Cheniere Energy Partners Reports Fourth Quarter and Year End 2013 Results

  Cheniere Energy Partners Reports Fourth Quarter and Year End 2013 Results

PR Newswire

HOUSTON, Feb. 21, 2014

HOUSTON, Feb. 21, 2014 /PRNewswire/ --Cheniere Energy Partners, L.P.
("Cheniere Partners") (NYSE MKT: CQP) reported a net loss of $61.3 million and
$258.1 million for the three months and year ended December 31, 2013,
respectively, compared to a net loss of $68.6 million and $175.4 million for
the same periods in 2012, respectively. Significant items for the three
months and year ended December 31, 2013 were $26.7 million and $60.9 million,
respectively, compared to $44.7 million and $82.8 million, respectively, for
the comparable 2012 periods. Significant items for the quarter related to
development expenses, derivative gains/losses and losses on early
extinguishment of debt. Development expenses were primarily for the
liquefaction facilities we are developing through Sabine Pass Liquefaction,
LLC ("Sabine Pass Liquefaction") at the Sabine Pass LNG terminal adjacent to
the existing regasification facilities (the "Liquefaction Project").
Derivative gains/losses were primarily the result of the change in fair value
of Sabine Pass Liquefaction's interest rate derivatives to hedge the exposure
to volatility in a portion of the floating-rate interest payments under the
four credit facilities. Loss on early extinguishment of debt was related to
Sabine Pass Liquefaction amending and replacing its $3.6 billion credit
facility with four credit facilities aggregating $5.9 billion in May 2013 and
refinancing a portion of the credit facilities in November 2013, resulting in
aggregate available capacity of approximately $5.0 billion.

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 mtpa. We have received
Federal Energy Regulatory Commission ("FERC") and Department of Energy ("DOE")
approvals for Trains 1 through 4, and we have filed all required regulatory
applications with the FERC and DOE to develop Trains 5 and 6.

The Trains are in various stages of development.

  oConstruction on Trains 1 and 2 began in August 2012, and as of January 31,
    2014, the overall project for Trains 1 and 2 was approximately 57.1%
    complete, which is ahead of the contractual schedule. Based on our
    current construction schedule, we anticipate that Train 1 will produce LNG
    by late 2015.
  oConstruction on Trains 3 and 4 began in May 2013, and as of January 31,
    2014, the overall project for Trains 3 and 4 was approximately 21.6%
    complete. To date, soil stabilization has been completed and pile
    driving, the next critical path item, is underway. We expect Trains 3 and
    4 to become operational in late 2016 and 2017, respectively.
  oWe continue to make progress with the development of Trains 5 and 6. To
    date we have completed two LNG SPAs for approximately 3.75 mtpa in
    aggregate of LNG volumes that commence with the date of first commercial
    delivery for Train 5. In September 2013, we filed a complete application
    with the FERC. We have received authorizations from the DOE to export 503
    Bcf of LNG volumes from Trains 5 and 6 to FTA countries. Non-FTA
    authorization is pending.



Liquefaction Project Timeline
                                    Target Date
                                    Trains         Trains     Trains
Milestone
                                    1 & 2          3 & 4      5 & 6
                                                              Received FTA
DOE export authorization            Received       Received
                                                              Pending Non-FTA
                                    Completed 7.7  Completed  T5: Completed
Definitive commercial agreements    mtpa           8.3 mtpa
                                                              T6: 2014
- 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
- Total Gas & Power N.A.                                      2.0 mtpa
- Centrica plc                                                1.75 mtpa
EPC contract                        Completed      Completed  2015
Financing                                                     2015
- Equity                            Completed      Completed
- Debt commitments                  Received       Received
FERC authorization
- FERC Order                        Received       Received   2015
- Certificate to commence           Received       Received
construction
Issue Notice to Proceed             Completed      Completed  2015
Commence operations                 2015/2016      2016/2017  2018/2019

Quarter and Year End 2013 Results

For the quarter and year ended December 31, 2013, Cheniere Partners reported
income from operations of $5.4 million and a loss from operations of $32.7
million, respectively, compared to income of $14.5 million and $38.2 million
for the respective comparable periods in 2012. Net operating losses were
primarily affected by operating and maintenance expenses and general and
administrative expenses. The increase in operating and maintenance expenses
of $34.4 million for the year ended December 31, 2013 compared to the
comparable 2012 period resulted primarily from costs incurred to purchase LNG
to maintain the cryogenic readiness of the regasification facilities at the
Sabine Pass LNG terminal, increased LNG terminal maintenance and repair costs,
increased fuel costs at the Sabine Pass LNG terminal and increased costs to
manage the operation and maintenance of the regasification facilities at the
Sabine Pass LNG terminal under Sabine Pass LNG's long-term operation and
maintenance agreement with a wholly owned subsidiary of Cheniere Partners.

