|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Delaware
|
95-4352386
|
||
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
||
|
|
|
|
700 Milam Street
|
,
|
Suite 1900
|
|
Houston
|
,
|
Texas
|
77002
|
(Address of principal executive offices)
|
(Zip Code)
|
|
|
|
|
|
Title of each class
|
Trading Symbol
|
Name of each exchange on which registered
|
Common Stock, $ 0.003 par value
|
LNG
|
NYSE American
|
|
Large accelerated filer
|
☒
|
|
Accelerated filer
|
☐
|
|
Non-accelerated filer
|
☐
|
|
Smaller reporting company
|
☐
|
|
|
|
|
Emerging growth company
|
☐
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bcf
|
|
billion cubic feet
|
Bcf/d
|
|
billion cubic feet per day
|
Bcf/yr
|
|
billion cubic feet per year
|
Bcfe
|
|
billion cubic feet equivalent
|
DOE
|
|
U.S. Department of Energy
|
EPC
|
|
engineering, procurement and construction
|
FERC
|
|
Federal Energy Regulatory Commission
|
FTA countries
|
|
countries with which the United States has a free trade agreement providing for national treatment for trade in natural gas
|
GAAP
|
|
generally accepted accounting principles in the United States
|
Henry Hub
|
|
the final settlement price (in USD per MMBtu) for the New York Mercantile Exchange’s Henry Hub natural gas futures contract for the month in which a relevant cargo’s delivery window is scheduled to begin
|
LIBOR
|
|
London Interbank Offered Rate
|
LNG
|
|
liquefied natural gas, a product of natural gas that, through a refrigeration process, has been cooled to a liquid state, which occupies a volume that is approximately 1/600th of its gaseous state
|
MMBtu
|
|
million British thermal units, an energy unit
|
mtpa
|
|
million tonnes per annum
|
non-FTA countries
|
|
countries with which the United States does not have a free trade agreement providing for national treatment for trade in natural gas and with which trade is permitted
|
SEC
|
|
U.S. Securities and Exchange Commission
|
SPA
|
|
LNG sale and purchase agreement
|
TBtu
|
|
trillion British thermal units, an energy unit
|
Train
|
|
an industrial facility comprised of a series of refrigerant compressor loops used to cool natural gas into LNG
|
TUA
|
|
terminal use agreement
|
PART I.
|
FINANCIAL INFORMATION
|
ITEM 1.
|
CONSOLIDATED FINANCIAL STATEMENTS
|
|
June 30,
|
|
December 31,
|
||||
|
2019
|
|
2018
|
||||
ASSETS
|
(unaudited)
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
2,279
|
|
|
$
|
981
|
|
Restricted cash
|
1,161
|
|
|
2,175
|
|
||
Accounts and other receivables
|
433
|
|
|
585
|
|
||
Inventory
|
290
|
|
|
316
|
|
||
Derivative assets
|
127
|
|
|
63
|
|
||
Other current assets
|
135
|
|
|
114
|
|
||
Total current assets
|
4,425
|
|
|
4,234
|
|
||
|
|
|
|
||||
Property, plant and equipment, net
|
29,073
|
|
|
27,245
|
|
||
Operating lease assets, net
|
502
|
|
|
—
|
|
||
Debt issuance costs, net
|
55
|
|
|
72
|
|
||
Non-current derivative assets
|
103
|
|
|
54
|
|
||
Goodwill
|
77
|
|
|
77
|
|
||
Other non-current assets, net
|
337
|
|
|
305
|
|
||
Total assets
|
$
|
34,572
|
|
|
$
|
31,987
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
||
Current liabilities
|
|
|
|
|
|
||
Accounts payable
|
$
|
120
|
|
|
$
|
58
|
|
Accrued liabilities
|
1,572
|
|
|
1,169
|
|
||
Current debt
|
—
|
|
|
239
|
|
||
Deferred revenue
|
136
|
|
|
139
|
|
||
Current operating lease liabilities
|
292
|
|
|
—
|
|
||
Derivative liabilities
|
84
|
|
|
128
|
|
||
Other current liabilities
|
3
|
|
|
9
|
|
||
Total current liabilities
|
2,207
|
|
|
1,742
|
|
||
|
|
|
|
||||
Long-term debt, net
|
29,944
|
|
|
28,179
|
|
||
Non-current operating lease liabilities
|
202
|
|
|
—
|
|
||
Non-current finance lease liabilities
|
58
|
|
|
57
|
|
||
Non-current derivative liabilities
|
94
|
|
|
22
|
|
||
Other non-current liabilities
|
44
|
|
|
58
|
|
||
|
|
|
|
||||
Commitments and contingencies (see Note 16)
|
|
|
|
|
|
||
|
|
|
|
||||
Stockholders’ equity
|
|
|
|
|
|
||
Preferred stock, $0.0001 par value, 5.0 million shares authorized, none issued
|
—
|
|
|
—
|
|
||
Common stock, $0.003 par value
|
|
|
|
|
|||
Authorized: 480.0 million shares at June 30, 2019 and December 31, 2018
|
|
|
|
||||
Issued: 270.5 million shares at June 30, 2019 and 269.8 million shares at December 31, 2018
|
|
|
|
|
|
||
Outstanding: 257.5 million shares at June 30, 2019 and 257.0 million shares at December 31, 2018
|
1
|
|
|
1
|
|
||
Treasury stock: 13.0 million shares and 12.8 million shares at June 30, 2019 and December 31, 2018, respectively, at cost
|
(423
|
)
|
|
(406
|
)
|
||
Additional paid-in-capital
|
4,097
|
|
|
4,035
|
|
||
Accumulated deficit
|
(4,129
|
)
|
|
(4,156
|
)
|
||
Total stockholders’ deficit
|
(454
|
)
|
|
(526
|
)
|
||
Non-controlling interest
|
2,477
|
|
|
2,455
|
|
||
Total equity
|
2,023
|
|
|
1,929
|
|
||
Total liabilities and equity
|
$
|
34,572
|
|
|
$
|
31,987
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
LNG revenues
|
$
|
2,173
|
|
|
$
|
1,442
|
|
|
$
|
4,316
|
|
|
$
|
3,608
|
|
Regasification revenues
|
67
|
|
|
65
|
|
|
133
|
|
|
130
|
|
||||
Other revenues
|
52
|
|
|
36
|
|
|
104
|
|
|
47
|
|
||||
Total revenues
|
2,292
|
|
|
1,543
|
|
|
4,553
|
|
|
3,785
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating costs and expenses
|
|
|
|
|
|
|
|
||||||||
Cost of sales (excluding depreciation and amortization expense shown separately below)
|
1,277
|
|
|
873
|
|
|
2,491
|
|
|
2,051
|
|
||||
Operating and maintenance expense
|
295
|
|
|
147
|
|
|
516
|
|
|
287
|
|
||||
Development expense
|
3
|
|
|
3
|
|
|
4
|
|
|
4
|
|
||||
Selling, general and administrative expense
|
77
|
|
|
73
|
|
|
150
|
|
|
140
|
|
||||
Depreciation and amortization expense
|
204
|
|
|
111
|
|
|
348
|
|
|
220
|
|
||||
Impairment expense and loss on disposal of assets
|
4
|
|
|
—
|
|
|
6
|
|
|
—
|
|
||||
Total operating costs and expenses
|
1,860
|
|
|
1,207
|
|
|
3,515
|
|
|
2,702
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Income from operations
|
432
|
|
|
336
|
|
|
1,038
|
|
|
1,083
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Other income (expense)
|
|
|
|
|
|
|
|
||||||||
Interest expense, net of capitalized interest
|
(372
|
)
|
|
(216
|
)
|
|
(619
|
)
|
|
(432
|
)
|
||||
Loss on modification or extinguishment of debt
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
(15
|
)
|
||||
Derivative gain (loss), net
|
(74
|
)
|
|
32
|
|
|
(109
|
)
|
|
109
|
|
||||
Other income
|
16
|
|
|
10
|
|
|
32
|
|
|
17
|
|
||||
Total other expense
|
(430
|
)
|
|
(189
|
)
|
|
(696
|
)
|
|
(321
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Income before income taxes and non-controlling interest
|
2
|
|
|
147
|
|
|
342
|
|
|
762
|
|
||||
Income tax benefit (provision)
|
—
|
|
|
3
|
|
|
(3
|
)
|
|
(12
|
)
|
||||
Net income
|
2
|
|
|
150
|
|
|
339
|
|
|
750
|
|
||||
Less: net income attributable to non-controlling interest
|
116
|
|
|
168
|
|
|
312
|
|
|
411
|
|
||||
Net income (loss) attributable to common stockholders
|
$
|
(114
|
)
|
|
$
|
(18
|
)
|
|
$
|
27
|
|
|
$
|
339
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss) per share attributable to common stockholders—basic (1)
|
$
|
(0.44
|
)
|
|
$
|
(0.07
|
)
|
|
$
|
0.11
|
|
|
$
|
1.42
|
|
Net income (loss) per share attributable to common stockholders—diluted (1)
|
$
|
(0.44
|
)
|
|
$
|
(0.07
|
)
|
|
$
|
0.11
|
|
|
$
|
1.40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average number of common shares outstanding—basic
|
257.4
|
|
|
242.8
|
|
|
257.3
|
|
|
239.2
|
|
||||
Weighted average number of common shares outstanding—diluted
|
257.4
|
|
|
242.8
|
|
|
258.6
|
|
|
241.7
|
|
|
Three and Six Months Ended June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Total Stockholders’ Equity
|
|
|
|
|||||||||||||||||||||||||
|
Common Stock
|
|
Treasury Stock
|
|
Additional Paid-in Capital
|
|
Accumulated Deficit
|
|
Non-controlling Interest
|
|
Total
Equity
|
||||||||||||||||||
|
Shares
|
|
Par Value Amount
|
|
Shares
|
|
Amount
|
|
|
|
|
||||||||||||||||||
Balance at December 31, 2018
|
257.0
|
|
|
$
|
1
|
|
|
12.8
|
|
|
$
|
(406
|
)
|
|
$
|
4,035
|
|
|
$
|
(4,156
|
)
|
|
$
|
2,455
|
|
|
$
|
1,929
|
|
Vesting of restricted stock units
|
0.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28
|
|
|
—
|
|
|
—
|
|
|
28
|
|
||||||
Shares withheld from employees related to share-based compensation, at cost
|
(0.2
|
)
|
|
—
|
|
|
0.2
|
|
|
(12
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12
|
)
|
||||||
Net income attributable to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
196
|
|
|
196
|
|
||||||
Distributions and dividends to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(144
|
)
|
|
(144
|
)
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
141
|
|
|
—
|
|
|
141
|
|
||||||
Balance at March 31, 2019
|
257.4
|
|
|
1
|
|
|
13.0
|
|
|
(418
|
)
|
|
4,063
|
|
|
(4,015
|
)
|
|
2,507
|
|
|
2,138
|
|
||||||
Vesting of restricted stock units
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
33
|
|
|
—
|
|
|
—
|
|
|
33
|
|
||||||
Shares withheld from employees related to share-based compensation, at cost
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||||
Shares repurchased, at cost
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
||||||
Net income attributable to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
116
|
|
|
116
|
|
||||||
Equity portion of convertible notes, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||
Distributions and dividends to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(146
|
)
|
|
(146
|
)
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(114
|
)
|
|
—
|
|
|
(114
|
)
|
||||||
Balance at June 30, 2019
|
257.5
|
|
|
$
|
1
|
|
|
13.0
|
|
|
$
|
(423
|
)
|
|
$
|
4,097
|
|
|
$
|
(4,129
|
)
|
|
$
|
2,477
|
|
|
$
|
2,023
|
|
Three and Six Months Ended June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Total Stockholders’ Equity
|
|
|
|
|||||||||||||||||||||||||
|
Common Stock
|
|
Treasury Stock
|
|
Additional Paid-in Capital
|
|
Accumulated Deficit
|
|
Non-controlling Interest
|
|
Total
Equity |
||||||||||||||||||
|
Shares
|
|
Par Value Amount
|
|
Shares
|
|
Amount
|
|
|
|
|
||||||||||||||||||
Balance at December 31, 2017
|
237.6
|
|
|
$
|
1
|
|
|
12.5
|
|
|
$
|
(386
|
)
|
|
$
|
3,248
|
|
|
$
|
(4,627
|
)
|
|
$
|
3,004
|
|
|
$
|
1,240
|
|
Vesting of restricted stock units
|
0.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
16
|
|
||||||
Shares withheld from employees related to share-based compensation, at cost
|
—
|
|
|
—
|
|
|
0.1
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
||||||
Net income attributable to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
243
|
|
|
243
|
|
||||||
Distributions and dividends to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(143
|
)
|
|
(143
|
)
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
357
|
|
|
—
|
|
|
357
|
|
||||||
Balance at March 31, 2018
|
237.9
|
|
|
1
|
|
|
12.6
|
|
|
(392
|
)
|
|
3,264
|
|
|
(4,270
|
)
|
|
3,104
|
|
|
1,707
|
|
||||||
Issuance of stock to acquire additional interest in Cheniere Holdings
|
10.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
376
|
|
|
—
|
|
|
(376
|
)
|
|
—
|
|
||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23
|
|
|
—
|
|
|
—
|
|
|
23
|
|
||||||
Shares withheld from employees related to share-based compensation, at cost
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||||
Net income attributable to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
168
|
|
|
168
|
|
||||||
Equity portion of convertible notes, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||
Distributions and dividends to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(145
|
)
|
|
(145
|
)
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18
|
)
|
|
—
|
|
|
(18
|
)
|
||||||
Balance at June 30, 2018
|
248.1
|
|
|
$
|
1
|
|
|
12.6
|
|
|
$
|
(394
|
)
|
|
$
|
3,664
|
|
|
$
|
(4,288
|
)
|
|
$
|
2,751
|
|
|
$
|
1,734
|
|
|
Six Months Ended June 30,
|
||||||
|
2019
|
|
2018
|
||||
Cash flows from operating activities
|
|
|
|
||||
Net income
|
$
|
339
|
|
|
$
|
750
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization expense
|
348
|
|
|
220
|
|
||
Share-based compensation expense
|
61
|
|
|
58
|
|
||
Non-cash interest expense
|
93
|
|
|
30
|
|
||
Amortization of debt issuance costs, deferred commitment fees, premium and discount
|
44
|
|
|
35
|
|
||
Amortization of operating lease assets
|
158
|
|
|
—
|
|
||
Loss on modification or extinguishment of debt
|
—
|
|
|
15
|
|
||
Total losses (gains) on derivatives, net
|
(147
|
)
|
|
4
|
|
||
Net cash provided by (used for) settlement of derivative instruments
|
62
|
|
|
(8
|
)
|
||
Impairment expense and loss on disposal of assets
|
6
|
|
|
—
|
|
||
Other
|
2
|
|
|
(5
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts and other receivables
|
59
|
|
|
80
|
|
||
Inventory
|
33
|
|
|
10
|
|
||
Other current assets
|
(46
|
)
|
|
(61
|
)
|
||
Accounts payable and accrued liabilities
|
(80
|
)
|
|
(132
|
)
|
||
Deferred revenue
|
(2
|
)
|
|
(13
|
)
|
||
Operating lease liabilities
|
(163
|
)
|
|
—
|
|
||
Other, net
|
(7
|
)
|
|
(1
|
)
|
||
Net cash provided by operating activities
|
760
|
|
|
982
|
|
||
|
|
|
|
||||
Cash flows from investing activities
|
|
|
|
||||
Property, plant and equipment, net
|
(1,508
|
)
|
|
(1,508
|
)
|
||
Investment in equity method investment
|
(34
|
)
|
|
—
|
|
||
Other
|
—
|
|
|
16
|
|
||
Net cash used in investing activities
|
(1,542
|
)
|
|
(1,492
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities
|
|
|
|
||||
Proceeds from issuances of debt
|
2,021
|
|
|
1,799
|
|
||
Repayments of debt
|
(630
|
)
|
|
(281
|
)
|
||
Debt issuance and deferred financing costs
|
(20
|
)
|
|
(46
|
)
|
||
Debt extinguishment costs
|
—
|
|
|
(8
|
)
|
||
Distributions and dividends to non-controlling interest
|
(290
|
)
|
|
(288
|
)
|
||
Payments related to tax withholdings for share-based compensation
|
(14
|
)
|
|
(8
|
)
|
||
Repurchase of common stock
|
(3
|
)
|
|
—
|
|
||
Other
|
2
|
|
|
—
|
|
||
Net cash provided by financing activities
|
1,066
|
|
|
1,168
|
|
||
|
|
|
|
||||
Net increase in cash, cash equivalents and restricted cash
|
284
|
|
|
658
|
|
||
Cash, cash equivalents and restricted cash—beginning of period
|
3,156
|
|
|
2,613
|
|
||
Cash, cash equivalents and restricted cash—end of period
|
$
|
3,440
|
|
|
$
|
3,271
|
|
|
June 30, 2019
|
||
Cash and cash equivalents
|
$
|
2,279
|
|
Restricted cash
|
1,161
|
|
|
Total cash, cash equivalents and restricted cash
|
$
|
3,440
|
|
|
|
June 30,
|
|
December 31,
|
||||
|
|
2019
|
|
2018
|
||||
Current restricted cash
|
|
|
|
|
||||
SPL Project
|
|
$
|
596
|
|
|
$
|
756
|
|
Cheniere Partners and cash held by guarantor subsidiaries
|
|
—
|
|
|
785
|
|
||
CCL Project
|
|
279
|
|
|
289
|
|
||
Cash held by our subsidiaries restricted to Cheniere
|
|
286
|
|
|
345
|
|
||
Total current restricted cash
|
|
$
|
1,161
|
|
|
$
|
2,175
|
|
|
|
June 30,
|
|
December 31,
|
||||
|
|
2019
|
|
2018
|
||||
Trade receivables
|
|
|
|
|
||||
SPL and CCL
|
|
$
|
257
|
|
|
$
|
330
|
|
Cheniere Marketing
|
|
145
|
|
|
205
|
|
||
Other accounts receivable
|
|
31
|
|
|
50
|
|
||
Total accounts and other receivables
|
|
$
|
433
|
|
|
$
|
585
|
|
|
|
June 30,
|
|
December 31,
|
||||
|
|
2019
|
|
2018
|
||||
Natural gas
|
|
$
|
19
|
|
|
$
|
30
|
|
LNG
|
|
38
|
|
|
24
|
|
||
LNG in-transit
|
|
104
|
|
|
173
|
|
||
Materials and other
|
|
129
|
|
|
89
|
|
||
Total inventory
|
|
$
|
290
|
|
|
$
|
316
|
|
|
|
June 30,
|
|
December 31,
|
||||
|
|
2019
|
|
2018
|
||||
LNG terminal costs
|
|
|
|
|
||||
LNG terminal and interconnecting pipeline facilities
|
|
$
|
23,650
|
|
|
$
|
13,386
|
|
LNG site and related costs
|
|
319
|
|
|
86
|
|
||
LNG terminal construction-in-process
|
|
6,529
|
|
|
14,864
|
|
||
Accumulated depreciation
|
|
(1,625
|
)
|
|
(1,299
|
)
|
||
Total LNG terminal costs, net
|
|
28,873
|
|
|
27,037
|
|
||
Fixed assets and other
|
|
|
|
|
|
|
||
Computer and office equipment
|
|
22
|
|
|
17
|
|
||
Furniture and fixtures
|
|
22
|
|
|
22
|
|
||
Computer software
|
|
104
|
|
|
100
|
|
||
Leasehold improvements
|
|
42
|
|
|
41
|
|
||
Land
|
|
59
|
|
|
59
|
|
||
Other
|
|
20
|
|
|
21
|
|
||
Accumulated depreciation
|
|
(127
|
)
|
|
(111
|
)
|
||
Total fixed assets and other, net
|
|
142
|
|
|
149
|
|
||
Assets under finance lease
|
|
|
|
|
||||
Tug vessels
|
|
60
|
|
|
60
|
|
||
Accumulated depreciation
|
|
(2
|
)
|
|
(1
|
)
|
||
Total assets under finance lease, net
|
|
58
|
|
|
59
|
|
||
Property, plant and equipment, net
|
|
$
|
29,073
|
|
|
$
|
27,245
|
|
•
|
interest rate swaps to hedge the exposure to volatility in a portion of the floating-rate interest payments under CCH’s credit facilities (“CCH Interest Rate Derivatives”) and to hedge against changes in interest rates that could impact anticipated future issuance of debt by CCH (“CCH Interest Rate Forward Start Derivatives”);
|
•
|
commodity derivatives consisting of natural gas supply contracts for the commissioning and operation of the SPL Project, CCL Project and potential future development of Corpus Christi Stage 3 (“Physical Liquefaction Supply Derivatives”) and associated economic hedges (collectively, the “Liquefaction Supply Derivatives”);
|
•
|
financial derivatives to hedge the exposure to the commodity markets in which we have contractual arrangements to purchase or sell physical LNG (“LNG Trading Derivatives”); and
|
•
|
foreign currency exchange (“FX”) contracts to hedge exposure to currency risk associated with both LNG Trading Derivatives and operations in countries outside of the United States (“FX Derivatives”).
