Cheniere Energy Partners, L.P. Reports First Quarter 2014 Results

      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
 
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