HOUSTON, Aug. 9, 2016 /PRNewswire/ -- Cheniere Energy
Partners, L.P. ("Cheniere Partners") (NYSE MKT: CQP) reported a net
loss of $100.1 million and
$175.0 million for the three and six
months ended June 30, 2016,
respectively, compared to a net loss of $60.0 million and $238.7
million for the same periods in 2015, respectively.
Adjusted EBITDA1 for the three and six months ended
June 30, 2016 was $50.7 million and $63.2
million, respectively, compared to $11.8 million and $17.7
million for the comparable 2015 periods, respectively.
During the three months ended June 30,
2016, we began recognizing LNG revenues and cost of sales
from the Sabine Pass Liquefaction Project (defined below) following
the substantial completion of the first liquefaction train ("Train
1"). After substantial completion, we exported 5 cargoes of LNG
under our contract with BG Gulf Coast LNG, LLC (Shell) as of the
end of the second quarter. Prior to substantial completion, amounts
received from the sale of commissioning cargoes were offset against
LNG terminal construction-in-process because these amounts were
earned during the testing phase for the construction of Train 1 of
the Sabine Pass Liquefaction Project. We expect sales of LNG
cargoes from future liquefaction trains ("Trains") to be reported
in the same manner.
Total operating costs and expenses increased $66.6 million and $65.7
million during the three and six months ended June 30, 2016 compared to the three and six
months ended June 30, 2015,
respectively, generally as a result of the commencement of
operations of Train 1 of the Sabine Pass Liquefaction Project.
Depreciation and amortization expense increased during the three
and six months ended June 30, 2016 as
we began depreciation of our assets related to Train 1 of the
Sabine Pass Liquefaction Project upon reaching substantial
completion. General and administrative expense-affiliate decreased
during the three and six months ended June
30, 2016, partially due to a decrease in the amount payable
under our service agreements with affiliates and partially due to a
reallocation of resources from general and administrative
activities to operating and maintenance activities following
commencement of operations at the Sabine Pass Liquefaction
Project.
For the three and six months ended June
30, 2016, Adjusted EBITDA excludes the impact of loss on
early extinguishment of debt associated with the write-off of debt
issuance costs by Sabine Pass Liquefaction, LLC ("SPL") in
connection with the refinancing of a portion of its credit
facilities and by Cheniere Creole Trail Pipeline, L.P. as a result
of the prepayment of its outstanding term loan, and derivative loss
primarily as a result of a decrease in the forward LIBOR curve over
the period as well as an increase in the notional amount of
interest rate swaps related to our new credit facilities entered
into in February 2016. For the three and six months ended
June 30, 2015, Adjusted EBITDA
excludes the impact of losses on early extinguishment of debt
related primarily to the write-off of debt issuance costs by SPL in
connection with the refinancing of a portion of its credit
facilities and derivative gains (losses) due primarily to the
termination of certain interest rate derivatives.
Second Quarter 2016 Highlights
- In May 2016, the Board of
Directors of Cheniere Energy Partners GP, LLC ("Cheniere GP"), our
general partner, appointed Jack A.
Fusco as Chief Executive Officer of Cheniere GP.
- In May 2016, Cheniere Partners
and Bechtel Oil, Gas and Chemicals, Inc. ("Bechtel") announced that
Train 1 of the Sabine Pass Liquefaction Project achieved
substantial completion.
- In June 2016, SPL issued an
aggregate principal amount of $1.5
billion of 5.875% Senior Secured Notes due 2026. Net
proceeds from the offering were used to prepay a portion of the
outstanding borrowings under SPL's credit facilities and to pay
fees and expenses incurred in connection with the offering and
prepayment.
Sabine Pass Liquefaction Project
We are developing up to six Trains, each with an expected
nominal production capacity of approximately 4.5 million tonnes per
annum ("mtpa") of LNG, at the Sabine Pass LNG terminal adjacent to
the existing regasification facilities (the "Sabine Pass
Liquefaction Project").