|
|
Fair Value Measurements as of
|
||||||||||||||||||||||||||||||
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||||||||||||||||||
|
Quoted Prices in Active Markets
(Level 1) |
|
Significant Other Observable Inputs
(Level 2) |
|
Significant Unobservable Inputs
(Level 3) |
|
Total
|
|
Quoted Prices in Active Markets
(Level 1) |
|
Significant Other Observable Inputs
(Level 2) |
|
Significant Unobservable Inputs
(Level 3) |
|
Total
|
||||||||||||||||
CCH Interest Rate Derivatives asset (liability)
|
$
|
—
|
|
|
$
|
(88
|
)
|
|
$
|
—
|
|
|
$
|
(88
|
)
|
|
$
|
—
|
|
|
$
|
18
|
|
|
$
|
—
|
|
|
$
|
18
|
|
CCH Interest Rate Forward Start Derivatives liability
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Liquefaction Supply Derivatives asset (liability)
|
—
|
|
|
1
|
|
|
89
|
|
|
90
|
|
|
6
|
|
|
(19
|
)
|
|
(29
|
)
|
|
(42
|
)
|
||||||||
LNG Trading Derivatives asset (liability)
|
(4
|
)
|
|
51
|
|
|
—
|
|
|
47
|
|
|
1
|
|
|
(25
|
)
|
|
—
|
|
|
(24
|
)
|
||||||||
FX Derivatives asset
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
15
|
|
|
|
Net Fair Value Asset (Liability)
(in millions)
|
|
Valuation Approach
|
|
Significant Unobservable Input
|
|
Significant Unobservable Inputs Range
|
Physical Liquefaction Supply Derivatives
|
|
$89
|
|
Market approach incorporating present value techniques
|
|
Henry Hub Basis Spread
|
|
$(0.700) - $0.056
|
|
|
|
|
Option pricing model
|
|
International pricing spread, relative to Henry Hub (1)
|
|
128% - 176%
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Balance, beginning of period
|
|
$
|
31
|
|
|
$
|
10
|
|
|
$
|
(29
|
)
|
|
$
|
43
|
|
Realized and mark-to-market gains (losses):
|
|
|
|
|
|
|
|
|
||||||||
Included in cost of sales
|
|
7
|
|
|
(1
|
)
|
|
23
|
|
|
(12
|
)
|
||||
Purchases and settlements:
|
|
|
|
|
|
|
|
|
||||||||
Purchases
|
|
50
|
|
|
6
|
|
|
50
|
|
|
6
|
|
||||
Settlements
|
|
1
|
|
|
(4
|
)
|
|
45
|
|
|
(25
|
)
|
||||
Transfers out of Level 3 (1)
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||
Balance, end of period
|
|
$
|
89
|
|
|
$
|
12
|
|
|
$
|
89
|
|
|
$
|
12
|
|
Change in unrealized gains (losses) relating to instruments still held at end of period
|
|
$
|
7
|
|
|
$
|
(1
|
)
|
|
$
|
23
|
|
|
$
|
(12
|
)
|
|
|
|
Initial Notional Amount
|
|
Maximum Notional Amount
|
|
Effective Date
|
|
Maturity Date
|
|
Weighted Average Fixed Interest Rate Paid
|
|
Variable Interest Rate Received
|
CCH Interest Rate Derivatives
|
|
$29 million
|
|
$4.7 billion
|
|
May 20, 2015
|
|
May 31, 2022
|
|
2.30%
|
|
One-month LIBOR
|
CCH Interest Rate Forward Start Derivatives
|
|
$1.0 billion
|
|
$1.0 billion
|
|
June 30, 2020
|
|
September 30, 2030
|
|
2.11%
|
|
Three-month LIBOR
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
CCH Interest Rate Derivatives
|
|
CCH Interest Rate Forward Start Derivatives
|
|
Total
|
|
CCH Interest Rate Derivatives
|
|
CCH Interest Rate Forward Start Derivatives
|
|
Total
|
||||||||||||
Consolidated Balance Sheet Location
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative assets
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
10
|
|
Non-current derivative assets
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
||||||
Total derivative assets
|
—
|
|
|
—
|
|
|
—
|
|
|
18
|
|
|
—
|
|
|
18
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivative liabilities
|
(21
|
)
|
|
—
|
|
|
(21
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Non-current derivative liabilities
|
(67
|
)
|
|
(7
|
)
|
|
(74
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total derivative liabilities
|
(88
|
)
|
|
(7
|
)
|
|
(95
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivative asset (liability), net
|
$
|
(88
|
)
|
|
$
|
(7
|
)
|
|
$
|
(95
|
)
|
|
$
|
18
|
|
|
$
|
—
|
|
|
$
|
18
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
CCH Interest Rate Derivatives gain (loss)
|
|
$
|
(67
|
)
|
|
$
|
29
|
|
|
$
|
(102
|
)
|
|
$
|
98
|
|
CCH Interest Rate Forward Start Derivatives loss
|
|
(7
|
)
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
||||
CQP Interest Rate Derivatives gain
|
|
—
|
|
|
3
|
|
|
—
|
|
|
11
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
Liquefaction Supply Derivatives (1)
|
|
LNG Trading Derivatives (2)
|
|
Total
|
|
Liquefaction Supply Derivatives (1)
|
|
LNG Trading Derivatives (2)
|
|
Total
|
||||||||||||
Consolidated Balance Sheet Location
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative assets
|
$
|
24
|
|
|
$
|
92
|
|
|
$
|
116
|
|
|
$
|
13
|
|
|
$
|
24
|
|
|
$
|
37
|
|
Non-current derivative assets
|
94
|
|
|
9
|
|
|
103
|
|
|
46
|
|
|
—
|
|
|
46
|
|
||||||
Total derivative assets
|
118
|
|
|
101
|
|
|
219
|
|
|
59
|
|
|
24
|
|
|
83
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative liabilities
|
(13
|
)
|
|
(50
|
)
|
|
(63
|
)
|
|
(79
|
)
|
|
(48
|
)
|
|
(127
|
)
|
||||||
Non-current derivative liabilities
|
(15
|
)
|
|
(4
|
)
|
|
(19
|
)
|
|
(22
|
)
|
|
—
|
|
|
(22
|
)
|
||||||
Total derivative liabilities
|
(28
|
)
|
|
(54
|
)
|
|
(82
|
)
|
|
(101
|
)
|
|
(48
|
)
|
|
(149
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative asset (liability), net
|
$
|
90
|
|
|
$
|
47
|
|
|
$
|
137
|
|
|
$
|
(42
|
)
|
|
$
|
(24
|
)
|
|
$
|
(66
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Notional amount, net (in TBtu) (3)
|
6,781
|
|
|
50
|
|
|
|
|
5,832
|
|
|
12
|
|
|
|
|
(1)
|
Does not include collateral calls of $6 million and $5 million for such contracts, which are included in other current assets in our Consolidated Balance Sheets as of June 30, 2019 and December 31, 2018, respectively. Includes derivative assets of $2 million and $2 million and non-current assets of $1 million and $3 million as of June 30, 2019 and December 31, 2018, respectively, for a natural gas supply contract CCL has with a related party.
|
(2)
|
Does not include collateral of $15 million and $9 million deposited for such contracts, which are included in other current assets in our Consolidated Balance Sheets as of June 30, 2019 and December 31, 2018, respectively.
|
(3)
|
SPL had secured up to approximately 3,437 TBtu and 3,464 TBtu as of June 30, 2019 and December 31, 2018, respectively. CCL had secured up to approximately 2,787 TBtu and 2,801 TBtu of natural gas feedstock through natural gas supply contracts as of June 30, 2019 and December 31, 2018, respectively, of which 57 TBtu and 55 TBtu, respectively, were for a natural gas supply contract CCL has with a related party. Corpus Christi Stage 3 had secured up to approximately 754 TBtu of natural gas feedstock through natural gas supply contracts as of June 30, 2019.
|
|
Consolidated Statements of Operations Location (1)
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|||||||||
LNG Trading Derivatives gain (loss)
|
LNG revenues
|
|
$
|
94
|
|
|
$
|
(76
|
)
|
|
$
|
158
|
|
|
$
|
(70
|
)
|
LNG Trading Derivatives loss
|
Cost of sales
|
|
(51
|
)
|
|
—
|
|
|
(51
|
)
|
|
—
|
|
||||
Liquefaction Supply Derivatives gain (loss) (2)
|
LNG revenues
|
|
(1
|
)
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Liquefaction Supply Derivatives gain (loss) (2)(3)
|
Cost of sales
|
|
57
|
|
|
(3
|
)
|
|
139
|
|
|
(53
|
)
|
|
(1)
|
Fair value fluctuations associated with commodity derivative activities are classified and presented consistently with the item economically hedged and the nature and intent of the derivative instrument.
|
(2)
|
Does not include the realized value associated with derivative instruments that settle through physical delivery.
|
(3)
|
Includes $24 million and $36 million that CCL recorded in cost of sales under a natural gas supply contract with a related party during the three and six months ended June 30, 2019, respectively. Of this amount, $4 million was included in accrued liabilities as of June 30, 2019. CCL did not have any transactions during the three and six months ended June 30, 2018 under this contract.
|
|
|
|
Fair Value Measurements as of
|
||||||
|
Consolidated Balance Sheet Location
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
FX Derivatives
|
Derivative assets
|
|
$
|
11
|
|
|
$
|
16
|
|
FX Derivatives
|
Derivative liabilities
|
|
—
|
|
|
(1
|
)
|
||
FX Derivatives
|
Non-current derivative liabilities
|
|
(1
|
)
|
|
—
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
Consolidated Statements of Operations Location
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
FX Derivatives gain
|
LNG revenues
|
|
$
|
—
|
|
|
$
|
12
|
|
|
$
|
9
|
|
|
$
|
10
|
|
|
|
Gross Amounts Recognized
|
|
Gross Amounts Offset in the Consolidated Balance Sheets
|
|
Net Amounts Presented in the Consolidated Balance Sheets
|
||||||
Offsetting Derivative Assets (Liabilities)
|
|
|
|
|||||||||
As of June 30, 2019
|
|
|
|
|
|
|
||||||
CCH Interest Rate Derivatives
|
|
$
|
(88
|
)
|
|
$
|
—
|
|
|
$
|
(88
|
)
|
CCH Interest Rate Forward Start Derivatives
|
|
(7
|
)
|
|
—
|
|
|
(7
|
)
|
|||
Liquefaction Supply Derivatives
|
|
121
|
|
|
(3
|
)
|
|
118
|
|
|||
Liquefaction Supply Derivatives
|
|
(35
|
)
|
|
7
|
|
|
(28
|
)
|
|||
LNG Trading Derivatives
|
|
109
|
|
|
(8
|
)
|
|
101
|
|
|||
LNG Trading Derivatives
|
|
(62
|
)
|
|
8
|
|
|
(54
|
)
|
|||
FX Derivatives
|
|
21
|
|
|
(10
|
)
|
|
11
|
|
|||
FX Derivatives
|
|
(11
|
)
|
|
10
|
|
|
(1
|
)
|
|||
As of December 31, 2018
|
|
|
|
|
|
|
|
|||||
CCH Interest Rate Derivatives
|
|
$
|
19
|
|
|
$
|
(1
|
)
|
|
$
|
18
|
|
Liquefaction Supply Derivatives
|
|
95
|
|
|
(36
|
)
|
|
59
|
|
|||
Liquefaction Supply Derivatives
|
|
(121
|
)
|
|
20
|
|
|
(101
|
)
|
|||
LNG Trading Derivatives
|
|
112
|
|
|
(88
|
)
|
|
24
|
|
|||
LNG Trading Derivatives
|
|
(92
|
)
|
|
44
|
|
|
(48
|
)
|
|||
FX Derivatives
|
|
30
|
|
|
(14
|
)
|
|
16
|
|
|||
FX Derivatives
|
|
(2
|
)
|
|
1
|
|
|
(1
|
)
|
|
|
June 30,
|
|
December 31,
|
||||
|
|
2019
|
|
2018
|
||||
Advances made to municipalities for water system enhancements
|
|
$
|
89
|
|
|
$
|
90
|
|
Advances and other asset conveyances to third parties to support LNG terminals
|
|
55
|
|
|
54
|
|
||
Tax-related payments and receivables
|
|
21
|
|
|
21
|
|
||
Equity method investments
|
|
124
|
|
|
94
|
|
||
Advances made under EPC and non-EPC contracts
|
|
11
|
|
|
14
|
|
||
Other
|
|
37
|
|
|
32
|
|
||
Total other non-current assets, net
|
|
$
|
337
|
|
|
$
|
305
|
|
|
|
June 30,
|
|
December 31,
|
||||
|
|
2019
|
|
2018
|
||||
Interest costs and related debt fees
|
|
$
|
405
|
|
|
$
|
233
|
|
Accrued natural gas purchases
|
|
402
|
|
|
610
|
|
||
LNG terminals and related pipeline costs
|
|
630
|
|
|
125
|
|
||
Compensation and benefits
|
|
58
|
|
|
117
|
|
||
Accrued LNG inventory
|
|
3
|
|
|
14
|
|
||
Other accrued liabilities
|
|
74
|
|
|
70
|
|
||
Total accrued liabilities
|
|
$
|
1,572
|
|
|
$
|
1,169
|
|
|
|
June 30,
|
|
December 31,
|
||||
|
|
2019
|
|
2018
|
||||
Long-term debt:
|
|
|
|
|
||||
SPL
|
|
|
|
|
|
|||
5.625% Senior Secured Notes due 2021 (“2021 SPL Senior Notes”)
|
|
$
|
2,000
|
|
|
$
|
2,000
|
|
6.25% Senior Secured Notes due 2022 (“2022 SPL Senior Notes”)
|
|
1,000
|
|
|
1,000
|
|
||
5.625% Senior Secured Notes due 2023 (“2023 SPL Senior Notes”)
|
|
1,500
|
|
|
1,500
|
|
||
5.75% Senior Secured Notes due 2024 (“2024 SPL Senior Notes”)
|
|
2,000
|
|
|
2,000
|
|
||
5.625% Senior Secured Notes due 2025 (“2025 SPL Senior Notes”)
|
|
2,000
|
|
|
2,000
|
|
||
5.875% Senior Secured Notes due 2026 (“2026 SPL Senior Notes”)
|
|
1,500
|
|
|
1,500
|
|
||
5.00% Senior Secured Notes due 2027 (“2027 SPL Senior Notes”)
|
|
1,500
|
|
|
1,500
|
|
||
4.200% Senior Secured Notes due 2028 (“2028 SPL Senior Notes”)
|
|
1,350
|
|
|
1,350
|
|
||
5.00% Senior Secured Notes due 2037 (“2037 SPL Senior Notes”)
|
|
800
|
|
|
800
|
|
||
Cheniere Partners
|
|
|
|
|
||||
5.250% Senior Notes due 2025 (“2025 CQP Senior Notes”)
|
|
1,500
|
|
|
1,500
|
|
||
5.625% Senior Notes due 2026 (“2026 CQP Senior Notes”)
|
|
1,100
|
|
|
1,100
|
|
||
2016 CQP Credit Facilities
|
|
—
|
|
|
—
|
|
||
2019 CQP Credit Facilities
|
|
649
|
|
|
—
|
|
||
CCH
|
|
|
|
|
||||
7.000% Senior Secured Notes due 2024 (“2024 CCH Senior Notes”)
|
|
1,250
|
|
|
1,250
|
|
||
5.875% Senior Secured Notes due 2025 (“2025 CCH Senior Notes”)
|
|
1,500
|
|
|
1,500
|
|
||
5.125% Senior Secured Notes due 2027 (“2027 CCH Senior Notes”)
|
|
1,500
|
|
|
1,500
|
|
||
CCH Credit Facility
|
|
6,138
|
|
|
5,156
|
|
||
CCH HoldCo II
|
|
|
|
|
||||
11.0% Convertible Senior Secured Notes due 2025 (“2025 CCH HoldCo II Convertible Senior Notes”)
|
|
1,536
|
|
|
1,455
|
|
||
Cheniere
|
|
|
|
|
||||
4.875% Convertible Unsecured Notes due 2021 (“2021 Cheniere Convertible Unsecured Notes”)
|
|
1,248
|
|
|
1,218
|
|
||
4.25% Convertible Senior Notes due 2045 (“2045 Cheniere Convertible Senior Notes”)
|
|
625
|
|
|
625
|
|
||
$1.25 billion Cheniere Revolving Credit Facility (“Cheniere Revolving Credit Facility”)
|
|
—
|
|
|
—
|
|
||
Unamortized premium, discount and debt issuance costs, net
|
|
(752
|
)
|
|
(775
|
)
|
||
Total long-term debt, net
|
|
29,944
|
|
|
28,179
|
|
||
|
|
|
|
|
||||
Current debt:
|
|
|
|
|
||||
$1.2 billion SPL Working Capital Facility (“SPL Working Capital Facility”)
|
|
—
|
|
|
—
|
|
||
$1.2 billion CCH Working Capital Facility (“CCH Working Capital Facility”)
|
|
—
|
|
|
168
|
|
||
Cheniere Marketing trade finance facilities
|
|
—
|
|
|
71
|
|
||
Total current debt
|
|
—
|
|
|
239
|
|
||
|
|
|
|
|
||||
Total debt, net
|
|
$
|
29,944
|
|
|
$
|
28,418
|
|
|
|
SPL Working Capital Facility (1)
|
|
2019 CQP Credit Facilities
|
|
CCH Credit Facility
|
|
CCH Working Capital Facility
|
|
Cheniere Revolving Credit Facility
|
||||||||||
Original facility size
|
|
$
|
1,200
|
|
|
$
|
1,500
|
|
|
$
|
8,404
|
|
|
$
|
350
|
|
|
$
|
750
|
|
Incremental commitments
|
|
—
|
|
|
—
|
|
|
1,566
|
|
|
850
|
|
|
500
|
|
|||||
Less:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Outstanding balance
|
|
—
|
|
|
649
|
|
|
6,138
|
|
|
—
|
|
|
—
|
|
|||||
Commitments prepaid or terminated
|
|
—
|
|
|
—
|
|
|
3,832
|
|
|
—
|
|
|
—
|
|
|||||
Letters of credit issued
|
|
415
|
|
|
—
|
|
|
—
|
|
|
338
|
|
|
—
|
|
|||||
Available commitment
|
|
$
|
785
|
|
|
$
|
851
|
|
|
$
|
—
|
|
|
$
|
862
|
|
|
$
|
1,250
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest rate on outstanding balance
|
|
LIBOR plus 1.75% or base rate plus 0.75%
|
|
(2)
|
|
LIBOR plus 1.75% or base rate plus 0.75%
|
|
LIBOR plus 1.25% - 1.75% or base rate plus 0.25% - 0.75%
|
|
LIBOR plus 1.75% - 2.50% or base rate plus 0.75% - 1.50%
|
||||||||||
Weighted average interest rate of outstanding balance
|
|
n/a
|
|
3.92%
|
|
4.15%
|
|
n/a
|
|
n/a
|
||||||||||
Maturity date
|
|
December 31, 2020
|
|
May 29, 2024
|
|
June 30, 2024
|
|
June 29, 2023
|
|
December 23, 2022
|
|
(1)
|
The SPL Working Capital Facility was amended in May 2019 in connection with commercialization and financing of Train 6 of the SPL Project. All terms of the SPL Working Capital Facility substantially remained unchanged.