Increases in general and administrative expenses of $15.5 million and $68.0
million for the three months and year ended December 31, 2013, respectively,
compared to the comparable 2012 periods were primarily due to increased costs
incurred to manage the construction of Trains 1 through 4. Sabine Pass
Liquefaction entered into a management services agreement in which it is
required to pay a wholly owned subsidiary of Cheniere Energy, Inc. ("Cheniere
Energy") a monthly fee based upon the capital expenditures incurred in the
previous month for the Liquefaction Project. For the three months and year
ended December 31, 2013, the costs incurred to manage the construction of
Trains 1 through 4 were $19.7 million and $92.6 million, respectively. These
payments are funded from proceeds received from the equity and debt financings
for the Liquefaction Project.

Distributions to Unitholders

We will pay a cash distribution per common unit of $0.425 to unitholders of
record as of February 3, 2014, and the related general partner distribution on
February 14, 2014.

We estimate that the annualized distribution to common unitholders for fiscal
year 2014 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 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
with capacity 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 Trains, which are in various stages of development. Each
Train is expected to have a nominal production capacity of approximately 4.5
mtpa. The overall project completion of Trains 1 and 2 is approximately 57.1%
as of January 31, 2014. The overall project completion of Trains 3 and 4 is
approximately 21.6% as of January 31, 2014. Sabine Pass Liquefaction recently
began the development of Trains 5 and 6 and commenced the regulatory process
in February 2013. Sabine Pass Liquefaction has entered into six third-party
LNG sale and purchase agreements ("SPAs") that in the aggregate equate to
19.75 mtpa and commence with the date of first commercial delivery of Trains 1
through 5 as specified in the respective SPAs. 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 fiscal year ended December 31, 2013, 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 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
                       December 31,                December 31,
                       2013           2012         2013           2012
Revenues
Revenues               $ 66,199       $ 66,201     $ 265,251      $ 256,361
Revenues—affiliate     800            1,164        2,940          8,137
Total revenues         66,999         67,365       268,191        264,498
Expenses
Operating and          7,206          16,229       59,957         36,292
maintenance expense
Operating and
maintenance            5,770          4,054        29,304         18,540
expense—affiliate
Depreciation expense   14,336         14,653       57,486         57,788
Development expense    3,165          2,190        11,322         37,559
Development            207            312          1,402          2,677
expense—affiliate
General and
administrative         3,049          3,081        11,570         12,316
expense
General and
administrative         27,838         12,336       129,836        61,081
expense—affiliate
Total expenses         61,571         52,855       300,877        226,253
Income (loss) from     5,428          14,510       (32,686)       38,245
operations
Other income
(expense)
Interest expense, net  (43,594)       (41,092)     (178,400)      (171,646)
Loss on early
extinguishment of      (51,066)       (42,587)     (131,576)      (42,587)
debt
Derivative gain        27,742         346          83,448         58
(loss), net
Other                  224            210          1,097          499
Total other expense    (66,694)       (83,123)     (225,431)      (213,676)
Net loss               $ (61,266)     $ (68,613)   $ (258,117)    $ (175,431)
Basic and diluted net
income (loss) per      $ (0.01)       $ (0.06)     $ (0.03)       $ 0.27
common unit
Weighted average
number of common
units outstanding
used for basic and     57,079         39,488       54,235         33,470
diluted net income
per common unit
calculation



                                         December 31, 2013  December 31, 2012
Cash and cash equivalents                $   351,032        $   419,292
Restricted cash and cash equivalents     227,652            92,519
LNG inventory                            10,430             2,625
Other current assets ^(2)                24,014             18,687
Non-current restricted cash and cash     1,025,056          272,425
equivalents
Property, plant and equipment, net       6,383,939          3,219,592
Debt issuance costs, net                 313,944            220,949
Non-current derivative assets            98,123             —
Other assets                             82,593             19,698
Total assets                             $   8,516,783      $   4,265,787
Current liabilities ^(2)                 265,887            155,836
Long-term debt, net of discount          6,576,273          2,167,113
Deferred revenue, including affiliate    17,500             21,500
Long-term derivative liability           —                  26,424
Other liabilities ^(2)                   17,379             14,936
Total partners' capital                  1,639,744          1,879,978
Total liabilities and partners' capital  $   8,516,783      $   4,265,787

    Please refer to the Cheniere Energy Partners, L.P. Annual Report on Form
(1) 10-K for the fiscal year ended December 31, 2013, filed with the
    Securities and Exchange Commission.
(2) 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: Randy Bhatia: 713-375-5479, Christina Burke: 713-375-5104;
Media: Diane Haggard: 713-375-5259
 
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