Construction of Train 3 and Train 4 and the related facilities
    is expected to commence upon, among other things, obtaining financing
    commitments sufficient to fund construction and making a positive final
    investment decision. We are in the process of securing the required
    financing for the construction of Train 3 and Train 4 and expect
    construction to begin in 2013.
  oWe recently began the development of Train 5 and Train 6. In September
    2012, we entered into an agreement with Total whereby Sabine Pass
    Liquefaction will gradually obtain access to Total's send-out capacity and
    other services provided under its terminal use agreement with Sabine Pass
    LNG that may be used to accommodate the development of Train 5 and Train
    6. Bechtel has begun preliminary engineering on Train 5 and Train 6, and
    we expect to initiate the regulatory approval process in the first half of
    2013. In December 2012, we entered into an SPA with Total under which
    Total has agreed to purchase approximately 2.0 mmtpa of LNG volumes upon
    the commencement of Train 5 operations.

Liquefaction Project Timeline
                                    Target Date
  Milestone                         Trains 1 & 2   Trains 3 & 4   Trains 5 & 6
                                                                  Initiating
• DOE export authorization          Received       Received       Filings

                                                                  1H13
• Definitive commercial agreements  Completed 7.7  Completed 8.3
  - BG Gulf Coast LNG, LLC          4.2 mmtpa      1.3 mmtpa
  - Gas Natural Fenosa              3.5 mmtpa
  - KOGAS                                          3.5 mmtpa
  - GAIL (India) Ltd.                              3.5 mmtpa
  - Total Gas & Power N.A.                                        2.0 mmtpa
• EPC contract                      Completed      Completed      TBD
• Financing commitments                            1H13           TBD
  - Equity                          Received
  - Debt                            Received
                                                                  Initiating
• FERC authorization                Received       Received       Filings

                                                                  1H13
  - Certificate to commence         Received       2013
  construction
• Commence construction             Completed      2013           TBD
• Commence operations               2015/2016      2016/2017      TBD

2013 Distributions

We estimate that the annualized distribution to common unitholders for fiscal
year 2013 will be $1.70 per unit.

Cheniere Partners owns 100 percent of the Sabine Pass LNG terminal located on
the Sabine Pass deep water shipping channel less than four miles from the Gulf
Coast. The Sabine Pass LNG terminal has regasification facilities that
include existing infrastructure of five LNG storage tanks with capacity of
approximately 16.9 billion cubic feet equivalent (Bcfe), two docks that can
accommodate vessels of up to 265,000 cubic meters and vaporizers with
regasification capacity of approximately 4.0 Bcf/d. Cheniere Partners is
developing natural gas liquefaction facilities at the Sabine Pass LNG terminal
adjacent to the existing regasification facilities (the "Liquefaction
Project"). Cheniere Partners plans to construct over time up to six natural
gas liquefaction trains ("Trains", each in sequence, "Train 1", "Train 2",
"Train 3", "Train 4", "Train 5" and "Train 6"), which are in various stages of
development. Each Train has a nominal annual capacity of approximately 4.5
mmtpa. Cheniere Partners' wholly owned subsidiary, Sabine Pass Liquefaction,
LLC ("Sabine Pass Liquefaction"), has entered into lump sum turnkey contracts
for the engineering, procurement and construction of Train 1 and Train 2 and
Train 3 and Train 4 with Bechtel Oil, Gas and Chemicals, Inc. ("Bechtel") in
November 2011 and December 2012, respectively. Sabine Pass Liquefaction has
commenced construction of Train 1 and Train 2 and the related new facilities
needed to treat, liquefy, store and export natural gas. Construction of Train
3 and 4 and the related facilities is expected to commence upon, among other
things, obtaining financing commitments sufficient to fund construction of
such Trains and making a positive final investment decision. Sabine Pass
Liquefaction recently began the development of Train 5 and Train 6 and expects
to commence the regulatory approval process in the first half of 2013. Sabine
Pass Liquefaction has also entered into five LNG sale and purchase agreements
("SPAs"). The customers include BG Gulf Coast LNG, LLC ("BG") for 5.5 mmtpa,
Gas Natural Aprovisionamientos SDG S.A. ("Gas Natural Fenosa") for 3.5 mmtpa,
Korea Gas Corporation ("KOGAS") for 3.5 mmtpa, GAIL (India) Ltd. ("GAIL") for
3.5 mmtpa and Total Gas & Power North America, Inc. ("Total") for 2.0 mmtpa.
In addition, Sabine Pass Liquefaction has entered into an SPA with Cheniere
Marketing, LLC ("Cheniere Marketing") for up to 2.0 mmtpa of LNG that is
produced but not already committed to third parties. The BG and Cheniere
Marketing SPAs commence with the start of Train 1 operations and the Gas
Natural Fenosa SPA commences with the start of Train 2 operations. The KOGAS,
GAIL and Total SPAs commence with the start of Train 3, Train 4 and Train 5
operations, respectively. Cheniere Partners has placed documentation
pertaining to the Liquefaction Project, including the applications and
supporting studies, on its website located at
http://www.cheniereenergypartners.com.