The Trains are in various stages of operation, construction, and
development.
- Construction on Trains 1 and 2 began in August 2012, and as of June 30, 2016, the
overall project completion percentage for Trains 1 and 2 was
approximately 99.4%, which is ahead of the contractual schedule.
Train 1 achieved substantial completion in May 2016. Each Train is expected to achieve
substantial completion upon the completion of construction,
commissioning and the satisfaction of certain tests. The
commissioning process on Train 2 has commenced, and based on the
current construction schedule we expect substantial completion of
Train 2 to be achieved in late September
2016.
- Construction on Trains 3 and 4 began in May 2013, and as of June 30, 2016, the
overall project completion percentage for Trains 3 and 4 was
approximately 87.4%, which is ahead of the contractual schedule.
Based on the current construction schedule, we expect Trains 3 and
4 to reach substantial completion in 2017.
- Construction on Train 5 began in June
2015, and as of June 30, 2016, the overall project
completion percentage for Train 5 was approximately 38.3%, which is
ahead of the contractual schedule. Engineering, procurement,
subcontract work and Bechtel direct hire construction were
approximately 77.0%, 58.0%, 37.8% and 2.0% complete, respectively.
Based on the current construction schedule, we expect Train 5 to
reach substantial completion in 2019.
- Train 6 is currently under development, with all necessary
regulatory approvals in place. We expect to make a final investment
decision and commence construction on Train 6 upon, among other
things, entering into an engineering, procurement, and construction
contract, entering into acceptable commercial arrangements, and
obtaining adequate financing.
|
Sabine Pass
Liquefaction Project
|
Liquefaction
Train
|
Train
1
|
Train
2
|
Trains
3-4
|
Train
5
|
Project
Status
|
Operational
|
Commissioning
|
87% Overall
Completion
|
38% Overall
Completion
|
Expected Substantial
Completion
|
-
|
2H 2016
|
2017
|
2019
|
Distributions to Unitholders
We will pay a cash distribution per common unit of $0.425 to unitholders of record as of
August 1, 2016, and the related
general partner distribution on August 12,
2016.
We estimate that the annualized distribution to common
unitholders for fiscal year 2016 will be $1.70 per unit.
Investor Conference Call and Webcast
Cheniere Energy, Inc. will host a conference call to discuss its
financial and operating results for the second quarter on
Tuesday, August 9, 2016, at
10 a.m. Eastern time / 9 a.m. Central time. A listen-only webcast of the
call and an accompanying slide presentation may be accessed through
our website at www.cheniere.com. Following the call, an archived
recording will be made available on our website. The call and
accompanying slide presentation may include financial and operating
results or other information regarding Cheniere Partners.
_______________
|
(1)
|
Non-GAAP financial
measure. See "Reconciliation of Non-GAAP Measures" for further
details.
|
About Cheniere Partners
Through its wholly owned
subsidiary, Sabine Pass LNG, L.P., Cheniere Partners owns 100% of
the Sabine Pass LNG terminal located in Cameron Parish, Louisiana, on the
Sabine-Neches Waterway 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 marine berths that can
accommodate vessels with nominal capacity of up to 266,000 cubic
meters and vaporizers with regasification capacity of approximately
4.0 Bcf/d. Through its wholly owned subsidiary, Cheniere
Creole Trail Pipeline, L.P., Cheniere Partners also owns a 94-mile
pipeline that interconnects the Sabine Pass LNG terminal with a
number of large interstate pipelines.