|
(2)
|
LIBOR plus 1.50% or base rate plus 0.50%, with a 0.25% step-up beginning on May 29, 2022 for the CQP Term Facility. LIBOR plus 1.25% to 2.125% or base rate plus 0.25% to 1.125%, depending on the then-current rating of Cheniere Partners for the CQP Revolving Facility.
|
|
|
2021 Cheniere Convertible Unsecured Notes
|
|
2025 CCH HoldCo II Convertible Senior Notes
|
|
2045 Cheniere Convertible Senior Notes
|
||||||
Aggregate original principal
|
|
$
|
1,000
|
|
|
$
|
1,000
|
|
|
$
|
625
|
|
Debt component, net of discount and debt issuance costs
|
|
$
|
1,172
|
|
|
$
|
1,519
|
|
|
$
|
311
|
|
Equity component
|
|
$
|
210
|
|
|
$
|
—
|
|
|
$
|
194
|
|
Interest payment method
|
|
Paid-in-kind
|
|
|
Paid-in-kind (1)
|
|
|
Cash
|
|
|||
Conversion by us (2)
|
|
—
|
|
|
(3)
|
|
|
(4)
|
|
|||
Conversion by holders (2)
|
|
(5)
|
|
|
(6)
|
|
|
(7)
|
|
|||
Conversion basis
|
|
Cash and/or stock
|
|
|
Stock
|
|
|
Cash and/or stock
|
|
|||
Conversion value in excess of principal
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Maturity date
|
|
May 28, 2021
|
|
|
May 13, 2025
|
|
|
March 15, 2045
|
|
|||
Contractual interest rate
|
|
4.875
|
%
|
|
11.0
|
%
|
|
4.25
|
%
|
|||
Effective interest rate (8)
|
|
8.4
|
%
|
|
11.9
|
%
|
|
9.4
|
%
|
|||
Remaining debt discount and debt issuance costs amortization period (9)
|
|
1.9 years
|
|
|
1.3 years
|
|
|
25.7 years
|
|
|
(1)
|
Prior to the substantial completion of Train 2 of the CCL Project, interest will be paid entirely in kind. Following this date, the interest generally must be paid in cash; however, a portion of the interest may be paid in kind under certain specified circumstances.
|
(2)
|
Conversion is subject to various limitations and conditions.
|
(3)
|
Convertible on or after the later of March 1, 2020 and the substantial completion of Train 2 of the CCL Project, provided that our market capitalization is not less than $10.0 billion (“Eligible Conversion Date”). The conversion price is the lower of (1) a 10% discount to the average of the daily volume-weighted average price (“VWAP”) of our common stock for the 90 trading day period prior to the date notice is provided, and (2) a 10% discount to the closing price of our common stock on the trading day preceding the date notice is provided.
|
(4)
|
Redeemable at any time after March 15, 2020 at a redemption price payable in cash equal to the accreted amount of the 2045 Cheniere Convertible Senior Notes to be redeemed, plus accrued and unpaid interest, if any, to such redemption date.
|
(5)
|
Initially convertible at $93.64 (subject to adjustment upon the occurrence of certain specified events), provided that the closing price of our common stock is greater than or equal to the conversion price on the conversion date.
|
(6)
|
Convertible on or after the six-month anniversary of the Eligible Conversion Date, provided that our total market capitalization is not less than $10.0 billion, at a price equal to the average of the daily VWAP of our common stock for the 90 trading day period prior to the date on which notice of conversion is provided.
|
(7)
|
Prior to December 15, 2044, convertible only under certain circumstances as specified in the indenture; thereafter, holders may convert their notes regardless of these circumstances. The conversion rate will initially equal 7.2265 shares of our common stock per $1,000 principal amount of the 2045 Cheniere Convertible Senior Notes, which corresponds to an initial conversion price of approximately $138.38 per share of our common stock (subject to adjustment upon the occurrence of certain specified events).
|
(8)
|
Rate to accrete the discounted carrying value of the convertible notes to the face value over the remaining amortization period.
|
(9)
|
We amortize any debt discount and debt issuance costs using the effective interest over the period through contractual maturity except for the 2025 CCH HoldCo II Convertible Senior Notes, which are amortized through the date they are first convertible by holders into our common stock.
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Interest cost on convertible notes:
|
|
|
|
|
|
|
|
|
||||||||
Interest per contractual rate
|
|
$
|
64
|
|
|
$
|
58
|
|
|
$
|
126
|
|
|
$
|
116
|
|
Amortization of debt discount
|
|
9
|
|
|
8
|
|
|
19
|
|
|
16
|
|
||||
Amortization of debt issuance costs
|
|
3
|
|
|
2
|
|
|
6
|
|
|
4
|
|
||||
Total interest cost related to convertible notes
|
|
76
|
|
|
68
|
|
|
151
|
|
|
136
|
|
||||
Interest cost on debt and finance leases excluding convertible notes
|
|
382
|
|
|
344
|
|
|
755
|
|
|
680
|
|
||||
Total interest cost
|
|
458
|
|
|
412
|
|
|
906
|
|
|
816
|
|
||||
Capitalized interest
|
|
(86
|
)
|
|
(196
|
)
|
|
(287
|
)
|
|
(384
|
)
|
||||
Total interest expense, net
|
|
$
|
372
|
|
|
$
|
216
|
|
|
$
|
619
|
|
|
$
|
432
|
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||
|
|
Carrying
Amount |
|
Estimated
Fair Value |
|
Carrying
Amount |
|
Estimated
Fair Value |
||||||||
Senior notes (1)
|
|
$
|
19,483
|
|
|
$
|
21,499
|
|
|
$
|
19,466
|
|
|
$
|
19,901
|
|
2037 SPL Senior Notes (2)
|
|
791
|
|
|
912
|
|
|
791
|
|
|
817
|
|
||||
Credit facilities (3)
|
|
6,668
|
|
|
6,668
|
|
|
5,294
|
|
|
5,294
|
|
||||
2021 Cheniere Convertible Unsecured Notes (2)
|
|
1,172
|
|
|
1,302
|
|
|
1,126
|
|
|
1,236
|
|
||||
2025 CCH HoldCo II Convertible Senior Notes (2)
|
|
1,519
|
|
|
1,771
|
|
|
1,432
|
|
|
1,612
|
|
||||
2045 Cheniere Convertible Senior Notes (4)
|
|
311
|
|
|
489
|
|
|
310
|
|
|
431
|
|
|
(1)
|
Includes 2021 SPL Senior Notes, 2022 SPL Senior Notes, 2023 SPL Senior Notes, 2024 SPL Senior Notes, 2025 SPL Senior Notes, 2026 SPL Senior Notes, 2027 SPL Senior Notes, 2028 SPL Senior Notes, 2025 CQP Senior Notes, 2026 CQP Senior Notes, 2024 CCH Senior Notes, 2025 CCH Senior Notes and 2027 CCH Senior Notes. The Level 2 estimated fair value was based on quotes obtained from broker-dealers or market makers of these senior notes and other similar instruments.
|
(2)
|
The Level 3 estimated fair value was calculated based on inputs that are observable in the market or that could be derived from, or corroborated with, observable market data, including our stock price and interest rates based on debt issued by parties with comparable credit ratings to us and inputs that are not observable in the market.
|
(3)
|
Includes SPL Working Capital Facility, 2016 CQP Credit Facilities, 2019 CQP Credit Facilities, CCH Credit Facility, CCH Working Capital Facility, Cheniere Revolving Credit Facility and Cheniere Marketing trade finance facilities. The Level 3 estimated fair value approximates the principal amount because the interest rates are variable and reflective of market rates and the debt may be repaid, in full or in part, at any time without penalty.
|
(4)
|
The Level 1 estimated fair value was based on unadjusted quoted prices in active markets for identical liabilities that we had the ability to access at the measurement date.
|
|
Consolidated Balance Sheet Location
|
|
June 30, 2019
|
||
Right-of-use assets—Operating
|
Operating lease assets, net
|
|
$
|
502
|
|
Right-of-use assets—Financing
|
Property, plant and equipment, net
|
|
58
|
|
|
Total right-of-use assets
|
|
|
$
|
560
|
|
|
|
|
|
||
Current operating lease liabilities
|
Current operating lease liabilities
|
|
$
|
292
|
|
Current finance lease liabilities
|
Other current liabilities
|
|
1
|
|
|
Non-current operating lease liabilities
|
Non-current operating lease liabilities
|
|
202
|
|
|
Non-current finance lease liabilities
|
Non-current finance lease liabilities
|
|
58
|
|
|
Total lease liabilities
|
|
|
$
|
553
|
|
|
Consolidated Statement of Operations Location
|
|
Three Months Ended June 30, 2019
|
|
Six Months Ended June 30, 2019
|
||||
Operating lease cost (1)
|
Operating costs and expenses (2)
|
|
$
|
140
|
|
|
$
|
277
|
|
Finance lease cost:
|
|
|
|
|
|
||||
Amortization of right-of-use assets
|
Depreciation and amortization expense
|
|
1
|
|
|
2
|
|
||
Interest on lease liabilities
|
Interest expense, net of capitalized interest
|
|
3
|
|
|
5
|
|
||
Total lease cost
|
|
|
$
|
144
|
|
|
$
|
284
|
|
|
(1)
|
Includes $46 million and $93 million of short-term lease costs and $8 million and $13 million of variable lease costs incurred during the three and six months ended June 30, 2019, respectively.
|
(2)
|
Presented in cost of sales, operating and maintenance expense or selling, general and administrative expense consistent with the nature of the asset under lease.
|
Years Ending December 31,
|
Operating Leases (1)
|
|
Finance Leases
|
||||
2019
|
$
|
192
|
|
|
$
|
5
|
|
2020
|
167
|
|
|
10
|
|
||
2021
|
39
|
|
|
10
|
|
||
2022
|
19
|
|
|
10
|
|
||
2023
|
19
|
|
|
10
|
|
||
Thereafter
|
166
|
|
|
146
|
|
||
Total lease payments
|
602
|
|
|
191
|
|
||
Less: Interest
|
(108
|
)
|
|
(132
|
)
|
||
Present value of lease liabilities
|
$
|
494
|
|
|
$
|
59
|
|
|
(1)
|
Does not include $1.6 billion of legally binding minimum lease payments for vessel charters which were executed as of June 30, 2019 but will commence primarily between 2020 and 2021 and have lease terms of up to seven years.
|
Years Ending December 31,
|
Operating Leases (1)
|
|
Capital Leases (2)
|
||||
2019 (3)
|
$
|
380
|
|
|
$
|
5
|
|
2020
|
184
|
|
|
5
|
|
||
2021
|
238
|
|
|
5
|
|
||
2022
|
264
|
|
|
5
|
|
||
2023
|
264
|
|
|
5
|
|
||
Thereafter
|
999
|
|
|
73
|
|
||
Total lease payments
|
2,329
|
|
|
98
|
|
||
Less: Interest
|
—
|
|
|
(39
|
)
|
||
Present value of lease liabilities
|
$
|
2,329
|
|
|
$
|
59
|
|
|
(1)
|
Includes certain lease option renewals that are reasonably assured and payments for certain non-lease components. Also includes $79 million in payments for short-term leases and $1.6 billion in payments for LNG vessel charters which were previously executed but will commence primarily between 2020 and 2021.
|
(2)
|
Does not include payments for non-lease components of $98 million.
|
(3)
|
Does not include $43 million in aggregate payments we will receive from our LNG vessel subcharters.
|
|
June 30, 2019
|
||
|
Operating Leases
|
|
Finance Leases
|
Weighted-average remaining lease term (in years)
|
7.2
|
|
19.3
|
Weighted-average discount rate (1)
|
5.4%
|
|
16.2%
|
|
(1)
|
The finance leases commenced prior to the adoption of ASC 842. In accordance with previous accounting guidance, the implied rate is based on the fair value of the underlying assets.
|
|
Six Months Ended June 30, 2019
|
||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
||
Operating cash flows from operating leases
|
$
|
174
|
|
Operating cash flows from finance leases
|
5
|
|
|
Financing cash flows from finance leases
|
—
|
|
|
Right-of-use assets obtained in exchange for new operating lease liabilities
|
106
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
LNG revenues
|
|
$
|
2,080
|
|
|
$
|
1,516
|
|
|
$
|
4,147
|
|
|
$
|
3,668
|
|
Regasification revenues
|
|
67
|
|
|
65
|
|
|
133
|
|
|
130
|
|
||||
Other revenues
|
|
21
|
|
|
13
|
|
|
36
|
|
|
23
|
|
||||
Total revenues from customers
|
|
2,168
|
|
|
1,594
|
|
|
4,316
|
|
|
3,821
|
|
||||
Net derivative gains (losses) (1)
|
|
93
|
|
|
(64
|
)
|
|
169
|
|
|
(60
|
)
|
||||
Other revenues (2)
|
|
31
|
|
|
13
|
|
|
68
|
|
|
24
|
|
||||
Total revenues
|
|
$
|
2,292
|
|
|
$
|
1,543
|
|
|
$
|
4,553
|
|
|
$
|
3,785
|
|
|
(1)
|
(2)
|
Includes revenues from LNG vessel subcharters. See Note 11—Leases for additional information about our subleases.
|
|
|
June 30,
|
|
December 31,
|
||||
|
|
2019
|
|
2018
|
||||
Contract assets
|
|
$
|
8
|
|
|
$
|
—
|
|
|
|
Six Months Ended June 30, 2019
|
||
Deferred revenues, beginning of period
|
|
$
|
139
|
|
Cash received but not yet recognized
|
|
136
|
|
|
Revenue recognized from prior period deferral
|
|
(139
|
)
|
|
Deferred revenues, end of period
|
|
$
|
136
|
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||
|
|
Unsatisfied Transaction Price (in billions)
|
|
Weighted Average Recognition Timing (years) (1)
|
|
Unsatisfied Transaction Price (in billions)
|
|
Weighted Average Recognition Timing (years) (1)
|
||||
LNG revenues
|
|
$
|
108.4
|
|
|
11
|
|
$
|
106.6
|
|
|
11
|
Regasification revenues
|
|
2.5
|
|
|
5
|
|
2.6
|
|
|
6
|
||
Total revenues
|
|
$
|
110.9
|
|
|
|
|
$
|
109.2
|
|
|
|
|
(1)
|
The weighted average recognition timing represents an estimate of the number of years during which we shall have recognized half of the unsatisfied transaction price.
|
(1)
|
We omit from the table above all performance obligations that are part of a contract that has an original expected duration of one year or less.
|
(2)
|
We omit from the table above all variable consideration that is allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct good or service that forms part of a single performance obligation when that performance obligation qualifies as a series. The table above excludes substantially all variable consideration under our SPAs and TUAs. The amount of revenue from variable fees that is not included in the transaction price will vary based on the future prices of Henry Hub throughout the contract terms, to the extent customers elect to take delivery of their LNG, and adjustments to the consumer price index. Certain of our contracts contain additional variable consideration based on the outcome of contingent events and the movement of various indexes. We have not included such variable consideration in the transaction price to the extent the consideration is considered constrained due to the uncertainty of ultimate pricing and receipt. Approximately 52% and 55% of our LNG revenues from contracts with a duration of over one year during the three months ended June 30, 2019 and 2018, respectively, and approximately 55% of our LNG revenues from contracts with a duration of over one year during
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Share-based compensation costs, pre-tax:
|
|
|
|
|
|
|
|
|
||||||||
Equity awards
|
|
$
|
32
|
|
|
$
|
22
|
|
|
$
|
61
|
|
|
$
|
39
|
|
Liability awards
|
|
2
|
|
|
15
|
|
|
5
|
|
|
32
|
|
||||
Total share-based compensation
|
|
34
|
|
|
37
|
|
|
66
|
|
|
71
|
|
||||
Capitalized share-based compensation
|
|
(1
|
)
|
|
(7
|
)
|
|
(5
|
)
|
|
(13
|
)
|
||||
Total share-based compensation expense
|
|
$
|
33
|
|
|
$
|
30
|
|
|
$
|
61
|
|
|
$
|
58
|
|
Tax benefit associated with share-based compensation expense
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
2
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
257.4
|
|
|
242.8
|
|
|
257.3
|
|
|
239.2
|
|
||||
Dilutive unvested stock
|
|
—
|
|
|
—
|
|
|
1.3
|
|
|
2.5
|
|
||||
Diluted
|
|
257.4
|
|
|
242.8
|
|
|
258.6
|
|
|
241.7
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Basic net income (loss) per share attributable to common stockholders
|
|
$
|
(0.44
|
)
|
|
$
|
(0.07
|
)
|
|
$
|
0.11
|
|
|
$
|
1.42
|
|
Diluted net income (loss) per share attributable to common stockholders
|
|
$
|
(0.44
|
)
|
|
$
|
(0.07
|
)
|
|
$
|
0.11
|
|
|
$
|
1.40
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Unvested stock (1)
|
|
3.8
|
|
|
5.2
|
|
|
3.8
|
|
|
2.6
|
|
Convertible notes (2)
|
|
17.8
|
|
|
17.2
|
|
|
17.8
|
|
|
17.2
|
|
Total potentially dilutive common shares
|
|
21.6
|
|
|
22.4
|
|
|
21.6
|
|
|
19.8
|
|
|
(1)
|
Does not include 0.6 million shares for each of the three and six months ended June 30, 2019 and 0.4 million shares for each of the three and six months ended June 30, 2018 of unvested stock because the performance conditions had not yet been satisfied as of June 30, 2019 and 2018, respectively.
|
(2)
|
Includes number of shares in aggregate issuable upon conversion of the 2021 Cheniere Convertible Unsecured Notes and the 2045 Cheniere Convertible Senior Notes. There were no shares included in the computation of diluted net income (loss) per share for the 2025 CCH HoldCo II Convertible Senior Notes because substantive non-market-based contingencies underlying the eligible conversion date have not been met as of June 30, 2019.
|
|
|
Percentage of Total Revenues from External Customers
|
|
Percentage of Accounts Receivable from External Customers
|
||||||||
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
June 30,
|
|
December 31,
|
||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Customer A
|
|
17%
|
|
21%
|
|
18%
|
|
19%
|
|
11%
|
|
21%
|
Customer B
|
|
11%
|
|
17%
|
|
11%
|
|
14%
|
|
15%
|
|
14%
|
Customer C
|
|
11%
|
|
18%
|
|
12%
|
|
22%
|
|
15%
|
|
18%
|
Customer D
|
|
12%
|
|
16%
|
|
13%
|
|
11%
|
|
14%
|
|
*
|
Customer E
|
|
*
|
|
*
|
|
*
|
|
*
|
|
13%
|
|
*
|
Customer F
|
|
*
|
|
*
|
|
*
|
|
*
|
|
*
|
|
10%
|
|
|
|
Six Months Ended June 30,
|
||||||
|
|
2019
|
|
2018
|
||||
Cash paid during the period for interest on debt and finance leases, net of amounts capitalized
|
|
$
|
271
|
|
|
$
|
282
|
|
Cash paid for income taxes
|
|
20
|
|
|
4
|
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
statements that we expect to commence or complete construction of our proposed LNG terminals, liquefaction facilities, pipeline facilities or other projects, or any expansions or portions thereof, by certain dates, or at all;
|
•
|
statements regarding future levels of domestic and international natural gas production, supply or consumption or future levels of LNG imports into or exports from North America and other countries worldwide or purchases of natural gas, regardless of the source of such information, or the transportation or other infrastructure or demand for and prices related to natural gas, LNG or other hydrocarbon products;
|
•
|
statements regarding any financing transactions or arrangements, or our ability to enter into such transactions;
|
•
|
statements relating to the construction of our Trains and pipelines, including statements concerning the engagement of any EPC contractor or other contractor and the anticipated terms and provisions of any agreement with any EPC or other contractor, and anticipated costs related thereto;
|
•
|
statements regarding any SPA or other agreement to be entered into or performed substantially in the future, including any revenues anticipated to be received and the anticipated timing thereof, and statements regarding the amounts of total LNG regasification, natural gas liquefaction or storage capacities that are, or may become, subject to contracts;
|
•
|
statements regarding counterparties to our commercial contracts, construction contracts, and other contracts;
|
•
|
statements regarding our planned development and construction of additional Trains and pipelines, including the financing of such Trains or pipelines;
|
•
|
statements that our Trains, when completed, will have certain characteristics, including amounts of liquefaction capacities;
|
•
|
statements regarding our business strategy, our strengths, our business and operation plans or any other plans, forecasts, projections, or objectives, including anticipated revenues, capital expenditures, maintenance and operating costs and cash flows, any or all of which are subject to change;
|
•
|
statements regarding legislative, governmental, regulatory, administrative or other public body actions, approvals, requirements, permits, applications, filings, investigations, proceedings or decisions;
|
•
|
statements regarding marketing of volumes expected to be made available to our integrated marketing function; and
|
•
|
any other statements that relate to non-historical or future information.