For additional information, please refer to the Cheniere Energy Partners, L.P.
website at www.cheniereenergypartners.com and Annual Report on Form 10-K for
the year ended December 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 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       Year Ended

                            December31,             December31,
                            2012 ^(2)    2011 ^(2)   2012 ^(2)     2011 ^(2)
Revenues
Revenues                    $ 66,200     $ 68,669    $ 256,354     $ 269,183
Revenues - affiliate        1,100        2,154       7,973         14,607
Total revenues              67,300       70,823      264,327       283,790
Operating costs and
expenses
Development expense         2,190        5,697       37,559        32,448
Development expense -       312          1,279       2,677         4,025
affiliate
Operating and maintenance   15,614       5,949       35,457        21,827
expense
Operating and maintenance   3,886        3,195       16,300        11,918
expense - affiliate
Depreciation, depletion and 10,654       10,697      42,551        42,943
amortization
General and administrative  2,635        1,467       10,303        5,534
expense
General and administrative  12,407       5,496       55,940        20,469
expense-affiliate
Total operating costs and   47,698       33,780      200,787       139,164
expenses
Income from operations      19,602       37,043      63,540        144,626
Interest expense, net ^(4)  (41,092)     (43,475)    (171,646)     (173,590)
Loss on early               (42,587)     —           (42,587)      —
extinguishment of debt
Derivative gain (loss)      346          (1,087)     58            (2,251)
Other                       210          57          499           196
Net income (loss)           $ (63,521)   $ (7,462)   $ (150,136)   $ (31,019)
Basic and diluted net
income (loss) per common    $ (0.06)     $ 0.30      $ 0.27        $ 1.23
unit
Weighted average number of
common units outstanding
used for basic and diluted  39,488       31,003      33,470        27,910
net income (loss) per
common unit calculation





                                December 31, 2012 ^(3)  December 31, 2011 ^(3)
Cash and cash equivalents       $        419,292        $        81,415
Restricted cash and cash        92,519                  13,732
equivalents
LNG Inventory                   2,625                   473
Other current assets ^(4)       18,108                  13,890
Non-current restricted cash and 272,425                 82,394
cash equivalents
Property, plant and equipment,  2,704,895               1,514,416
net
Debt issuance costs, net        220,949                 17,622
Other assets                    17,465                  13,358
Total assets                    $        3,748,278      $        1,737,300
Current liabilities ^(4)        $        155,410        51,818
Long-term debt, net of discount 2,167,113               2,192,418
Deferred revenue, including     36,220                  37,766
affiliate
Long-term derivative liability  26,424                  —
Other liabilities ^(4)          303                     317
Total partners' deficit         1,362,808               (545,019)
Total liabilities and partners' $        3,748,278      $        1,737,300
deficit

    Please refer to the Cheniere Energy Partners, L.P. Annual Report on Form
(1) 10-K for the year ended December 31, 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 months and year ended December 31,
    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.cheniereenergypartners.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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