Cheniere Partners, through its subsidiary, SPL, is developing
and constructing natural gas liquefaction facilities at the Sabine
Pass LNG terminal adjacent to the existing regasification
facilities. Cheniere Partners, through SPL, plans to construct over
time up to six liquefaction trains, which are in various stages of
development and construction. Train 1 has commenced
commercial operations, Train 2 is undergoing commissioning, Trains
3 through 5 are under construction and Train 6 is fully
permitted. Each liquefaction train is expected to have a
nominal production capacity of approximately 4.5 mtpa of LNG. SPL
has entered into six third-party LNG sale and purchase agreements
("SPAs") that in the aggregate equate to approximately 19.75 mtpa
of LNG and commence with the date of first commercial delivery of
Trains 1 through 5 as specified in the respective SPAs.
For additional information, please refer to the Cheniere
Partners website at www.cheniere.com and Quarterly Report on Form
10-Q for the quarter ended June 30, 2016, filed with the
Securities and Exchange Commission.
Forward-Looking Statements
This press release contains
certain statements that may include "forward-looking statements."
All statements, other than statements of historical fact, 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 development, 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.
Consolidated
Statements of Operations
(in thousands,
except per unit data) (1)
(unaudited)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Revenues
|
|
|
|
|
|
|
|
Regasification
revenues
|
$
|
65,122
|
|
|
$
|
66,490
|
|
|
$
|
130,506
|
|
|
$
|
133,208
|
|
Regasification
revenues—affiliate
|
717
|
|
|
1,199
|
|
|
2,352
|
|
|
2,011
|
|
LNG
revenues
|
85,332
|
|
|
—
|
|
|
85,360
|
|
|
—
|
|
Total
revenues
|
151,171
|
|
|
67,689
|
|
|
218,218
|
|
|
135,219
|
|
|
|
|
|
|
|
|
|
Operating costs and
expenses
|
|
|
|
|
|
|
|
Cost of sales
(excluding depreciation and amortization expense shown separately
below)
|
49,294
|
|
|
91
|
|
|
53,198
|
|
|
784
|
|
Operating and
maintenance expense
|
24,717
|
|
|
9,298
|
|
|
42,102
|
|
|
39,838
|
|
Operating and
maintenance expense—affiliate
|
11,156
|
|
|
7,501
|
|
|
21,986
|
|
|
12,274
|
|
Development
expense
|
70
|
|
|
1,367
|
|
|
136
|
|
|
2,518
|
|
Development
expense—affiliate
|
153
|
|
|
206
|
|
|
282
|
|
|
410
|
|
General and
administrative expense
|
3,792
|
|
|
4,081
|
|
|
6,402
|
|
|
7,596
|
|
General and
administrative expense—affiliate
|
21,211
|
|
|
33,472
|
|
|
43,409
|
|
|
55,069
|
|
Depreciation and
amortization expense
|
28,184
|
|
|
15,991
|
|
|
47,572
|
|
|
30,870
|
|
Total operating costs
and expenses
|
138,577
|
|
|
72,007
|
|
|
215,087
|
|
|
149,359
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations
|
12,594
|
|
|
(4,318)
|
|
|
3,131
|
|
|
(14,140)
|
|
|
|
|
|
|
|
|
|
Other income
(expense)
|
|
|
|
|
|
|
|
Interest expense, net
of capitalized interest
|
(71,999)
|
|
|
(50,148)
|
|
|
(115,451)
|
|
|
(92,993)
|
|
Loss on early
extinguishment of debt
|
(26,304)
|
|
|
(7,281)
|
|
|
(27,761)
|
|
|
(96,273)
|
|
Derivative gain
(loss), net
|
(14,792)
|
|
|
1,469
|
|
|
(35,600)
|
|
|
(35,669)
|
|
Other
income
|
376
|
|
|
235
|
|
|
650
|
|
|
356
|
|
Total other
expense
|
(112,719)
|
|
|
(55,725)
|
|
|
(178,162)
|
|
|
(224,579)
|
|
|
|
|
|
|
|
|
|
Net loss
|
$
|
(100,125)
|
|
|
$
|
(60,043)
|
|
|
$
|
(175,031)
|
|
|
$
|
(238,719)
|
|
|
|
|
|
|
|
|
|
Basic and diluted net
loss per common unit
|
$
|
(0.21)
|
|
|
$
|
(0.01)
|
|
|
$
|
(0.29)
|
|
|
$
|
(0.62)
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common units outstanding used for basic and diluted net
loss per common unit calculation
|
57,084
|
|
|
57,080
|
|
|
57,084
|
|
|
57,080
|
|
|
_______________
|
(1)
|
Please refer to the
Cheniere Energy Partners, L.P. Quarterly Report on Form 10-Q for
the quarter ended June 30, 2016, filed with the Securities and
Exchange Commission.