|
•
|
Overview of Business
|
•
|
Overview of Significant Events
|
•
|
Liquidity and Capital Resources
|
•
|
Results of Operations
|
•
|
Off-Balance Sheet Arrangements
|
•
|
Summary of Critical Accounting Estimates
|
•
|
Recent Accounting Standards
|
•
|
In June 2019, our board of directors (the “Board”) appointed Michele A. Evans to serve as a member of the Board. Ms. Evans was also appointed to the Audit Committee and the Governance and Nominating Committee of the Board.
|
•
|
In May 2019, our wholly owned subsidiary CCL Stage III entered into an integrated production marketing transaction with Apache Corporation to purchase 140,000 MMBtu per day of natural gas, for a term of approximately 15 years, at a price based on international LNG indices, net of a fixed liquefaction fee and certain costs incurred by Cheniere.
|
•
|
In May 2019, the board of directors of the general partner of Cheniere Partners made a positive FID with respect to Train 6 of the SPL Project and issued a full notice to proceed with construction to Bechtel Oil, Gas and Chemicals, Inc. (“Bechtel”) in June 2019.
|
•
|
In March 2019, we received a positive Environmental Assessment from the FERC relating to Corpus Christi Stage 3 and anticipate receiving all remaining necessary regulatory approvals for the project by the end of 2019.
|
•
|
In February 2019, Midship Pipeline, in which we hold an indirect equity interest, issued full notice to proceed to construct the Midship natural gas pipeline and related compression and interconnect facilities following receipt of final Notice to Proceed from the FERC and obtaining financing to construct the Midship Project.
|
•
|
As of July 31, 2019, over 750 cumulative LNG cargoes have been produced, loaded and exported from the Liquefaction Projects.
|
•
|
In June 2019, first LNG production from Train 2 of the CCL Project occurred, and the first commissioning cargo from Train 2 was exported.
|
•
|
In February 2019 and March 2019, CCL and SPL achieved substantial completion of Train 1 of the CCL Project and Train 5 of the SPL Project, respectively, and commenced operating activities.
|
•
|
In June 2019, we announced a capital allocation framework which prioritizes investments in the growth of our liquefaction platform, improvement of consolidated leverage metrics, and a return of excess capital to shareholders under a three-year, $1.0 billion share repurchase program.
|
•
|
In June 2019, the date of first commercial delivery was reached under the 20-year SPAs with Endesa S.A. and PT Pertamina (Persero) relating to Train 1 of the CCL Project.
|
•
|
In June 2019, CCH and its subsidiaries, as guarantors, entered into a note purchase agreement (“CCH Note Purchase Agreement”) with Allianz Global Investors GmbH to issue an aggregate principal amount of $727 million of 4.80% Senior Secured Notes due 2039 (the “2039 CCH Senior Notes”), with closing and funding of the 2039 CCH Senior Notes conditional in part on the 2039 CCH Senior Notes receiving at least two investment grade ratings within 18 months of the date of the CCH Note Purchase Agreement.
|
•
|
In May 2019, Cheniere Partners entered into five-year, $1.5 billion credit facilities (the “2019 CQP Credit Facilities”), which consist of a $750 million delayed draw term loan (“CQP Term Facility”) and a $750 million revolving credit facility (“CQP Revolving Facility”), to fund a portion of the development and construction of Train 6, a third LNG berth and supporting infrastructure at the SPL Project.
|
•
|
In March 2019, the date of first commercial delivery was reached under the 20-year SPA with BG Gulf Coast LNG, LLC relating to Train 4 of the SPL Project.
|
•
|
SPL through project debt and borrowings, operating cash flows and equity contributions from Cheniere Partners;
|
•
|
Cheniere Partners through operating cash flows from SPLNG, SPL and CTPL and debt or equity offerings;
|
•
|
CCH Group through operating cash flows from CCL and CCP, project debt and borrowings and equity contributions from Cheniere; and
|
•
|
Cheniere through project financing, existing unrestricted cash, debt and equity offerings by us or our subsidiaries, operating cash flows, services fees from our subsidiaries and distributions from our investment in Cheniere Partners.
|
|
June 30,
|
|
December 31,
|
||||
|
2019
|
|
2018
|
||||
Cash and cash equivalents
|
$
|
2,279
|
|
|
$
|
981
|
|
Restricted cash designated for the following purposes:
|
|
|
|
||||
SPL Project
|
596
|
|
|
756
|
|
||
Cheniere Partners and cash held by guarantor subsidiaries
|
—
|
|
|
785
|
|
||
CCL Project
|
279
|
|
|
289
|
|
||
Other
|
286
|
|
|
345
|
|
||
Available commitments under the following credit facilities:
|
|
|
|
||||
$1.2 billion SPL Working Capital Facility (“SPL Working Capital Facility”)
|
785
|
|
|
775
|
|
||
$1.5 billion 2019 CQP Credit Facilities
|
851
|
|
|
—
|
|
||
$2.8 billion Cheniere Partners’ Credit Facilities (“2016 CQP Credit Facilities”)
|
—
|
|
|
115
|
|
||
Amended and restated CCH Credit Facility (“CCH Credit Facility”)
|
—
|
|
|
982
|
|
||
$1.2 billion CCH Working Capital Facility (“CCH Working Capital Facility”)
|
862
|
|
|
716
|
|
||
$1.25 billion Cheniere Revolving Credit Facility (“Cheniere Revolving Credit Facility”)
|
1,250
|
|
|
1,250
|
|
|
|
SPL Train 6
|
|
Overall project completion percentage
|
|
32.4%
|
|
Completion percentage of:
|
|
|
|
Engineering
|
|
74.1%
|
|
Procurement
|
|
48.2%
|
|
Subcontract work
|
|
30.7%
|
|
Construction
|
|
2.1%
|
|
Date of expected substantial completion
|
|
1H 2023
|
•
|
Trains 1 through 4—FTA countries for a 30-year term, which commenced on May 15, 2016, and non-FTA countries for a 20-year term, which commenced on June 3, 2016, in an amount up to a combined total of the equivalent of 16 mtpa (approximately 803 Bcf/yr of natural gas).
|
•
|
Trains 1 through 4—FTA countries for a 25-year term and non-FTA countries for a 20-year term in an amount up to a combined total of the equivalent of approximately 203 Bcf/yr of natural gas (approximately 4 mtpa).
|
•
|
Trains 5 and 6—FTA countries and non-FTA countries for a 20-year term, in an amount up to a combined total of 503.3 Bcf/yr of natural gas (approximately 10 mtpa).
|
|
|
June 30,
|
|
December 31,
|
||||
|
|
2019
|
|
2018
|
||||
Senior notes (1)
|
|
$
|
16,250
|
|
|
$
|
16,250
|
|
Credit facilities outstanding balance (2)
|
|
649
|
|
|
—
|
|
||
Letters of credit issued (3)
|
|
415
|
|
|
425
|
|
||
Available commitments under credit facilities (3)
|
|
1,636
|
|
|
775
|
|
||
Total capital resources from borrowings and available commitments (4)
|
|
$
|
18,950
|
|
|
$
|
17,450
|
|
|
(1)
|
Includes SPL’s 5.625% Senior Secured Notes due 2021, 6.25% Senior Secured Notes due 2022, 5.625% Senior Secured Notes due 2023, 5.75% Senior Secured Notes due 2024, 5.625% Senior Secured Notes due 2025, 5.875% Senior Secured Notes due 2026 (the “2026 SPL Senior Notes”), 5.00% Senior Secured Notes due 2027 (the “2027 SPL Senior Notes”), 4.200% Senior Secured Notes due 2028 (the “2028 SPL Senior Notes”) and 5.00% Senior Secured Notes due 2037 (the “2037 SPL Senior Notes”) (collectively, the “SPL Senior Notes”) and Cheniere Partners’ 2025 CQP Senior Notes and 2026 CQP Senior Notes.
|
(2)
|
Includes outstanding balances under the SPL Working Capital Facility and 2019 CQP Credit Facilities, inclusive of any portion of the 2019 CQP Credit Facilities that may be used for general corporate purposes.
|
(3)
|
Consists of SPL Working Capital Facility and 2019 CQP Credit Facilities. Balance at December 31, 2018 did not include the letters of credit issued or available commitments under the terminated 2016 CQP Credit Facilities, which were not specifically for the Sabine Pass LNG Terminal.
|
(4)
|
Does not include Cheniere’s additional borrowings from the 2021 Cheniere Convertible Unsecured Notes and the 2045 Cheniere Convertible Senior Notes, which may be used for the Sabine Pass LNG Terminal.
|
|
CCL Stage 1
|
|
CCL Stage 2
|
||
Overall project completion percentage
|
99.5%
|
|
62.4%
|
||
Completion percentage of:
|
|
|
|
|
|
Engineering
|
100%
|
|
94.3%
|
||
Procurement
|
100%
|
|
92.5%
|
||
Subcontract work
|
96.4%
|
|
12.2%
|
||
Construction
|
99.2%
|
|
29.2%
|
||
Expected date of substantial completion
|
Train 2
|
3Q 2019
|
|
Train 3
|
2H 2021
|
•
|
CCL Project—FTA countries for a 25-year term and to non-FTA countries for a 20-year term up to a combined total of the equivalent of 767 Bcf/yr (approximately 15 mtpa) of natural gas.
|
•
|
Corpus Christi Stage 3—FTA countries for a 20-year term in an amount equivalent to 514 Bcf/yr (approximately 10 mtpa) of natural gas (the “Stage 3 FTA”). The application for authorization to export that same 514 Bcf/yr of domestically produced LNG by vessel to non-FTA countries is currently pending before the DOE (the “Stage 3 Non-FTA”).
|
|
|
June 30,
|
|
December 31,
|
||||
|
|
2019
|
|
2018
|
||||
Senior notes (1)
|
|
$
|
4,250
|
|
|
$
|
4,250
|
|
11.0% Convertible Senior Secured Notes due 2025 (2)
|
|
1,000
|
|
|
1,000
|
|
||
Credit facilities outstanding balance (3)
|
|
6,138
|
|
|
5,324
|
|
||
Letters of credit issued (3)
|
|
338
|
|
|
316
|
|
||
Available commitments under credit facilities (3)
|
|
862
|
|
|
1,698
|
|
||
Total capital resources from borrowings and available commitments (4)
|
|
$
|
12,588
|
|
|
$
|
12,588
|
|
|
(1)
|
Includes CCH’s 7.000% Senior Secured Notes due 2024 (the “2024 CCH Senior Notes”), 5.875% Senior Secured Notes due 2025 (the “2025 CCH Senior Notes”) and 5.125% Senior Secured Notes due 2027 (the “2027 CCH Senior Notes”) (collectively, the “CCH Senior Notes”).
|
(2)
|
Aggregate original principal amount before debt discount and debt issuance costs.
|
(3)
|
Includes CCH Credit Facility and CCH Working Capital Facility.
|
(4)
|
Does not include Cheniere’s additional borrowings from 2021 Cheniere Convertible Unsecured Notes, 2045 Cheniere Convertible Senior Notes and Cheniere Revolving Credit Facility, which may be used for the CCL Project.
|
|
Six Months Ended June 30,
|
||||||
|
2019
|
|
2018
|
||||
Operating cash flows
|
$
|
760
|
|
|
$
|
982
|
|
Investing cash flows
|
(1,542
|
)
|
|
(1,492
|
)
|
||
Financing cash flows
|
1,066
|
|
|
1,168
|
|
||
|
|
|
|
||||
Net increase in cash, cash equivalents and restricted cash
|
284
|
|
|
658
|
|
||
Cash, cash equivalents and restricted cash—beginning of period
|
3,156
|
|
|
2,613
|
|
||
Cash, cash equivalents and restricted cash—end of period
|
$
|
3,440
|
|
|
$
|
3,271
|
|
•
|
$982 million of borrowings under the CCH Credit Facility;
|
•
|
$649 million of borrowings under the 2019 CQP Credit Facilities;
|
•
|
$390 million of borrowings and $558 million in repayments under the CCH Working Capital Facility;
|
•
|
$290 million of distributions to non-controlling interest by Cheniere Partners;
|
•
|
$72 million of net repayments related to our Cheniere Marketing trade financing facilities;
|
•
|
$20 million of debt issuance costs primarily related to up-front fees paid upon the closing of the 2019 CQP Credit Facilities; and
|
•
|
$14 million paid for tax withholdings for share-based compensation.
|
•
|
$1.7 billion of borrowings and $281 million in repayments under the CCH Credit Facility;
|
•
|
$14 million of borrowings under the CCH Working Capital Facility;
|
•
|
$123 million of net borrowings related to our Cheniere Marketing trade financing facilities;
|
•
|
$46 million of debt issuance costs related to up-front fees paid for the amendment and restatement of the CCH Credit Facility and the CCH Working Capital Facility;
|
•
|
$8 million in debt extinguishment costs;
|
•
|
$288 million of distributions and dividends to non-controlling interest by Cheniere Partners and Cheniere Holdings; and
|
•
|
$8 million paid for tax withholdings for share-based compensation.
|
|
Three Months Ended June 30, 2019
|
|
Six Months Ended June 30, 2019
|
||||||||
(in TBtu)
|
Operational
|
|
Commissioning
|
|
Operational
|
|
Commissioning
|
||||
Volumes loaded during the current period
|
361
|
|
|
3
|
|
|
645
|
|
|
28
|
|
Volumes loaded during the prior period but recognized during the current period
|
27
|
|
|
—
|
|
|
25
|
|
|
3
|
|
Less: volumes loaded during the current period and in transit at the end of the period
|
(36
|
)
|
|
(3
|
)
|
|
(36
|
)
|
|
(3
|
)
|
Total volumes recognized in the current period
|
352
|
|
|
—
|
|
|
634
|
|
|
28
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||
(in millions)
|
2019
|
|
2018
|
|
Change
|
|
2019
|
|
2018
|
|
Change
|
||||||||||||
LNG revenues
|
$
|
2,173
|
|
|
$
|
1,442
|
|
|
$
|
731
|
|
|
$
|
4,316
|
|
|
$
|
3,608
|
|
|
$
|
708
|
|
Regasification revenues
|
67
|
|
|
65
|
|
|
2
|
|
|
133
|
|
|
130
|
|
|
3
|
|
||||||
Other revenues
|
52
|
|
|
36
|
|
|
16
|
|
|
104
|
|
|
47
|
|
|
57
|
|
||||||
Total revenues
|
$
|
2,292
|
|
|
$
|
1,543
|
|
|
$
|
749
|
|
|
$
|
4,553
|
|
|
$
|
3,785
|
|
|
$
|
768
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
LNG revenues (in millions):
|
|
|
|
|
|
|
|
||||||||
LNG from the Liquefaction Projects sold under third party long-term agreements (1)
|
$
|
1,393
|
|
|
$
|
1,118
|
|
|
$
|
2,910
|
|
|
$
|
2,111
|
|
LNG from the Liquefaction Projects sold by our integrated marketing function under short-term agreements
|
566
|
|
|
282
|
|
|
905
|
|
|
1,303
|
|
||||
LNG procured from third parties
|
31
|
|
|
76
|
|
|
184
|
|
|
186
|
|
||||
Other revenues and derivative gains (losses)
|
183
|
|
|
(34
|
)
|
|
317
|
|
|
8
|
|
||||
Total LNG revenues
|
$
|
2,173
|
|
|
$
|
1,442
|
|
|
$
|
4,316
|
|
|
$
|
3,608
|
|
|
|
|
|
|
|
|
|
||||||||
Volumes sold as LNG revenues (in TBtu):
|
|
|
|
|
|
|
|
||||||||
LNG from the Liquefaction Projects sold under third party long-term agreements (1)
|
241
|
|
|
189
|
|
|
477
|
|
|
354
|
|
||||
LNG from the Liquefaction Projects sold by our integrated marketing function under short-term agreements
|
111
|
|
|
41
|
|
|
157
|
|
|
149
|
|
||||
LNG procured from third parties
|
5
|
|
|
10
|
|
|
23
|
|
|
21
|
|
||||
Total volumes sold as LNG revenues
|
357
|
|
|
240
|
|
|
657
|
|
|
524
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||
(in millions)
|
2019
|
|
2018
|
|
Change
|
|
2019
|
|
2018
|
|
Change
|
||||||||||||
Cost of sales
|
$
|
1,277
|
|
|
$
|
873
|
|
|
$
|
404
|
|
|
$
|
2,491
|
|
|
$
|
2,051
|
|
|
$
|
440
|
|
Operating and maintenance expense
|
295
|
|
|
147
|
|
|
148
|
|
|
516
|
|
|
287
|
|
|
229
|
|
||||||
Development expense
|
3
|
|
|
3
|
|
|
—
|
|
|
4
|
|
|
4
|
|
|
—
|
|
||||||
Selling, general and administrative expense
|
77
|
|
|
73
|
|
|
4
|
|
|
150
|
|
|
140
|
|
|
10
|
|
||||||
Depreciation and amortization expense
|
204
|
|
|
111
|
|
|
93
|
|
|
348
|
|
|
220
|
|
|
128
|
|
||||||
Impairment expense and loss on disposal of assets
|
4
|
|
|
—
|
|
|
4
|
|
|
6
|
|
|
—
|
|
|
6
|
|
||||||
Total operating costs and expenses
|
$
|
1,860
|
|
|
$
|
1,207
|
|
|
$
|
653
|
|
|
$
|
3,515
|
|
|
$
|
2,702
|
|
|
$
|
813
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||
(in millions)
|
2019
|
|
2018
|
|
Change
|
|
2019
|
|
2018
|
|
Change
|
||||||||||||
Interest expense, net of capitalized interest
|
$
|
372
|
|
|
$
|
216
|
|
|
$
|
156
|
|
|
$
|
619
|
|
|
$
|
432
|
|
|
$
|
187
|
|
Loss on modification or extinguishment of debt
|
—
|
|
|
15
|
|
|
(15
|
)
|
|
—
|
|
|
15
|
|
|
(15
|
)
|
||||||
Derivative loss (gain), net
|
74
|
|
|
(32
|
)
|
|
106
|
|
|
109
|
|
|
(109
|
)
|
|
218
|
|
||||||
Other income
|
(16
|
)
|
|
(10
|
)
|
|
(6
|
)
|
|
(32
|
)
|
|
(17
|
)
|
|
(15
|
)
|
||||||
Total other expense
|
$
|
430
|
|
|
$
|
189
|
|
|
$
|
241
|
|
|
$
|
696
|
|
|
$
|
321
|
|
|
$
|
375
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|||||||||||||||||||
(in millions)
|
2019
|
|
2018
|
|
Change
|
|
2019
|
|
2018
|
|
Change
|
|||||||||||
Income before income taxes and non-controlling interest
|
$
|
2
|
|
|
$
|
147
|
|
|
(145
|
)
|
|
$
|
342
|
|
|
$
|
762
|
|
|
$
|
(420
|
)
|
Income tax benefit (provision)
|
—
|
|
|
3
|
|
|
(3
|
)
|
|
(3
|
)
|
|
(12
|
)
|
|
9
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Effective tax rate
|
—
|
%
|
|
2.0
|
%
|
|
|
|
0.9
|
%
|
|
1.6
|
%
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||
(in millions)
|
2019
|
|
2018
|
|
Change
|
|
2019
|
|
2018
|
|
Change
|
||||||||||||
Net income attributable to non-controlling interest
|
$
|
116
|
|
|
$
|
168
|
|
|
$
|
(52
|
)
|
|
$
|
312
|
|
|
$
|
411
|
|
|
$
|
(99
|
)
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||
|
Fair Value
|
|
Change in Fair Value
|
|
Fair Value
|
|
Change in Fair Value
|
||||||||
Liquefaction Supply Derivatives
|
$
|
90
|
|
|
$
|
127
|
|
|
$
|
(42
|
)
|
|
$
|
6
|
|
LNG Trading Derivatives
|
47
|
|
|
39
|
|
|
(24
|
)
|
|
9
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||
|
Fair Value
|
|
Change in Fair Value
|
|
Fair Value
|
|
Change in Fair Value
|
||||||||
CCH Interest Rate Derivatives
|
$
|
(88
|
)
|
|
$
|
25
|
|
|
$
|
18
|
|
|
$
|
37
|
|
CCH Interest Rate Forward Start Derivatives
|
(7
|
)
|
|
20
|
|
|
—
|
|
|
—
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||
|
Fair Value
|
|
Change in Fair Value
|
|
Fair Value
|
|
Change in Fair Value
|
||||||||
FX Derivatives
|
$
|
10
|
|
|
$
|
1
|
|
|
$
|
15
|
|
|
$
|
1
|
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
ITEM 1A.
