Cheniere Energy Partners, L.P. Reports First Quarter 2014 Results PR Newswire HOUSTON, May 1, 2014 HOUSTON, May 1, 2014 /PRNewswire/ -- Cheniere Energy Partners, L.P. ("Cheniere Partners") (NYSE MKT: CQP) reported a net loss of $69.7 million for the three months ended March 31, 2014, compared to a net loss of $51.7 million for the same period in 2013. Significant items for the three months ended March 31, 2014 were $38.3 million, compared to $21.4 million for the comparable 2013 period. Significant items for the quarter related to development expenses and derivative losses. 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 losses were primarily the result of the change in fair value of Sabine Pass Liquefaction's interest rate derivatives to hedge exposure to volatility in a portion of the floating-rate interest payments under the four Sabine Pass Liquefaction credit facilities. Overview of Recent Significant Events oIn April 2014, Sabine Pass Liquefaction entered into a $325.0 million senior letter of credit and reimbursement agreement (the "Sabine Pass Liquefaction Senior LC Agreement") that it intends to use for the issuance of letters of credit on behalf of Sabine Pass Liquefaction for certain working capital requirements related to the Sabine Pass Liquefaction Project. 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 an expected 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 March 31, 2014, the overall project for Trains 1 and 2 was approximately 63% complete, which is ahead of the contractual schedule. Based on our current construction schedule, we anticipate that Train 1 will produce liquefied natural gas ("LNG") as early as late 2015. oConstruction on Trains 3 and 4 began in May 2013, and as of March 31, 2014, the overall project for Trains 3 and 4 was approximately 27% complete, which is ahead of the contractual schedule. 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 sale and purchase agreements ("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 free trade agreement ("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 Definitive commercial Completed 7.7 Completed 8.3 T5: Completed agreements mtpa 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 First Quarter 2014 Results For the quarter ended March 31, 2014, Cheniere Partners reported income from operations of $5.1 million, as compared to $5.7 million during the quarter ended March 31, 2013. General and administrative expense (including affiliate) increased $3.5 million in the three months ended March31, 2014 as compared to the three months ended March31, 2013 primarily as a result of increased costs incurred to manage the construction of Trains 1 through 4 of the Liquefaction Project, which resulted from a management services agreement entered into by Sabine Pass Liquefaction, under which Sabine Pass Liquefaction is required to pay a wholly owned subsidiary of Cheniere Energy, Inc. ("Cheniere") a monthly fee based upon the capital expenditures incurred in the previous month for Trains 1 through 4 of the Liquefaction Project until substantial completion of each Train. Operating and maintenance expense (including affiliate) decreased $1.6 million in the three months ended March31, 2014 as compared to the three months ended March31, 2013 primarily as a result of decreased costs to manage the operation of our LNG terminal under our long-term operation and maintenance agreement with a wholly owned subsidiary of Cheniere. Distributions to Unitholders We estimate that the annualized distribution to common unitholders for fiscal year 2014 will be $1.70 per unit. We will pay a cash distribution per common unit of $0.425 to unitholders of record as of May 1, 2014, and the related general partner distribution on May 15, 2014. 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 includes 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. 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 63% as of March 31, 2014. The overall project completion of Trains 3 and 4 is approximately 27% as of March 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 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 Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, 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. Cheniere Energy Partners, L.P. Selected Financial Information (in thousands, except per unit data) ^(1) (unaudited) Three Months Ended March 31, 2014 2013 Revenues Revenues $ 66,449 $ 65,563 Revenues—affiliate 772 545 Total revenues 67,221 66,108 Expenses Operating and maintenance expense 9,219 8,286 Operating and maintenance expense—affiliate 4,431 6,923 Depreciation expense 14,318 14,304 Development expense 3,496 3,484 Development expense—affiliate 152 451 General and administrative expense 3,366 3,774 General and administrative expense—affiliate 27,153 23,216 Total expenses 62,135 60,438 Income from operations 5,086 5,670 Other income (expense) Interest expense, net (40,270) (40,262) Loss on early extinguishment of debt — — Derivative loss, net (34,681) (17,468) Other income 132 327 Total other expense (74,819) (57,403) Net loss $ (69,733) $ (51,733) Net loss attributable to the Creole Trail Pipeline $ — $ (9,246) Business Net loss attributable to partners (69,733) (42,487) Basic and diluted net income (loss) per common unit $ (0.06) $ 0.10 Weighted average number of common units outstanding used for basic and diluted net income (loss) per 57,079 45,547 common unit calculation March 31, 2014 December 31, 2013 (unaudited) Cash and cash equivalents $ 325,342 $ 351,032 Restricted cash and cash equivalents 176,518 227,652 LNG inventory 4,072 10,430 Other current assets ^(2) 24,159 24,014 Non-current restricted cash and cash 323,728 1,025,056 equivalents Property, plant and equipment, net 7,028,192 6,383,939 Debt issuance costs, net 302,439 313,944 Non-current derivative assets 71,170 98,123 Other assets 117,489 82,593 Total assets $ 8,373,109 $ 8,516,783 Current liabilities ^(2) $ 200,662 265,887 Long-term debt, net of discount 6,578,350 6,576,273 Deferred revenue, including affiliate 16,500 17,500 Long-term derivative liability — — Other liabilities ^(2) 32,340 17,379 Total partners' capital 1,545,257 1,639,744 Total liabilities and partners' capital $ 8,373,109 $ 8,516,783 (1) Please refer to the Cheniere Energy Partners, L.P. Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, filed with the Securities and Exchange Commission. (2) 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: Randy Bhatia: 713-375-5479 or Christina Burke: 713-375-5104, Media: Diane Haggard: 713-375-5259
Cheniere Energy Partners, L.P. Reports First Quarter 2014 Results
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