|
Cheniere Energy
Partners, L.P.
Consolidated
Balance Sheets
(in thousands,
except per unit data) (1)
|
|
|
June
30,
|
|
December
31,
|
|
2016
|
|
2015
|
ASSETS
|
(unaudited)
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
|
12,262
|
|
|
$
|
146,221
|
|
Restricted
cash
|
450,506
|
|
|
274,557
|
|
Accounts and other
receivables
|
71,499
|
|
|
741
|
|
Accounts
receivable—affiliate
|
176
|
|
|
1,271
|
|
Advances to
affiliate
|
41,486
|
|
|
39,836
|
|
Inventory
|
48,331
|
|
|
16,667
|
|
Other current
assets
|
21,726
|
|
|
14,182
|
|
Total current
assets
|
645,986
|
|
|
493,475
|
|
|
|
|
|
Non-current
restricted cash
|
13,650
|
|
|
13,650
|
|
Property, plant and
equipment, net
|
13,223,191
|
|
|
11,931,602
|
|
Debt issuance costs,
net
|
137,605
|
|
|
132,091
|
|
Non-current
derivative assets
|
20,472
|
|
|
30,304
|
|
Other non-current
assets
|
217,946
|
|
|
232,031
|
|
Total
assets
|
$
|
14,258,850
|
|
|
$
|
12,833,153
|
|
|
|
|
|
LIABILITIES AND
PARTNERS' EQUITY
|
|
|
|
Current
liabilities
|
|
|
|
Accounts
payable
|
$
|
35,581
|
|
|
$
|
16,407
|
|
Accrued
liabilities
|
336,316
|
|
|
224,292
|
|
Current debt,
net
|
1,662,257
|
|
|
1,673,379
|
|
Due to
affiliates
|
87,349
|
|
|
115,123
|
|
Deferred
revenue
|
26,709
|
|
|
26,669
|
|
Deferred
revenue—affiliate
|
717
|
|
|
717
|
|
Derivative
liabilities
|
15,943
|
|
|
6,430
|
|
Other current
liabilities
|
54
|
|
|
—
|
|
Total current
liabilities
|
2,164,926
|
|
|
2,063,017
|
|
|
|
|
|
Long-term debt,
net
|
11,543,524
|
|
|
10,018,325
|
|
Non-current deferred
revenue
|
7,500
|
|
|
9,500
|
|
Non-current
derivative liabilities
|
26,904
|
|
|
2,884
|
|
Other non-current
liabilities
|
170
|
|
|
175
|
|
Other non-current
liabilities—affiliate
|
27,404
|
|
|
26,321
|
|
|
|
|
|
Partners'
equity
|
|
|
|
Common unitholders'
interest (57.1 million units issued and outstanding at June 30,
2016 and December 31, 2015)
|
204,009
|
|
|
305,747
|
|
Class B unitholders'
interest (145.3 million units issued and outstanding at June 30,
2016 and December 31, 2015)
|
(29,425)
|
|
|
(37,429)
|
|
Subordinated
unitholders' interest (135.4 million units issued and outstanding
at June 30, 2016 and December 31, 2015)
|
301,749
|
|
|
428,035
|
|
General partner's
interest (2% interest with 6.9 million units issued and outstanding
at June 30, 2016 and December 31, 2015)
|
12,089
|
|
|
16,578
|
|
Total partners'
equity
|
488,422
|
|
|
712,931
|
|
Total liabilities and
partners' equity
|
$
|
14,258,850
|
|
|
$
|
12,833,153
|
|
|
_______________
|
(1)
|
Please refer to the
Cheniere Energy Partners, L.P. Quarterly Report on Form 10-Q for
the quarter ended June 30, 2016, filed with the Securities and
Exchange Commission.