|
RISK FACTORS
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
Period
|
|
Total Number of Shares Purchased (1)
|
|
Average Price Paid Per Share (2)
|
|
Total Number of Shares Purchased as a Part of Publicly Announced Plans
|
|
Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans (3)
|
April 1 - 30, 2019
|
|
425
|
|
$64.70
|
|
—
|
|
—
|
May 1 - 31, 2019
|
|
13,973
|
|
$67.87
|
|
—
|
|
—
|
June 1 - 30, 2019
|
|
45,266
|
|
$68.24
|
|
44,600
|
|
$996,954,020
|
|
(1)
|
Includes shares surrendered to us by participants in our share-based compensation plans to settle the participants’ personal tax liabilities that resulted from the lapsing of restrictions on shares awarded to the participants under these plans.
|
(2)
|
The price paid per share was based on the closing trading price of our common stock on the dates on which we repurchased the shares.
|
(3)
|
On June 3, 2019, we announced that our Board authorized a 3-year, $1 billion share repurchase program.
|
ITEM 6.
|
EXHIBITS
|
Exhibit No.
|
|
Description
|
10.1
|
|
|
10.2*
|
|
|
10.3*
|
|
|
10.4*
|
|
|
10.5*
|
|
|
10.6*
|
|
|
31.1*
|
|
|
31.2*
|
|
|
32.1**
|
|
|
32.2**
|
|
|
101.INS*
|
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
|
101.SCH*
|
|
Inline XBRL Taxonomy Extension Schema Document
|
101.CAL*
|
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF*
|
|
Inline XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB*
|
|
Inline XBRL Taxonomy Extension Labels Linkbase Document
|
101.PRE*
|
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
|
*
|
Filed herewith.
|
**
|
Furnished herewith.
|
|
|
CHENIERE ENERGY, INC.
|
|
|
|
|
|
Date:
|
August 7, 2019
|
By:
|
/s/ Michael J. Wortley
|
|
|
|
Michael J. Wortley
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
(on behalf of the registrant and
as principal financial officer) |
|
|
|
|
Date:
|
August 7, 2019
|
By:
|
/s/ Leonard E. Travis
|
|
|
|
Leonard E. Travis
|
|
|
|
Vice President and Chief Accounting Officer
|
|
|
|
(on behalf of the registrant and
as principal accounting officer) |
|
Section
|
|
Page
|
|
|
|
|
|
|
|
|
ARTICLE I DEFINITIONS AND INTERPRETATION
|
3
|
|
|||
|
|
|
|
||
|
SECTION 1.01.
|
Defined Terms
|
3
|
|
|
|
SECTION 1.02.
|
Principles of Interpretation
|
22
|
|
|
|
SECTION 1.03.
|
UCC Terms
|
22
|
|
|
|
SECTION 1.04.
|
Accounting and Financial Determinations
|
22
|
|
|
|
|
|
|
|
|
ARTICLE II WORKING CAPITAL LOANS, SWING LINE LOANS AND COMMITMENTS
|
22
|
|
|||
|
|
|
|
||
|
SECTION 2.01.
|
Working Capital Loans
|
22
|
|
|
|
SECTION 2.02.
|
Notice of Working Capital Loan Borrowings
|
23
|
|
|
|
SECTION 2.03.
|
Borrowing of Working Capital Loans
|
24
|
|
|
|
SECTION 2.04.
|
Swing Line Loans
|
26
|
|
|
|
SECTION 2.05.
|
Incremental Commitments
|
30
|
|
|
|
SECTION 2.06.
|
Termination or Reduction of Commitments
|
31
|
|
|
|
|
|
|
|
|
ARTICLE III LETTERS OF CREDIT
|
32
|
|
|||
|
|
|
|
||
|
SECTION 3.01.
|
Existing Letters of Credit
|
32
|
|
|
|
SECTION 3.02.
|
Letters of Credit
|
32
|
|
|
|
SECTION 3.03.
|
Reimbursement to Senior Issuing Banks
|
34
|
|
|
|
SECTION 3.04.
|
Obligations Absolute
|
36
|
|
|
|
SECTION 3.05.
|
Liability of Senior Issuing Banks and the Senior Lenders
|
37
|
|
|
|
SECTION 3.06.
|
Resignation as Senior Issuing Bank
|
37
|
|
|
|
|
|
|
|
|
ARTICLE IV REPAYMENTS, INTEREST AND FEES
|
38
|
|
|||
|
|
|
|
||
|
SECTION 4.01.
|
Repayment of LC Loans
|
38
|
|
|
|
SECTION 4.02.
|
Repayment of Working Capital Loans
|
38
|
|
|
|
SECTION 4.03.
|
Repayment of Swing Line Loans
|
38
|
|
|
|
SECTION 4.04.
|
Optional Prepayment of Loans
|
38
|
|
|
|
SECTION 4.05.
|
Interest Payments
|
39
|
|
|
|
SECTION 4.06.
|
Interest Rates
|
40
|
|
|
|
SECTION 4.07.
|
Conversion Options
|
40
|
|
|
|
SECTION 4.08.
|
Post-Maturity Interest Rates; Default Interest Rates
|
41
|
|
|
|
SECTION 4.09.
|
Interest Rate Determination
|
41
|
|
|
|
SECTION 4.10.
|
Computations of Interest and Fees
|
41
|
|
|
|
SECTION 4.11.
|
Time and Place of Payments
|
41
|
|
|
|
SECTION 4.12.
|
Borrowings and Payments Generally
|
42
|
|
|
|
SECTION 4.13.
|
Fees
|
42
|
|
|
|
SECTION 4.14.
|
Pro Rata Treatment
|
43
|
|
|
|
SECTION 4.15.
|
Sharing of Payments
|
43
|
|
ARTICLE V LIBOR AND TAX PROVISIONS
|
44
|
|||
|
|
|
|
|
|
SECTION 5.01.
|
LIBOR Lending Unlawful
|
44
|
|
|
SECTION 5.02.
|
Inability to Determine LIBOR
|
45
|
|
|
SECTION 5.03.
|
Increased Costs
|
45
|
|
|
SECTION 5.04.
|
Obligation to Mitigate
|
47
|
|
|
SECTION 5.05.
|
Funding Losses
|
48
|
|
|
SECTION 5.06.
|
Taxes
|
49
|
|
|
|
|
|
|
ARTICLE VI REPRESENTATIONS AND WARRANTIES
|
53
|
|||
|
|
|
|
|
|
SECTION 6.01.
|
Incorporation of Common Terms Agreement
|
53
|
|
|
|
|
|
|
ARTICLE VII CONDITIONS PRECEDENT
|
53
|
|||
|
|
|
|
|
|
SECTION 7.01.
|
Conditions to Closing Date
|
53
|
|
|
SECTION 7.02.
|
Conditions Precedent to Certain Extensions of Credit
|
56
|
|
|
|
|
|
|
ARTICLE VIII COVENANTS OF THE BORROWER
|
58
|
|||
|
|
|
|
|
|
SECTION 8.01.
|
Covenants Applicable Prior to Other Obligations Discharge Date
|
58
|
|
|
SECTION 8.02.
|
Covenants Applicable After the Other Obligations Discharge Date
|
58
|
|
|
SECTION 8.03.
|
Restricted Payments
|
58
|
|
|
SECTION 8.04.
|
Reporting Covenants
|
62
|
|
|
|
|
|
|
ARTICLE IX DEFAULTS
|
62
|
|||
|
|
|
|
|
|
SECTION 9.01.
|
Events of Default
|
62
|
|
|
SECTION 9.02.
|
Acceleration Upon Bankruptcy
|
67
|
|
|
SECTION 9.03.
|
Acceleration Upon Other Event of Default
|
68
|
|
|
SECTION 9.04.
|
Action Upon Event of Default
|
68
|
|
|
SECTION 9.05.
|
Cash Collateralization of Letters of Credit
|
69
|
|
|
SECTION 9.06.
|
Application of Proceeds
|
69
|
|
|
|
|
|
|
ARTICLE X THE SENIOR FACILITY AGENT
|
70
|
|||
|
|
|
|
|
|
SECTION 10.01.
|
Appointment and Authority
|
70
|
|
|
SECTION 10.02.
|
Rights as a Lender or Secured Hedging Party
|
70
|
|
|
SECTION 10.03.
|
Exculpatory Provisions
|
71
|
|
|
SECTION 10.04.
|
Reliance by Senior Facility Agent
|
72
|
|
|
SECTION 10.05.
|
Delegation of Duties
|
72
|
|
|
SECTION 10.06.
|
Resignation or Removal of Senior Facility Agent
|
72
|
|
|
SECTION 10.07.
|
No Amendment to Duties of Senior Facility Agent Without Consent
|
73
|
|
|
SECTION 10.08.
|
Non-Reliance on Senior Facility Agent
|
73
|
|
SECTION 10.09.
|
No Joint Lead Arranger, No Joint Lead Bookrunner, No Co‑Documentation Agent, No Co-Syndication Agent Duties
|
74
|
|
|
SECTION 10.10.
|
Certain Obligations
|
74
|
|
|
|
|
|
|
ARTICLE XI MISCELLANEOUS PROVISIONS
|
75
|
|||
|
|
|
|
|
|
SECTION 11.01.
|
Amendments, Etc.
|
75
|
|
|
SECTION 11.02.
|
Entire Agreement
|
77
|
|
|
SECTION 11.03.
|
Applicable Government Rule; Jurisdiction; Etc.
|
77
|
|
|
SECTION 11.04.
|
Assignments
|
78
|
|
|
SECTION 11.05.
|
Benefits of Agreement
|
82
|
|
|
SECTION 11.06.
|
Costs and Expenses
|
82
|
|
|
SECTION 11.07.
|
Counterparts; Effectiveness
|
83
|
|
|
SECTION 11.08.
|
Indemnification by the Borrower
|
83
|
|
|
SECTION 11.09.
|
Interest Rate Limitation
|
85
|
|
|
SECTION 11.10.
|
No Waiver; Cumulative Remedies
|
85
|
|
|
SECTION 11.11.
|
Notices and Other Communications
|
85
|
|
|
SECTION 11.12.
|
Patriot Act Notice
|
88
|
|
|
SECTION 11.13.
|
Payments Set Aside
|
88
|
|
|
SECTION 11.14.
|
Right of Setoff
|
88
|
|
|
SECTION 11.15.
|
Severability
|
89
|
|
|
SECTION 11.16.
|
Survival
|
89
|
|
|
SECTION 11.17.
|
Treatment of Certain Information; Confidentiality
|
89
|
|
|
SECTION 11.18.
|
Waiver of Consequential Damages, Etc.
|
91
|
|
|
SECTION 11.19.
|
Waiver of Litigation Payments
|
91
|
|
|
SECTION 11.20.
|
Reinstatement
|
91
|
|
|
SECTION 11.21.
|
No Recourse
|
91
|
|
|
SECTION 11.22.
|
Intercreditor Agreement
|
92
|
|
|
SECTION 11.23.
|
Amendment and Restatement
|
92
|
|
|
SECTION 11.24.
|
Termination
|
92
|
|
|
SECTION 11.25.
|
No Fiduciary Duty
|
92
|
Exhibits
|
|
|
|
|
|
|
|
|
|
Exhibit A1
|
-
|
Form of Borrowing Notice (Working Capital Loans)
|
||
Exhibit A2
|
-
|
Form of Borrowing Notice (Swing Line Loans)
|
||
Exhibit B
|
-
|
Form of Interest Period Notice
|
||
Exhibit C
|
-
|
Form of Accession Agreement
|
||
Exhibit D1
|
-
|
Form of Transco Irrevocable Standby Letter of Credit
|
||
Exhibit D2
|
-
|
Form of Texas Gas Irrevocable Standby Letter of Credit
|
||
Exhibit D3
|
-
|
Form of NGPL Irrevocable Standby Letter of Credit
|
||
Exhibit E
|
-
|
Form of Lender Assignment (Commitment, Participations and Loans)
|
||
Exhibit F-1
|
-
|
Form of U.S. Tax Compliance Certificate (For Non-U.S. Lenders that are Not Partnerships for U.S. Federal Income Tax Purposes)
|
||
Exhibit F-2
|
-
|
Form of U.S. Tax Compliance Certificate (For Non-U.S. Participants that are Not Partnerships for U.S. Federal Income Tax Purposes)
|
||
Exhibit F-3
|
-
|
Form of U.S. Tax Compliance Certificate (For Non-U.S. Participants that are Partnerships for U.S. Federal Income Tax Purposes)
|
||
Exhibit F-4
|
-
|
Form of U.S. Tax Compliance Certificate (For Non-U.S. Lenders that are Partnerships for U.S. Federal Income Tax Purposes)
|
||
Exhibit G
|
-
|
Form of Solvency Certificate
|
||
|
|
|
|
|
Schedules
|
|
|
|
|
|
|
|
|
|
Schedule 1.01
|
-
|
Existing Letters of Credit
|
||
Schedule 2.01
|
-
|
Commitments and Proportionate Share
|
||
Schedule 8.01
|
-
|
Covenants
|
||
Schedule 11.11
|
-
|
Notice Information
|
(A)
|
each Senior Lender that is a United States Person shall deliver to the Senior Facility Agent for transmission to the Borrower, on or prior to the date on which such Senior Lender becomes a Senior Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Senior Facility Agent), executed copies of IRS Form W-9 certifying that such Senior Lender is exempt from U.S. federal backup withholding tax;
|
(B)
|
each Senior Lender that is not a United States Person (a “Non‑U.S. Lender”) shall, to the extent it is legally entitled to do so, deliver to the Senior Facility Agent for transmission to the Borrower (but in the case of a Participant, only to the extent transmission to the Borrower is required under Section 11.04(d) (Assignments)), on or prior to the Closing Date (in the case of each Senior Lender listed on the signature pages hereof on the Closing Date) or on or prior to the date of the assignment and acceptance pursuant to which it becomes a Senior Lender (in the case of each other Senior Lender) and from time to time thereafter upon the reasonable request of the Borrower or the Senior Facility Agent, whichever of the following is applicable: (i)
|
(C)
|
Each Senior Lender required to deliver any forms, certificates or other evidence with respect to United States federal income tax withholding matters pursuant to this Section 5.06(e) hereby agrees, from time to time after the initial delivery by such Senior Lender of such forms, certificates or other evidence, whenever a lapse in time or change in circumstances renders such forms, certificates or other evidence obsolete or inaccurate in any material respect, that such Senior Lender shall, upon reasonable request by the Borrower or the Senior Facility Agent, (i) promptly deliver to the Senior Facility Agent for transmission to the Borrower (but in the case of a Participant, only to the extent transmission to the Borrower is required under Section 11.04(d) (Assignments)) new copies of the applicable forms, certificates or other evidence, properly completed and duly executed by such Senior Lender, and such other documentation required under the Code and reasonably requested in writing by the Borrower or the Senior Facility Agent to confirm or establish that such Senior Lender
|
(A)
|
only with respect to making the first Sponsor Case Restricted Payment, the conditions set forth in Schedule 5.01(c)(iv) to the Accounts Agreement have been satisfied (except that if any condition to be satisfied after the Other Obligations Discharge Date requires the delivery of a certificate or other document to the Facility Agents, such condition will be deemed satisfied by the delivery of such certificate or other document to the Senior Facility Agent);
|
(B)
|
No Default or Event of Default has occurred and is continuing or would occur as a result of making such Sponsor Case Restricted Payment; and
|
(C)
|
the Senior Facility Agent has received a Sponsor Case Restricted Payment Certificate, duly executed by an Authorized Signatory of the Borrower, confirming that each of the conditions set forth in clauses (B) and (C) of this Section 8.03(a) (Restricted Payments) have been satisfied;
|
(A)
|
The conditions set forth in Section 5.01(c)(v)(A)-(C) and (E)-(H) of the Accounts Agreement have been satisfied (except that if any condition to be satisfied after the Other Obligations Discharge Date requires the delivery of a certificate or other document to the Facility Agents, such condition will be deemed satisfied by the delivery of such certificate or other document to the Senior Facility Agent); and
|
(B)
|
the Senior Facility Agent has received an Additional Equity Distribution Certificate, duly executed by an Authorized Signatory of the Borrower, confirming that each of the conditions set forth in clause (A) of this Section 8.03(b) (Restricted Payments) have been satisfied; and
|
(A)
|
Train 2 has achieved Substantial Completion (as defined in the Stage 1 EPC Contract);
|
(B)
|
No Default or Event of Default has occurred and is continuing or would occur as a result of making such Base Case Restricted Payment;
|
(C)
|
there shall be on deposit with the Accounts Bank the following amounts to be held as cash reserves (distinct from any other reserve requirements under the Accounts Agreement or any Senior Debt Instruments): (1) in respect of any Base Case Restricted Payment made on or after Substantial Completion of Train 2 and prior to the date that is three months thereafter, at least $50,000,000; (2) in respect of any Base Case Restricted Payment made on or after the date that is three months following Substantial Completion of Train 2 and prior to six months following Substantial Completion of Train 3, at least $75,000,000; (3) in respect of any Base Case Restricted Payment made on or after the date that is six months following Substantial Completion of Train 3 and prior to Substantial Completion of Train 4, at least $100,000,000; and (4) in respect of any Base Case Restricted Payment made on or after Substantial Completion of Train 4, at least $50,000,000;
|
(D)
|
(D) the Borrower shall have (i) at least $200,000,000 of unrestricted cash held in the Operating Account or at least $200,000,000 of unused Commitments under this Agreement available to be borrowed and used for General Working Capital Purposes or (ii) a combination of unrestricted cash and such unused Commitments aggregating at least $200,000,000;
|
(E)
|
the Borrower’s Debt to Equity Ratio shall not exceed the ratio of 75:25 taking into account the payment of such Restricted Payment) but without regard to any outstanding Indebtedness comprising Working Capital Debt;
|
(F)
|
each Debt Service Reserve Account and Additional Debt Service Reserve Account is funded to its then required funding level;
|
(G)
|
the Borrower delivers to the Common Security Trustee and the Senior Facility Agent a certificate (setting out its calculations therein) confirming that for the twelve (12) month period commencing on the projected Initial Quarterly Payment Date, the Projected Debt Service Coverage Ratio is at least 1.50x, calculated with respect to all Cash Flows other than Cash Flows comprising the pass-through component of the cost of purchase and transportation of natural gas consumed for LNG production to the extent not already deduced as an operating expense (as contemplated by the definition of Cash Flow Available for Debt Services); provided that, for purposes of this clause (G), the Projected Debt Service Coverage Ratio shall be determined by taking into account Cash Flows which shall be based on FOB Sale and Purchase Agreements; provided further, that such calculation shall be reasonable acceptable to the Common Security Trustee; and
|
(H)
|
the Borrower delivers to the Common Security Trustee and the Senior Facility Agent a certificate from an Authorized Signatory of the Borrower (with the concurrence of the Independent Engineer, such concurrence not to be unreasonably withheld, conditioned or delayed) certifying as to the existence of sufficient funds necessary to cause (i) the Date of First Commercial Delivery under and as defined in the KoGas FOB Sale and Purchase Agreement to occur on or before the KoGas DFCD Deadline, (ii) the Date of First Commercial Delivery under and as defined in the GAIL FOB Sale and Purchase Agreement to occur on or before the GAIL DFCD Deadline, (iii) the Date of First Commercial Delivery under and as defined in the Centrica FOB Sale and Purchase Agreement to occur on or before the Centrica DFCD Deadline and (iv) the Date of First Commercial Delivery under and as defined in the Total FOB Sale and Purchase Agreement to occur on or before the Total DFCD Deadline; and
|
(A)
|
no Default or Event of Default has occurred and is continuing or would occur as a result of such Restricted Payment;
|
(B)
|
the Borrower delivers to the Common Security Trustee and the Senior Facility Agent a certificate (setting out its calculations therein) confirming (1) that the Debt Service Coverage Ratio for the last measurement period is at least 1.25x and (2) the Projected Debt Service Coverage Ratio for the next twelve (12) month‑period is at least 1.25x, calculated in the case of clause (2) with respect to all Cash Flows other than Cash Flows comprising the pass-through component of the cost of purchase and transportation of natural gas consumed for LNG production to the extent not already deducted as an operating expense (as contemplated by the definition of Cash Flow
|
(C)
|
the Debt Service Reserve Accounts, if any are then required, are funded (with cash or letters of credit as set forth herein) in an amount equal to the Required Debt Service Reserve Amount and the “debt service reserve requirements” established pursuant to any Senior Debt Instrument governing Secured Replacement Debt, as applicable;
|
(D)
|
the Project Completion Date has occurred;
|
(E)
|
the Restricted Payment is made on a date that is no later than twenty-five (25) Business Days following the last day of the most recent Fiscal Quarter;
|
(F)
|
the first installment of the principal payments on the Facility Loans has been made;
|
(G)
|
the date of withdrawal and transfer of the Restricted Payment is prior to the last Quarterly Payment Date prior to the Maturity Date; and
|
(H)
|
the Common Security Trustee has received a Restricted Payment Certificate, duly executed by an Authorized Signatory of the Borrower, confirming that each of the conditions set forth in clauses (A) through (G) of this Section 8.03(b)(iv) (Restricted Payments) has been satisfied.
|
(A)
|
the Borrower notifies the Senior Facility Agent that it intends to enter into a replacement Material Project Document in lieu of the Material Project Document to which any of the affected Persons is party,
|
(B)
|
the Borrower diligently pursues such replacement,
|
(C)
|
the applicable Material Project Document is replaced not later than 180 days following the expiration of such 180 consecutive day period (except the EPC Contracts shall be replaced within 360 days),
|
(D)
|
(I) in the case of any FOB Sale and Purchase Agreement, such replacement Material Project Document is on terms and conditions,
|
(E)
|
in the case of any FOB Sale and Purchase Agreement, the counterparty to any such replacement Material Project Document (x) has an Investment Grade Rating from at least two Acceptable Rating Agencies, or provides a guaranty from an Affiliate that has at least two of such ratings or (y) has a direct or indirect parent with an Investment Grade Rating from at least one Acceptable Rating Agency and either the counterparty or an Affiliate of such counterparty who is providing a guaranty has a tangible net worth in excess of fifteen billion Dollars ($15,000,000,000);
|
1.
|
AFFIRMATIVE COVENANTS
|
1.1.
|
Separateness
|
1.2.
|
Project Documents, Etc.
|
(a)
|
The Borrower shall comply with all of its covenants and obligations under the Material Project Documents and Government Approvals, except where the failure to so comply could not reasonably be expected to have a Material Adverse Effect.
|
(b)
|
The Borrower shall notify the Common Security Trustee and the Senior Facility Agent (i) when entering into or terminating any Material Project Documents and provide a copy of any such contract to the Common Security Trustee and the Senior Facility Agent and (ii) promptly upon obtaining knowledge thereof, of any material adverse change in the status of any Fundamental Government Approval.
|
(c)
|
The Borrower shall not agree to any material amendment or termination of any Material Project Document to which it is or becomes a party unless (i) a copy of such amendment or termination has been delivered to the Senior Facility Agent at least five (5) days in advance of the effective date thereof along with a certificate of an Authorized Officer of the Borrower certifying that the proposed amendment or termination would not reasonably be expected to have a Material Adverse Effect or (ii) the Borrower has obtained the consent of the Required Senior Lenders to such amendment or termination.
|
1.3.
|
Maintenance of Existence, Etc.
|
1.4.
|
Books and Records; Inspection Rights
|
1.5.
|
Compliance with Government Rules, Etc.
|
(a)
|
The Borrower shall (i) comply with all applicable Government Rules, except where such failure to comply would not reasonably be expected to have a Material Adverse Effect and (ii) notify the Senior Facility Agent promptly following the initiation of any proceedings or material disputes with any Government Authority or other parties, which would reasonably be expected to have a Material Adverse Effect, relating to compliance or noncompliance with any such Government Rule.
|
(b)
|
The Borrower and its Affiliates shall comply in all respects with Anti-Terrorism and Money Laundering Laws and OFAC Laws.
|
(c)
|
The Borrower will not, and will procure that its Affiliates, directors and officers do not, directly or, to the Borrower’s Knowledge, indirectly, use the proceeds of the Loans, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other Person:
|
(i)
|
in furtherance of an offer, payment, promise to pay or authorization of the payment or giving of money or anything else of value, to any Person in violation of any Anti-Terrorism and Money Laundering Laws, Anti‑Corruption Laws or OFAC Laws, to the extent applicable;
|
(ii)
|
to fund any activities or business of or with any Person, or in any country or territory, that, at the time of such funding, is, or whose government is, the target of sanctions under OFAC or by the US Department of State, the European Union or Her Majesty’s Treasury, to the extent applicable; or
|
(iii)
|
in any other manner that would result in a violation of any Anti-Terrorism and Money Laundering Laws, Anti-Corruption Laws or sanctions under OFAC or by the US Department of State, the European Union or Her Majesty’s Treasury, to the extent applicable, by any Person (including any Person participating in the Facility Loans, whether as Senior Lender, Common Security Trustee or otherwise).
|
(d)
|
The Borrower shall at all times obtain and maintain and use commercially reasonable efforts to cause third parties, as allowed pursuant to Government Rule, to obtain or maintain in full force and effect all material permits, licenses, trademarks, patents, agreements or Government Approvals necessary for the Development.
|
(e)
|
The Borrower agrees that if it obtains Knowledge or receives any written notice that the Borrower, any Affiliate or any Person holding any legal or beneficial interest whatsoever therein (whether directly or indirectly) is named on the OFAC SDN List or is otherwise subject to OFAC, US Department of State, European Union or Her Majesty’s Treasury sanctions (such occurrence, a “Sanctions Violation”), the Borrower shall immediately (i) give written notice to the Common Security Trustee and the Senior Facility Agent of such Sanctions Violation, and (ii) comply with all applicable laws with respect to such Sanction Violation (regardless of whether the party included on the OFAC SDN List is located within the jurisdiction of the United States of America), and the Borrower hereby authorizes and consents to the Common Security Trustee and the Senior Facility Agent (as the case may be) taking any and all steps the Common Security Trustee and the Senior Facility Agent (as the case may be) deem necessary, in its sole discretion, to comply with all applicable laws governing such sanctions with respect to any such Sanction Violation, including the “freezing” or “blocking” of assets and reporting such action to OFAC.
|
1.6.
|
Insurance; Events of Loss.
|
(a)
|
Insurance Maintained by the Borrower, the EPC Contractor and the Operator. The Borrower shall (i) procure at its own expense and maintain in full force and effect and (ii) cause the EPC Contractor, the Operator and each other Material Project Party, as applicable, to procure at such Person’s own expense and maintain in full force and effect, the insurance set forth on, and subject to the provisions of, Schedule 6.6 of the Common Terms Agreement and any insurance required to be maintained by such Person pursuant to its applicable Project Document. Upon request, the Borrower shall provide to the Senior Facility Agent (with a copy to the Insurance Advisor) evidence of the maintenance of such insurance. Prior to the expiration of any such insurance policy, the Borrower shall have delivered to the Senior Facility Agent binders evidencing the commitment of insurers to provide a replacement or renewal for such insurance policy together with evidence of the payment of all premiums then payable in respect of such insurance policies. Without limiting the obligations under Section 1.6(b) of this Schedule 8.01, upon the issuance, renewal or replacement of any insurance policy, and in any event not less than once per annum, the Borrower shall deliver to the Senior Facility Agent a certificate of an Authorized Officer of the Borrower, certifying that all such insurance policies are in full force and effect and in compliance with the requirements of this Section and Schedule 6.6 of the Common Terms Agreement confirmed by the Insurance Consultant.
|
(b)
|
Insurance Certificates. Within ten (10) Business Days following the date that Notice to Proceed has been issued under the Stage 3 EPC Contract and the Stage 4 EPC Contract, the Borrower shall deliver certificates of insurance evidencing the existence of all insurance then required to be maintained by the Borrower as set forth on Schedule 6.6 of the Common Terms Agreement and any insurance required to be maintained by such Person pursuant to its applicable Project Document and a certificate of an Authorized Officer of the Borrower setting forth the insurance obtained and stating that such insurance and, to his or her knowledge, all insurance required to be obtained by a Material Project Party pursuant to a Material Project
|
(c)
|
Certain Remedies. In the event the Borrower fails to obtain or maintain, or cause to be obtained and maintained, the full insurance coverage required by this Section 1.6, the Common Security Trustee may (but shall not be obligated to) take out the required policies of insurance and pay the premiums on the same. All amounts so advanced by the Common Security Trustee shall become an Obligation and the Borrower shall forthwith pay such amounts to the Common Security Trustee, together with interest from the date of payment by the Common Security Trustee at the Default Rate.
|
(d)
|
DSU Insurance. The Borrower shall, at the request of the Common Security Trustee in consultation with the Independent Engineer, exercise its option to file a claim under the Delayed Startup Insurance under any EPC Contract (as described on Exhibit A to each Umbrella Insurance Agreement) in accordance with Section 9.3(A) (DSU Insurance) of the applicable the EPC Contract.
|
(e)
|
Flood Insurance. With respect to all Mortgaged Property located in a Special Flood Hazard Area, the Borrower will obtain and maintain at all times flood insurance for all Collateral located on such property as may be required under the Flood Program and will provide to each Senior Lender evidence of compliance with such requirements as may be reasonably requested by such Senior Lender. The timing and process for delivery of such evidence will be as set forth on Schedule 6.6 of the Common Terms Agreement.
|
1.7.
|
Project Construction; Maintenance of Properties.
|
(a)
|
The Borrower shall construct and complete, operate and maintain the Project, and cause the Project to be constructed, operated and maintained, as applicable, (A) consistent with Prudent Industry Practices and consistent in all material respects with applicable Government Rules, the EPC Contracts, the Construction Budget and Construction Schedule, the Operating Manual, the other Project Documents, and in accordance with the requirements for maintaining the effectiveness of the material warranties of the EPC Contractor and each subcontractor thereof (including equipment manufacturers), and (B) within, subject to the following proviso, the then effective Operating Budget; provided, that the Borrower may (x) exceed in the aggregate for all Operating Budget Categories in any Operating Budget by fifteen percent (15%) or less of the aggregate budgeted amount therefor on an annual basis, but excluding, for purposes of calculating the foregoing allowable increases, amounts in the then effective Operating Budget for Gas purchases, and (y) notwithstanding the foregoing, further exceed the Operating Budget and any Operating Budget Category thereof (I) with respect to payments under Gas purchase contracts for the Project, (II) as required by Government Rule or for compliance with any Government Approval applicable to the Borrower or the Development (or to cure or remove the effect of any termination, suspension, or Impairment of any Government Approval),
|
(i)
|
if the Borrower reasonably determines that there is a sufficient time to do so prior to responding to any such emergency or accident, the Borrower shall substantiate the expenses expected to be incurred by the Borrower in connection with such emergency or accident to the reasonable satisfaction of the Common Security Trustee and the Senior Facility Agent; or
|
(ii)
|
if the Borrower reasonably determines that there is not sufficient time to take the actions described in clause (i) above prior to responding to any such emergency or accident, promptly following such emergency or accident, the Borrower shall describe in writing to the Common Security Trustee and the Senior Facility Agent the steps that were taken by the Borrower in respect of such emergency or accident and the expenses incurred by the Borrower in connection therewith, all in reasonable detail.
|
(b)
|
The Borrower shall take such action as contemplated under Section 6.2(A)(12) (Change Orders Requested by Contractor) of each EPC Contract to avoid any delay with respect to the Guaranteed Substantial Completion Dates for any train of the Project or a delay that would result in the date specified for Ready for Start Up in Attachment E to such EPC Contract for such train of the Project to occur less than four (4) months prior to the Guaranteed Substantial Completion Date for such train.
|
(c)
|
In the event that any train of the Project fails to achieve the Performance Guarantee by the applicable Guaranteed Substantial Completion Date (each as defined in the applicable EPC Contract), the Borrower shall not, without the consent of the Required Secured Parties (in consultation with the Independent Engineer), elect the option available to it under Section 11.4(A) (Minimum Acceptance Criteria and Performance Liquidated Damages) of such EPC Contract.
|
(d)
|
In the event that any train of the Project fails to achieve the Minimum Acceptance Criteria (as defined in the applicable EPC Contract) and Substantial Completion upon the termination of the Minimum Acceptance Criteria Correction Period (as defined in the applicable EPC Contract), the Borrower shall not, without the consent of the Required Secured Parties (in consultation with the Independent Engineer) elect the option available to it under Section 11.4(B) (Minimum Acceptance Criteria and Performance Liquidated Damages) of such EPC Contract.
|
(e)
|
Unless the applicable Defect Correction Period (and any extension thereof) with respect to each Subproject (as such terms are defined in the applicable EPC Contract) has expired and the EPC Contractor has completed and paid any warranty claims submitted by the Borrower with respect to such Subproject, the Borrower shall draw
|
1.8.
|
Taxes
|
1.9.
|
Maintenance of Liens
|
(a)
|
The Borrower shall grant a security interest to the Common Security Trustee for the benefit of the Secured Parties in the Borrower’s interest in all Project assets and Project Documents acquired or entered into, as applicable, from time to time (except to the extent expressly permitted to be excluded from the Liens created by the Security Documents pursuant to the terms thereof) and shall take, or cause to be taken, all action reasonably required to maintain and preserve the Liens created by the Security Documents to which it is a party and the priority of such Liens.
|
(b)
|
The Borrower shall from time to time execute or cause to be executed any and all further instruments (including financing statements, continuation statements and similar statements with respect to any Security Document) reasonably requested by the Common Security Trustee for such purposes.
|
(c)
|
The Borrower shall preserve and maintain good, legal and valid title to, or rights in, the Collateral free and clear of Liens other than Permitted Liens.
|
(d)
|
The Borrower shall promptly discharge at the Borrower’s cost and expense, any Lien (other than Permitted Liens) on the Collateral.
|
1.10.
|
Use of Proceeds
|
1.11.
|
[Reserved]
|
1.12.
|
Operating Budget
|
(a)
|
No less than forty-five (45) days prior to the Substantial Completion of each train of the Project, and no less than forty-five (45) days prior to the beginning of each calendar year thereafter, the Borrower shall prepare a proposed operating plan and
|
(b)
|
Each Operating Budget delivered pursuant to this Section 1.12 shall contain Operating Budget Categories, and shall specify for each Fiscal Quarter and for each such Operating Budget Category the amount budgeted for such category for such Fiscal Quarter.
|
(c)
|
Each Operating Budget may only be amended with the prior written consent of the Senior Facility Agent, which consent shall not be unreasonably withheld, conditioned, or delayed.
|
1.13.
|
Other Documents and Information
|
(a)
|
promptly after the filing thereof, a copy of each filing made by (i) the Borrower with FERC with respect to the Project; or (ii) the Borrower with DOE/FE with respect to the export of LNG from, or the import of LNG to, the Project; except in the case of (i) or (ii) such as are routine or ministerial in nature;
|
(b)
|
promptly after obtaining Knowledge thereof, a copy of each filing with respect to (i) the Project or the Pipeline made with FERC by any Person other than the Borrower in any proceeding before FERC in which the Borrower is the captioned party or respondent, except for such filings as are routine or ministerial in nature, or (ii) the import of LNG to, or the export of LNG from, the Project made with DOE/FE by
|
(c)
|
promptly after the filing thereof, a copy of each filing, certification, waiver, exemption, claim, declaration, or registration made with respect to Government Approvals to be obtained or filed by the Borrower with any Government Authority, except such filings, certifications, waivers, exemptions, claims, declarations, or registrations that are routine or ministerial in nature and in respect of which a failure to file could not reasonably be expected to have a Material Adverse Effect;
|
(d)
|
promptly after receipt or publication thereof, a copy of each material Government Approval obtained by the Borrower; and
|
(e)
|
promptly upon obtaining Knowledge thereof, a description of each change in the status of any Government Approval identified on Schedule 4.6(a) of the Common Terms Agreement and Schedule 4.6(b) of the Common Terms Agreement other than routine or ministerial changes.
|
1.14.
|
[Reserved].
|
1.15.
|
Debt Service Coverage Ratio
|
(a)
|
The Borrower shall not permit the Debt Service Coverage Ratio as of the end of any Fiscal Quarter from and following the Initial Quarterly Payment Date to be less than 1.15 to 1.00. Not later than ten (10) Business Days following the last day of each Fiscal Quarter following the Initial Quarterly Payment Date, the Borrower shall calculate and deliver to the Common Security Trustee its calculation of the Debt Service Coverage Ratio. The Common Security Trustee shall notify the Borrower in writing of any reasonable corrections which should be made to such Debt Service Coverage Ratio calculations, within ten (10) Business Days of receipt. Borrower shall incorporate all such reasonable corrections, changes or adjustments consistent with the terms of this Agreement.
|
(b)
|
Notwithstanding anything in Section 1.15(a) of this Schedule 8.01 to the contrary, in the event that the Debt Service Coverage Ratio as of the end of any Fiscal Quarter is less than 1.15 to 1.00 but greater than 1.00 to 1.00, any direct or indirect owner of the Borrower shall have the right to provide cash to the Borrower, not later than ten (10) Business Days following the date of delivery of the calculation of the Debt Service Coverage Ratio as required pursuant to Section 1.15(a) of this Schedule 8.01 in the form of equity contributions or subordinated shareholder loans (in each case as otherwise permitted pursuant to the terms of the Financing Documents), in order to increase the Debt Service Coverage Ratio to 1.15 to 1.00; provided, that such right shall not be exercised more than two (2) consecutive Fiscal Quarters nor more than four (4) times over the term of this Agreement.
|
1.16.
|
Further Assurances; Cooperation
|
(a)
|
The Borrower shall promptly perform or cause to be performed any and all acts and execute or cause to be executed any and all documents (including UCC financing statements and UCC continuation statements):
|
(i)
|
as are reasonably requested by the Common Security Trustee for filing under the provisions of the UCC or any other Government Rule that are necessary or reasonably advisable to maintain in favor of the Common Security Trustee, for the benefit of the Secured Parties, Liens on the Collateral that are duly perfected in accordance with all applicable Government Rules for the purposes of perfecting the first priority Lien (subject to Permitted Liens) created, or purported to be created, in favor of the Common Security Trustee or the Secured Parties under this Agreement or any other Financing Documents;
|
(ii)
|
as are reasonably requested by the Common Security Trustee for the purposes of ensuring the validity, enforceability and legality of this Agreement or any other Financing Document and the rights of the Secured Parties hereunder or thereunder;
|
(iii)
|
as are reasonably requested by the Common Security Trustee for the purposes of enabling or facilitating the proper exercise of the rights and powers granted to the Secured Parties under this Agreement or any other Financing Document; or
|
(iv)
|
as are reasonably requested by the Common Security Trustee to carry out the intent of, and transactions contemplated by, this Agreement and the other Financing Documents.