|
Reconciliation of Non-GAAP Measures
Regulation G Reconciliation
In addition to disclosing financial results in accordance with
U.S. GAAP, the accompanying news release contains a non-GAAP
financial measure. Adjusted EBITDA is a non-GAAP financial measure
that is used to facilitate comparisons of operating performance
across periods. This non-GAAP measure should be viewed as a
supplement to and not a substitute for our U.S. GAAP measures of
performance and the financial results calculated in accordance with
U.S. GAAP, and the reconciliation from these results should be
carefully evaluated.
Adjusted EBITDA is calculated by taking net loss before interest
expense, net of capitalized interest, including changes in the fair
value and settlement of our interest rate derivatives, taxes,
depreciation and amortization, and adjusting for the effects of
certain non-cash items, other non-operating income or expense items
and items not otherwise predictive or indicative of ongoing
operating performance, including the effects of modification or
extinguishment of debt, changes in the fair value of our commodity
derivatives and other income. Adjusted EBITDA is not intended to
represent cash flows from operations or net loss as defined by U.S.
GAAP and is not necessarily comparable to similarly titled measures
reported by other companies.
We believe Adjusted EBITDA provides relevant and useful
information to management, investors and other users of our
financial information in evaluating the effectiveness of our
operating performance in a manner that is consistent with
management's evaluation of business performance. Management
believes Adjusted EBITDA is widely used by investors to measure a
company's operating performance without regard to items such as
interest expense, taxes, depreciation and amortization which vary
substantially from company to company depending on capital
structure, the method by which assets were acquired and
depreciation policies. Further, the exclusion of certain non-cash
items and other non-operating income or expense items, and items
not otherwise predictive or indicative of ongoing operating
performance, enables comparability to prior period performance and
trend analysis.
Adjusted EBITDA
The following table reconciles our Adjusted EBITDA to U.S. GAAP
results for the three and six months ended June 30, 2016 and 2015 (in thousands):
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Net loss
|
(100,125)
|
|
|
(60,043)
|
|
|
(175,031)
|
|
|
(238,719)
|
|
Interest expense, net
of capitalized interest
|
71,999
|
|
|
50,148
|
|
|
115,451
|
|
|
92,993
|
|
Loss on early
extinguishment of debt
|
26,304
|
|
|
7,281
|
|
|
27,761
|
|
|
96,273
|
|
Derivative loss
(gain), net
|
14,792
|
|
|
(1,469)
|
|
|
35,600
|
|
|
35,669
|
|
Other
income
|
(376)
|
|
|
(235)
|
|
|
(650)
|
|
|
(356)
|
|
Income (loss) from
operations
|
12,594
|
|
|
(4,318)
|
|
|
3,131
|
|
|
(14,140)
|
|
Adjustments to
reconcile income (loss) from operations to Adjusted
EBITDA:
|
|
|
|
|
|
|
|
Depreciation and
amortization expense
|
28,184
|
|
|
15,991
|
|
|
47,572
|
|
|
30,870
|
|
Loss (gain) from
changes in fair value of commodity derivatives, net
|
9,938
|
|
|
120
|
|
|
12,541
|
|
|
964
|
|
Adjusted
EBITDA
|
50,716
|
|
|
11,793
|
|
|
63,244
|
|
|
17,694
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/cheniere-energy-partners-lp-reports-second-quarter-2016-results-300311011.html
SOURCE Cheniere Energy Partners, L.P.