|
(b)
|
The Borrower will cooperate with and provide all necessary information available to it on a timely basis to the Consultants so that the Consultants may complete and deliver the reports as required herein.
|
1.17.
|
Auditors
|
1.18.
|
Surveys and Title Policies
|
(a)
|
Survey. The Borrower shall, no later than sixty (60) days following Final Completion, deliver to the Common Security Trustee the “as built” Survey.
|
(b)
|
Title Policy. The Borrower shall cause the Title Company to deliver to the Common Security Trustee a Disbursement Endorsement dated no later than sixty (60) days following Substantial Completion of each train of the Project.
|
1.19.
|
[Reserved]
|
1.20.
|
Debt Service Reserve Amount
|
2.
|
NEGATIVE COVENANTS
|
2.1.
|
[Reserved]
|
2.2.
|
Prohibition of Fundamental Changes
|
(a)
|
The Borrower shall not change its legal form, amend its Amended and Restated Limited Liability Company Agreement (except any amendments in connection with permitted sales or transfers of ownership interests in the Borrower or other immaterial amendments, provided, that the Borrower shall have delivered to the Common Security Trustee a copy of such amendment together with a certificate of an Authorized Officer of the Borrower certifying that no changes have been made to the Amended and Restated Limited Liability Company Agreement other than such changes as are necessary solely to reflect the change in ownership or that any other change is immaterial) or any other Organic Document, merge into or consolidate with, or acquire (in one transaction or series of related transactions) all or any business, any class of stock of (or other equity interest in) or any material part of the assets or property of any other Person and shall not liquidate, wind up, reorganize, terminate or dissolve.
|
(b)
|
The Borrower will not consummate an Asset Sale unless:
|
(i)
|
the Borrower receives consideration at the time of the Asset Sale equal to the greater of (A) the Fair Market Value of the assets or Equity Interests issued or sold or otherwise disposed of and (B) an amount equal to the invested cost of the assets sold or otherwise disposed of, less depreciation; and
|
(ii)
|
at least 90% of the consideration therefor received by the Borrower is in the form of cash, Cash Equivalents or Replacement Assets or a combination thereof. For purposes of this provision, each of the following will be deemed to be cash:
|
(A)
|
any liabilities, as shown on the Borrower’s most recent consolidated balance sheet (or as would be shown on the Borrower’s consolidated balance sheet as of the date of such Asset Sale) of the Borrower (other
|
(B)
|
any securities, notes or other obligations received by the Borrower from such transferee that are converted by the Borrower into cash or Cash Equivalents within 90 days after such Asset Sale, to the extent of the cash or Cash Equivalents received in that conversion.
|
(c)
|
Within 360 days after the receipt of any Net Cash Proceeds from an Asset Sale, the Borrower may apply an amount equal to such Net Cash Proceeds:
|
(i)
|
to repay Senior Debt in accordance with the Common Terms Agreement; or
|
(ii)
|
to make any capital expenditure or to purchase Replacement Assets (or enter into a binding agreement to make such capital expenditure or to purchase such Replacement Assets; provided that (A) such capital expenditure or purchase is consummated within the later of (i) three hundred sixty (360) days after the receipt of the Net Cash Proceeds from the related Asset Sale and (ii) one hundred eighty (180) days after the date of such binding agreement and (B) if such capital expenditure or purchase is not consummated within the period set forth in subclause (A), the amount not so applied will be applied in accordance with clause (i) above.
|
(d)
|
The Borrower shall not permit the Project or any material portion thereof to be removed, demolished or materially altered, unless (A) such material portion that has been removed, demolished or materially altered has been replaced or repaired as permitted under the Financing Documents, or (B) such removal or alteration is (x) in accordance with Prudent Industry Practices (as certified by the Independent Engineer, acting reasonably) and could not reasonably be expected to result in a Material Adverse Effect or (y) required by applicable Government Rule.
|
(e)
|
The Borrower shall comply at all times with Section 5.01 of the Initial Senior Bonds Indenture as in effect on the date hereof (with all terms referenced in such term also as in effect on the date hereof).
|
(f)
|
The Borrower will not consummate any Asset Sales in excess of five hundred million Dollars ($500,000,000) in the aggregate without the prior written consent of the Required Senior Lenders.
|
2.3.
|
Nature of Business
|
(a)
|
The Borrower shall not engage in any business or activities other than the Permitted Businesses, except to such extent as would not be material to the Borrower.
|
(b)
|
The Borrower shall not permit to exist any Subsidiary of the Borrower.
|
(c)
|
The Borrower shall not sponsor, maintain, administer, or have any obligation to contribute to, or any liability under, any Plan or Multiemployer Plan or plan that provides for post-retirement welfare benefits.
|
2.4.
|
Performance Tests and Liquidated Damages
|
(a)
|
permit any Performance Test to be performed without giving the Common Security Trustee, the Senior Facility Agent and the Independent Engineer at least five (5) Business Days prior written notice of such Performance Test (or such shorter period as agreed by the Independent Engineer); or
|
(b)
|
agree to the amount of any Performance Liquidated Damages and Delay Liquidated Damages that are in excess of fifteen million Dollars ($15,000,000) without the prior written approval of the Common Security Trustee, acting reasonably and in consultation with the Independent Engineer.
|
2.5.
|
Restrictions on Indebtedness
|
(a)
|
Indebtedness existing under the Initial Senior Bond Indentures in an amount not to exceed the amount of Indebtedness outstanding under the Initial Senior Bond Indentures as of the date of the Fifth Omnibus Amendment;
|
(b)
|
Permitted Refinancing Indebtedness of the Borrower in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted to be incurred under clause (a), (b) or (c) of this Section 2.5, provided that each of the following conditions shall have been satisfied:
|
(1)
|
the Senior Facility Agent shall have received a certificate from an Authorized Officer of the Borrower to the effect that the outstanding Senior Debt (other than Working Capital Debt and Indebtedness incurred pursuant to clauses (f), (g), (h), (i), (j), (k), (l), (m), and (o) of this Section 2.5) (after giving effect to the incurrence and application of proceeds of such Permitted Refinancing
|
(2)
|
no Default or Event of Default shall have occurred and be continuing or result from the incurrence of such Permitted Refinancing Indebtedness;
|
(3)
|
the maturity date of the Permitted Refinancing Indebtedness shall not occur prior to the Maturity Date;
|
(4)
|
the material terms of the Permitted Refinancing Indebtedness shall not be materially more restrictive on the Borrower than the terms of the Secured Debt being replaced;
|
(5)
|
prior to Final Completion, the Borrower’s Debt to Equity Ratio shall not exceed the ratio of 75:25 taking into account the incurrence of such Permitted Refinancing Indebtedness (other than Permitted Refinancing Indebtedness Incremental Amounts) but without regard to any outstanding Indebtedness comprising Working Capital Debt; and
|
(6)
|
the Senior Debt Holder Group Representative for the Permitted Refinancing Indebtedness shall have entered into an accession agreement to the Common Terms Agreement substantially in the form set forth in Exhibit C.
|
(c)
|
Secured Bank Debt; provided that if Indebtedness incurred pursuant to clause (b) of this Section 2.5 is incurred at a time when the Secured Bank Debt Available Amount is less than the Secured Bank Debt Committed Amount, any subsequent incurrence (which, for purposes of this clause (c), shall include the amount of any undrawn availability immediately after such incurrence) of Secured Bank Debt in an amount up to such difference shall be subject to the satisfaction of the Projected Debt Service Coverage Ratio conditions clause (b) of this Section 2.5 as if such Indebtedness was being incurred pursuant to such clause (b);
|
(d)
|
Indebtedness incurred under this Agreement;
|
(e)
|
purchase money Indebtedness or Capital Lease Obligations of the Borrower to the extent incurred in the ordinary course of business to finance the acquisition or licensing of intellectual property or items of equipment; provided, that (1) if such obligations are secured, they are secured only by Liens upon the equipment or intellectual property being financed and (2) the aggregate principal amount and the
|
(f)
|
other unsecured Indebtedness for borrowed money subordinated to the Obligations pursuant to an instrument in writing satisfactory in form and substance to the Required Secured Parties; provided, that (1) such instrument shall include that: (A) the maturity of such subordinated debt shall be no shorter than the maturity of the latest maturing tranche of Secured Debt; (B) such subordinated debt shall not be amortized; (C) no interest payments shall be made under such subordinated debt except from monies held in the Distribution Account and that are permitted to be distributed pursuant to the Accounts Agreement; and (D) such subordinated debt shall not impose covenants on the Borrower, and (2) the aggregate principal amount of such Indebtedness does not at any time exceed $500,000,000 in the aggregate;
|
(g)
|
trade or other similar Indebtedness of the Borrower incurred in the ordinary course of business, which is (1) not more than ninety (90) days past due, or (2) being contested in good faith and by appropriate proceedings;
|
(h)
|
contingent liabilities of the Borrower incurred in the ordinary course of business, including the acquisition or sale of goods, services, supplies or merchandise in the normal course of business, the endorsement of negotiable instruments received in the normal course of business and indemnities provided under any of the Transaction Documents;
|
(i)
|
any obligations of the Borrower under Permitted Hedging Agreements;
|
(j)
|
to the extent constituting Indebtedness, indebtedness of the Borrower arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course or other cash management services in the ordinary course of business;
|
(k)
|
to the extent constituting Indebtedness, obligations of the Borrower in respect of performance bonds, bid bonds, appeal bonds, surety bonds, indemnification obligations, obligations to pay insurance premiums, take-or-pay or take-or-deliver obligations contained in supply agreements, cash deposits incurred in connection with natural gas purchases and similar obligations incurred in the ordinary course of business;
|
(l)
|
Indebtedness of the Borrower in respect of any bankers’ acceptance, letter of credit, warehouse receipt or similar facilities entered into in the ordinary course of business;
|
(m)
|
Indebtedness of the Borrower in respect of netting services, overdraft protections and otherwise in connection with deposit accounts;
|
(n)
|
Indebtedness of the Borrower in an amount not to exceed $250,000,000 to finance the restoration of the Project following an Event of Loss;
|
(o)
|
Indebtedness of the Borrower consisting of the financing of insurance premiums in customary amounts consistent with the operations and business of the Borrower in the ordinary course of business;
|
(p)
|
Indebtedness of the Borrower outstanding on the date hereof that was permitted to be incurred under the Common Terms Agreement as in effect on the date hereof; and
|
(q)
|
the incurrence by the Borrower of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (q), not to exceed $250,000,000.
|
(1)
|
the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
|
(2)
|
in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the least of:
|
(A)
|
the Fair Market Value of such asset at the date of determination;
|
(B)
|
the amount of the Indebtedness of the other Person; and
|
(C)
|
the principal amount of the Indebtedness, in the case of any other Indebtedness.
|
2.6.
|
Development Expenditures
|
2.7.
|
[Reserved]
|
2.8.
|
Limitation on Liens
|
2.9.
|
Project Documents.
|
(a)
|
The Borrower shall not, without the prior written consent of the Required Secured Parties in consultation with the Independent Engineer, (i) suspend, cancel or terminate any Material Project Document or Government Approval applicable to the Borrower or the Development or consent to or accept any cancellation or termination thereof, (ii) sell, transfer, assign (other than pursuant to the Security Documents and other than any assignment by Cheniere LNG O&M Services, LLC of its rights and obligations under the O&M Agreement by the Manager of its rights and obligations under the Management Services Agreement, in each case to an Affiliate of the Borrower that has access to sufficient experienced personnel to perform their respective obligations thereunder) or otherwise dispose of (by operation of law or otherwise) or consent to any such sale, transfer, assignment or disposition of any part of its interest in or rights or obligations under or any Material Project Party’s interest in or rights or obligations under any Material Project Document or Government Approval (other than the sub-license of any EPC Contract-related intellectual property rights to an Affiliate of the Borrower and other than the collateral assignment pursuant to the CCTPL Consent Agreement), (iii) waive any material default under, or material breach of, any Material Project Document or waive, forgive, compromise, settle or release any material right, interest or entitlement, howsoever arising, under, or in respect of, any Material Project Document, (iv) initiate or settle a material arbitration proceeding under any Material Project Document or Government Approval, (v) agree to or petition, request or take any other material legal or administrative action that seeks, or could reasonably be expected, to Impair any Material Project Document or Government Approval, (vi) amend, supplement or modify or in any way vary, or agree to the variation of, the FOB Sale and Purchase Agreements, the EPC Contracts or the Sabine Pass TUA or any material Government Approval in a manner that, taken as a whole, is adverse in any material respect to the Secured Parties (provided that the Borrower may (x) amend or modify any conditions of such Government Approvals so long as such amendment or modification is not materially more restrictive or onerous on the Borrower or could not reasonably be expected to have a Material Adverse Effect, or (y) seek the satisfaction or waiver of such conditions without the prior written consent of the Required Secured Parties) or of the performance of any material covenant or obligation by any other Person under any such agreement (other than Change Orders, which Change Order protocol is addressed in Section 2.13 of Schedule 8.01 (EPC
|
(b)
|
Except for (i) any documents relating to Working Capital Debt entered into upon satisfaction of the conditions set forth in Section 2.4 (Working Capital Debt) of the Common Terms Agreement, (ii) any documents relating to PDE Debt entered into upon satisfaction of the conditions set forth in Section 2.5 (PDE Debt) of the Common Terms Agreement, (iii) any documents relating to Permitted Refinancing Indebtedness entered into upon satisfaction of the conditions set forth in Section 2.6 (Replacement Debt) of the Common Terms Agreement and (iv) any Approved Train 6 Sale and Purchase Agreement, the Borrower shall not enter into any Additional Material Project Document if entry into such Additional Material Project Document is, taken as a whole, adverse in any material respect to the Secured Parties without the prior written consent of the Required Secured Parties, provided, that the Borrower shall, in connection with its request for the written consent of the Required Secured Parties, (A) deliver to the Common Security Trustee and each Secured Debt Holder Group Representative copies of all such proposed Additional Material Project Documents not less than five (5) Business Days prior to the proposed execution thereof and (B) use commercially reasonable efforts to deliver to the Common Security Trustee and each Secured Debt Holder Group Representative copies of all proposed Ancillary Documents relating to any such Additional Material Project Document in form and substance satisfactory to the Common Security Trustee prior to the execution of such Additional Material Project Document.
|
(c)
|
Without prejudice to Section 2.9(a) (Project Documents, Etc.) of this Schedule 8.01, the Borrower shall not, without the prior written consent of the Required Secured Parties, agree to any early termination or amendment, modification, or variation of the Total TUA or of the performance of any covenant or obligation by any other Person under the Total TUA, which, amendment, modification or variation could reasonably be expected to have a Material Adverse Effect.
|
(d)
|
The Borrower shall take all actions required and all other steps reasonably requested by the Common Security Trustee to cause each Material Project Document and Additional Material Project Document entered into after the Closing Date to be or become subject to the Lien of the Security Documents (whether by amendment to any Security Document or otherwise) and deliver or cause to be delivered to the Common Security Trustee all Ancillary Documents related thereto, in each case, within a commercially reasonable time, but in no event later than thirty (30) days following the execution of such Material Project Documents or Additional Material Project Document.
|
(e)
|
The Borrower shall not permit any counterparty to a Material Project Document to substitute, diminish or otherwise replace any performance security, letter of credit
|
2.10.
|
Terminal Use Agreements
|
2.11.
|
Transactions with Affiliates
|
2.12.
|
Accounts
|
(a)
|
Other than Permitted Investments held in accordance with the Accounts Agreement for which the Borrower is a beneficiary, the Borrower shall not open or maintain, or permit or instruct any other Person to open or maintain on its behalf, or use or be the beneficiary of any account other than (i) the Accounts, (ii) the Excluded Unsecured Accounts and (iii) an account holding Escrowed Amounts (as defined in each EPC Contract).
|
(b)
|
The Borrower shall not change the name or account number of any of the Accounts without the prior written consent of the Common Security Trustee.
|
(c)
|
For purposes of this Section 2.12, the term “Excluded Unsecured Accounts” means segregated Deposit Accounts (as defined in Article 9 of the UCC) constituting (and the balance of which consists solely of funds set aside in connection with) margin accounts for Permitted Hedging Agreements of the type described in clause (b) of the definition thereof (including the funds or other property held in or maintained in any such account), entered into in the ordinary course of business, for so long as each such Permitted Hedging Agreement does not constitute a Secured Gas Hedge.
|
2.13.
|
EPC and Construction Contracts
|
(a)
|
except for Change Orders specified in Schedule 7.13 of the Common Terms Agreement, initiate or consent to (without the consent of the Required Senior Lenders in consultation with the Independent Engineer) any Change Order that:
|
(i)
|
on or after the Fifth Omnibus Amendment Effective Date, increases the contract price of any of the EPC Contracts as of the Closing Date; provided, that:
|
(A)
|
the Borrower may, without the consent of the Required Senior Lenders and subject to clauses (ii) through (xi) of this Section 2.13(a), enter into any Change Order or make payment of any claim under any of the EPC Contracts, if (aa) the amount of any such Change Order or payment is less than twenty-five million Dollars ($25,000,000) and the aggregate of all such Change Orders or payments with respect to such EPC Contract (together with any Change Orders under the EPC Contracts entered into after the Closing Date) is less than one hundred million Dollars ($100,000,000) and (bb) the Senior Facility Agent has received an IE Confirming Certificate;
|
(B)
|
if an event of Force Majeure or Change in Law (as each such term is described in the respective EPC Contract) prompts the EPC Contractor to request a Change Order to which it is entitled under the terms of the applicable EPC Contract, the Borrower shall be entitled to authorize such change without first obtaining the consent of the Required Senior Lenders if the amount of such change is within the remaining Contingency set forth in the Construction Budget, or to the extent that such amount exceeds the remaining Contingency, the Borrower has an additional source of funds for such excess amount in addition to any equity funds received on or prior to the Closing Date on terms reasonably satisfactory to the Common Security Trustee, provided, further, that any such change shall be subject to clauses (ii) through (xi) of this Section 2.13(a);
|
(C)
|
the Borrower may enter into any Change Order under any of the EPC Contracts for amounts in excess of the amounts specified in clause (a)(i)(A) above but subject to clauses (ii) through (xi) of this Section 2.13(a); provided, that with respect to this clause (C):
|
(1)
|
the Borrower or any other Person on behalf of the Borrower shall have transferred to the Common Security Trustee for deposit into the Construction Account equity funds provided by the Pledgor or the Sponsor in an amount that is in addition
|
(2)
|
the Common Security Trustee shall have received an IE Confirming Certificate; and
|
(D)
|
the Borrower may, without the consent of the Required Senior Lenders, enter into any Change Order, make payment of any claim under any of the EPC Contracts and/or modify the Construction Budget to the extent the Borrower has certified in writing to the Senior Facility Agent that such amounts are paid for using Distributable Cash;
|
(ii)
|
extends the Guaranteed Substantial Completion Date for any train of the Project (except as permitted by clause (b) of the definition of the Guaranteed Substantial Completion Date) or could reasonably be expected to materially adversely affect the likelihood of achieving Substantial Completion for any train of the Project by such date;
|
(iii)
|
except as a result of a buydown of the Performance Guarantees pursuant to Section 11.4 (Minimum Acceptance Criteria and Performance Liquidated Damages) of the relevant EPC Contract which is otherwise permitted pursuant to the terms hereof or as a result of a Change Order to which the EPC Contractor is entitled under such EPC Contract for a Change in Law (as defined in such EPC Contract) (and provided that the Independent Engineer consents (which consent shall not be unreasonably withheld, conditioned or delayed) to the Borrower’s consent to such Change Order pursuant to Section 6.2.C of such EPC Contract), modifies the Performance Guarantees, any other performance guarantee of the EPC Contractor or the criteria or procedures for the conduct or measuring the results of the Performance Tests (as each capitalized term used in this clause and not otherwise defined in this Agreement is defined in such EPC Contract);
|
(iv)
|
adjusts the Payment Schedules (other than as a result of a Change Order permitted by Section 2.13(a)(i) above or as otherwise permitted by this Agreement), adjusts the amount of or timing (including, without limitation, any adjustment of the Schedule Bonus Date for SP1, the Schedule Bonus Date for SP2, the Schedule Bonus Date for SP3 or the Schedule Bonus Date for SP4, but excluding the Schedule Bonus Date for SP6 under Section 13.2.C (Schedule Bonus) of the applicable EPC Contract) for payment of the
|
(v)
|
causes any material component or material design feature or aspect of the Project to materially deviate in any fundamental manner from the description thereof set forth in the schedules, exhibits, appendices or annexes to the relevant EPC Contract (other than as the result of a Change Order which is permitted by Section 2.13(a)(i) above or otherwise permitted by this Agreement);
|
(vi)
|
except as a result of a Change Order to which the EPC Contractor is entitled under the relevant EPC Contract for a Change in Law (as defined in such EPC Contract) or force majeure (and provided that the Independent Engineer consents (which consent shall not be unreasonably withheld, conditioned or delayed) to the Borrower’s consent to such force majeure Change Order pursuant to Section 6.2.C of the EPC Contract), diminishes or otherwise alters in any material respect the EPC Contractor’s liquidated damages obligations under the EPC Contract;
|
(vii)
|
except as a result of a Change Order to which the EPC Contractor is entitled under the relevant EPC Contract for a Change in Law (as defined in such EPC Contract) or force majeure (and provided that the Independent Engineer consents (which consent shall not be unreasonably withheld, conditioned or delayed) to the Borrower’s consent to such force majeure Change Order pursuant to Section 6.2.C of such EPC Contract), waives or alters the provisions under the relevant EPC Contract relating to default, termination or suspension or the waiver by the Borrower of any event that, with the giving of notice or the lapse of time or both, would entitle the Borrower to terminate such EPC Contract, provided that the Independent Engineer’s consent shall not be required for any waiver by the EPC Contractor of any termination right arising from such force majeure;
|
(viii)
|
except as a result of a Change Order to which the EPC Contractor is entitled under the relevant EPC Contract for a Change in Law (as defined in such EPC Contract), adversely modifies or impairs the enforceability of any warranty under such EPC Contract; provided, that this clause shall not
|
(ix)
|
except as a result of a Change Order to which the EPC Contractor is entitled under the relevant EPC Contract for a Change in Law (as defined in such EPC Contract) (and provided that the Independent Engineer consents (which consent shall not be unreasonably withheld, conditioned or delayed) to the Borrower’s consent to such Change Order pursuant to Section 6.2.C of such EPC Contract), impairs the ability of the Project to satisfy the Performance Tests;
|
(x)
|
results in the revocation or adverse modification of any material Government Approval; or
|
(xi)
|
causes the Project not to comply in all material respects with applicable Government Rule or the Borrower’s Contractual Obligations;
|
(b)
|
approve any plan under Section 11 (Completion) of any of the EPC Contracts without the consent of the Common Security Trustee (in consultation with the Independent Engineer); provided, however, that the Common Security Trustee shall use reasonable efforts to promptly review all relevant documentation provided to it by the Borrower (and shall request the Independent Engineer to do the same);
|
(c)
|
certify to, consent to or otherwise request or permit through a Change Order or otherwise without the consent of the Common Security Trustee (in consultation with the Independent Engineer) the occurrence of Substantial Completion or Ready for Start Up with respect to each train of the Project, or make any election to take care, custody and control of the Project (or any portion thereof) pursuant to Section 11.4.B (Minimum Acceptance Criteria and Performance Liquidated Damages) (or any other provision thereof) of any of the EPC Contracts; provided, however, that the Common Security Trustee shall use reasonable efforts to promptly review all relevant documentation provided to it (directly or indirectly) by the Borrower (and shall request the Independent Engineer to do the same);
|
(d)
|
collect on an EPC Letter of Credit under Section 7.8 (Procedure for Withholding, Offset and Collection on the Letter of Credit) of any of the EPC Contracts unless there are no future payments owed to the EPC Contractor against which the Borrower may offset the amounts due to the Borrower under such Section 7.8; or
|
(e)
|
without consent of the Common Security Trustee (in consultation with the Independent Engineer not to be unreasonably withheld, conditioned or delayed):
|
(i)
|
initiate or consent to any (A) Change Order that directly or indirectly specifies the capital spare parts to be delivered to the Site by the EPC Contractor pursuant to Section 3.4.B (Capital Spare Parts) of the Stage 1 EPC Contract, taking into account any other capital spare parts that the Borrower intends
|
(ii)
|
consent to any initial integration plan proposed by the EPC Contractor under Section 3.25.B (Scheduled Activities) of any of the EPC Contracts.
|
2.14.
|
GAAP
|
2.15.
|
Use of Proceeds; Margin Regulations
|
2.16.
|
Permitted Investments
|
2.17.
|
Hedging Arrangements
|
2.18.
|
Environmental Matters
|
2.19.
|
Guarantees
|
2.20.
|
Gas Purchase Contracts and LNG Sales Contracts
|
(a)
|
The Borrower shall not enter into gas purchase contracts with firm receipt obligations for a volume of gas in excess of that which is required for the Borrower to be able to meet its obligations under the FOB Sale and Purchase Agreements, the CMI LNG
|
(b)
|
The Borrower shall not enter into any LNG sales contracts except for (i) the FOB Sale and Purchase Agreements, (ii) the CMI LNG Sale and Purchase Agreement, (iii) LNG sales contracts with counterparties who at the time of execution of the contract (A) have an Investment Grade Rating from at least one Acceptable Rating Agency, or who provide a guaranty from an affiliate with at least one of such ratings or (B) have a direct or indirect parent with an Investment Grade Rating from at least one Acceptable Rating Agency and either the counterparty or an affiliate of such counterparty who is providing a guaranty has a tangible net worth in excess of $15,000,000,000, (iv) LNG sales contracts with a term of less than five years and greater than one year with counterparties who do not at the time of execution of the contract have an Investment Grade Rating from at least one Acceptable Rating Agency to the extent the counterparty provides a letter of credit from a financial institution rated at least A- by S&P or A3 by Moody’s (or, if any of such entities ceases to provide such ratings, the equivalent credit rating from any other Acceptable Rating Agency) with respect to its estimated obligations under the contract for a period of 60 days, (v) LNG sales contracts with a term of one year or less, (vi) LNG sales contracts with counterparties who prepay (in cash) for their LNG purchase obligations under such contracts, (vii) any Approved Train 6 Sale and Purchase Agreement or (viii) LNG sales contracts otherwise approved by the Required Secured Parties; provided, that in the case of clauses (iii), (iv), (v), (vi), (vii) and (viii) above, performance under such contracts shall not adversely affect the ability of the Borrower to meet its obligations under any contract listed in clause (i) above.
|
2.21.
|
Sale of Natural Gas in Interstate Commerce
|
PROJECT NAME: Corpus Christi Stage 1 Liquefaction Facility
OWNER: Corpus Christi Liquefaction, LLC
CONTRACTOR: Bechtel Oil, Gas and Chemicals, Inc.
DATE OF AGREEMENT: December 6, 2013
|
CHANGE ORDER NUMBER: CO-00051
DATE OF CHANGE ORDER: April 19, 2019
|
1)
|
Pursuant to Article 6 of the Agreement, Parties agree to the additional and revised fencing scope of work, as further described in Exhibit 5 of this Change Order, which is based on the following two (2) approved Trends:
|
i.
|
Trend No. S1-2066 - Additional Fencing / Fencing Revisions
|
ii.
|
Trend No. S1-3003 - Train 3 Vapor Fence Scope Reduction
|
2)
|
The summary cost breakdown for the scope of this Change Order is detailed in Exhibit 1 of this Change Order.
|
3)
|
The detailed cost breakdown for the scope of this Change Order is detailed in Exhibit 3 (Trend No. S1-2066) and Exhibit 4 (Trend No. S1-3003).
|
4)
|
Schedule C-1 (Milestone Payment Schedule) of Attachment C of the Agreement will be amended by including the Milestone(s) listed in Exhibit 2 of this Change Order.
|
5)
|
Exhibit 6 of this Change Order includes the following three (3) overall plot plans representing the agreed fencing modifications as described in the scope of work under Exhibit 5 of this Change Order:
|
i.
|
Plant Fencing Layout at First Cargo Overall Plan
|
ii.
|
Plant Fencing Layout at TCCC Subproject 1 Overall Plan
|
iii.
|
Plant Fencing Layout at TCCC Subproject 3 Overall Plan
|
The original Contract Price was.........................................................................................................................
|
$
|
7,080,830,000
|
|
Net change by previously authorized Change Orders (0001-00050).................................................................
|
$
|
704,435,107
|
|
The Contract Price prior to this Change Order was...........................................................................................
|
$
|
7,785,265,107
|
|
The Aggregate Equipment Price will be changed by this Change Order in the amount of...............................
|
$
|
[***]
|
|
The Aggregate Labor and Skills Price will be changed by this Change Order in the amount of......................
|
$
|
[***]
|
|
The new Contract Price including this Change Order will be...........................................................................
|
$
|
7,786,553,578
|
|
The original Aggregate Equipment Price was...................................................................................................
|
$
|
[***]
|
Net change by previously authorized Change Orders (0001-00050).................................................................
|
$
|
[***]
|
The Aggregate Equipment Price prior to this Change Order was......................................................................
|
$
|
[***]
|
The Aggregate Equipment Price will be changed by this Change Order in the amount of...............................
|
$
|
[***]
|
The new Aggregate Equipment Price including this Change Order will be .....................................................
|
$
|
[***]
|
The original Aggregate Labor and Skills Price was..........................................................................................
|
$
|
[***]
|
Net change by previously authorized Change Orders (0001-00050).................................................................
|
$
|
[***]
|
The Aggregate Labor and Skills Price prior to this Change Order was.............................................................
|
$
|
[***]
|
The Aggregate Labor and Skills Price will be changed by this Change Order in the amount of......................
|
$
|
[***]
|
The new Aggregate Labor and Skills Price including this Change Order will be.............................................
|
$
|
[***]
|
The original Aggregate Provisional Sum was....................................................................................................
|
$
|
950,561,351
|
|
Net change by previously authorized Change Orders (0001-00050).................................................................
|
$
|
(812,283,979
|
)
|
The Aggregate Provisional Sum prior to this Change Order was......................................................................
|
$
|
138,277,372
|
|
The Aggregate Provisional Sum will be unchanged by this Change Order in the amount of...........................
|
$
|
—
|
|
The new Aggregate Provisional Sum including this Change Order will be......................................................
|
$
|
138,277,372
|
|
/s/ David Craft
|
|
/s/ Bhupesh Thakkar
|
Owner
|
|
Contractor
|
David Craft
|
|
Bhupesh Thakkar
|
Name
|
|
Name
|
SVP E&C
|
|
Program Manager, SVP
|
Title
|
|
Title
|
April 30, 2019
|
|
April 24, 2019
|
Date of Signing
|
|
Date of Signing
|
PROJECT NAME: Corpus Christi Stage 1 Liquefaction Facility
OWNER: Corpus Christi Liquefaction, LLC
CONTRACTOR: Bechtel Oil, Gas and Chemicals, Inc.
DATE OF AGREEMENT: December 6, 2013
|
CHANGE ORDER NUMBER: CO-00052
DATE OF CHANGE ORDER: April 19, 2019
|
1)
|
Pursuant to Article 6 of the Agreement, Parties agree this Change Order includes the design, procurement and installation by Contractor of a new manual gas sampler for ship loading at the West Jetty.
|
i.
|
This Change Order is in accordance with the approved Trend No. S1-2083.
|
ii.
|
This Change Order includes Owner’s request for Contractor to add one (1) Air Dimensions Dia-Vac pump and regulator
|
iii.
|
This Change Order includes Valtronics support for commissioning.
|
2)
|
The summary cost breakdown for the scope of this Change Order is detailed in Exhibit 1 of this Change Order.
|
3)
|
The detailed cost breakdown for the scope of this Change Order is detailed in Exhibit 3 (Trend No. S1-2083).
|
4)
|
Schedule C-1 (Milestone Payment Schedule) of Attachment C of the Agreement will be amended by including the Milestone(s) listed in Exhibit 2 of this Change Order.
|
The original Contract Price was.........................................................................................................................
|
$
|
7,080,830,000
|
|
Net change by previously authorized Change Orders (0001-00051).................................................................
|
$
|
705,723,578
|
|
The Contract Price prior to this Change Order was...........................................................................................
|
$
|
7,786,553,578
|
|
The Aggregate Equipment Price will be changed by this Change Order in the amount of...............................
|
$
|
[***]
|
|
The Aggregate Labor and Skills Price will be changed by this Change Order in the amount of......................
|
$
|
[***]
|
|
The new Contract Price including this Change Order will be...........................................................................
|
$
|
7,787,073,783
|
|
The original Aggregate Equipment Price was...................................................................................................
|
$
|
[***]
|
Net change by previously authorized Change Orders (0001-00051).................................................................
|
$
|
[***]
|
The Aggregate Equipment Price prior to this Change Order was......................................................................
|
$
|
[***]
|
The Aggregate Equipment Price will be changed by this Change Order in the amount of...............................
|
$
|
[***]
|
The new Aggregate Equipment Price including this Change Order will be .....................................................
|
$
|
[***]
|
The original Aggregate Labor and Skills Price was..........................................................................................
|
$
|
[***]
|
Net change by previously authorized Change Orders (0001-00051).................................................................
|
$
|
[***]
|
The Aggregate Labor and Skills Price prior to this Change Order was.............................................................
|
$
|
[***]
|
The Aggregate Labor and Skills Price will be changed by this Change Order in the amount of......................
|
$
|
[***]
|
The new Aggregate Labor and Skills Price including this Change Order will be.............................................
|
$
|
[***]
|
The original Aggregate Provisional Sum was....................................................................................................
|
$
|
950,561,351
|
|
Net change by previously authorized Change Orders (0001-00051).................................................................
|
$
|
(812,283,979
|
)
|
The Aggregate Provisional Sum prior to this Change Order was......................................................................
|
$
|
138,277,372
|
|
The Aggregate Provisional Sum will be unchanged by this Change Order in the amount of...........................
|
$
|
—
|
|
The new Aggregate Provisional Sum including this Change Order will be......................................................
|
$
|
138,277,372
|
|
/s/ David Craft
|
|
/s/ Bhupesh Thakkar
|
Owner
|
|
Contractor
|
David Craft
|
|
Bhupesh Thakkar
|
Name
|
|
Name
|
SVP E&C
|
|
Program Manager, SVP
|
Title
|
|
Title
|
April 30, 2019
|
|
April 24, 2019
|
Date of Signing
|
|
Date of Signing
|
PROJECT NAME: Corpus Christi Stage 2 Liquefaction Facility
OWNER: Corpus Christi Liquefaction, LLC
CONTRACTOR: Bechtel Oil, Gas and Chemicals, Inc.
DATE OF AGREEMENT: December 12, 2017
|
CHANGE ORDER NUMBER: CO-00013
DATE OF CHANGE ORDER: May 2, 2019
|
1.
|
Pursuant to Article 6 of the Agreement, Parties agree this Change Order includes impacts from Section 232 Tariffs on Steel and Aluminum on Applicable Law, and Change in Law impacts imposing Anti-dumping (ADA) and Countervailing Duties (CVD) on specific steel and aluminum imports, which are based on the following two (2) approved Trends:
|
i.
|
Trend No. S2-0005a - Impacts of Policy Change/Applicable Law Imposing Tariff on Steel and Aluminum (Section 232).
|
ii.
|
Trend No. S2-0006a - Anti-Dumping and Countervailing Duties (ADA/CVD).
|
2.
|
This Change Order includes the costs through December 30, 2018 for Trend No. S2-0005a, and December 28, 2018 for Trend No. S2-0006a respectively, and excludes all costs, cost impacts, or effects of the change associated with these trends beyond these dates. Any subsequent costs, cost impacts, or effects of the change associated with these trends beyond these dates will be assessed on a quarterly basis and included in separate, future Change Order(s).
|
3.
|
The summary cost breakdown for the scope of this Change Order is detailed in Exhibit 1 of this Change Order.
|
4.
|
The detailed cost breakdown for the scope of this Change Order is detailed in Exhibit 3 (Trend No. S2-0005a) and Exhibit 4 (Trend No. S2-0006a).
|
5.
|
The detailed costs for Customs Entry for the scope of this Change Order is detailed in Exhibit 6 (Trend No. S2-0005a) and Exhibit 7 (Trend No. S2-0006a).
|
6.
|
The description of the cost impacts included in this Change Order is detailed in Exhibit 5 of this Change Order.
|
7.
|
Schedules C-1 and C-3 (Milestone Payment Schedules) of Attachment C of the Agreement will be amended by including the Milestones listed in Exhibit 2 of this Change Order.
|
The original Contract Price was.........................................................................................................................
|
$
|
2,360,000,000
|
|
Net change by previously authorized Change Orders (0001-00012).................................................................
|
$
|
5,830,288
|
|
The Contract Price prior to this Change Order was...........................................................................................
|
$
|
2,365,830,288
|
|
The Aggregate Equipment Price will be changed by this Change Order in the amount of...............................
|
$
|
[***]
|
|
The Aggregate Labor and Skills Price will be changed by this Change Order in the amount of......................
|
$
|
[***]
|
|
The new Contract Price including this Change Order will be...........................................................................
|
$
|
2,385,256,080
|
|
The original Aggregate Equipment Price was...................................................................................................
|
$
|
[***]
|
Net change by previously authorized Change Orders (0001-00012).................................................................
|
$
|
[***]
|
The Aggregate Equipment Price prior to this Change Order was......................................................................
|
$
|
[***]
|
The Aggregate Equipment Price will be changed by this Change Order in the amount of...............................
|
$
|
[***]
|
The new Aggregate Equipment Price including this Change Order will be .....................................................
|
$
|
[***]
|
The original Aggregate Labor and Skills Price was..........................................................................................
|
$
|
[***]
|
Net change by previously authorized Change Orders (0001-00012).................................................................
|
$
|
[***]
|
The Aggregate Labor and Skills Price prior to this Change Order was.............................................................
|
$
|
[***]
|
The Aggregate Labor and Skills Price will be changed by this Change Order in the amount of......................
|
$
|
[***]
|
The new Aggregate Labor and Skills Price including this Change Order will be.............................................
|
$
|
[***]
|
The original Aggregate Provisional Sum was....................................................................................................
|
$
|
295,549,906
|
|
Net change by previously authorized Change Orders (0001-00050).................................................................
|
$
|
(18,272,757
|
)
|
The Aggregate Provisional Sum prior to this Change Order was......................................................................
|
$
|
277,277,149
|
|
The Aggregate Provisional Sum will be unchanged by this Change Order in the amount of...........................
|
$
|
—
|
|
The new Aggregate Provisional Sum including this Change Order will be......................................................
|
$
|
277,277,149
|
|
/s/ David Craft
|
|
/s/ Bhupesh Thakkar
|
Owner
|
|
Contractor
|
David Craft
|
|
Bhupesh Thakkar
|
Name
|
|
Name
|
SVP E&C
|
|
Program Manager, Bechtel
|
Title
|
|
Title
|
May 14, 2019
|
|
May 6, 2019
|
Date of Signing
|
|
Date of Signing
|
PROJECT NAME: Corpus Christi Stage 2 Liquefaction Facility
OWNER: Corpus Christi Liquefaction, LLC
CONTRACTOR: Bechtel Oil, Gas and Chemicals, Inc.
DATE OF AGREEMENT: December 12, 2017
|
CHANGE ORDER NUMBER: CO-00014
DATE OF CHANGE ORDER: May 2, 2019
|
1.
|
Pursuant to Article 6 of the Agreement, Parties agree this Change Order includes the procurement of long lead items associated with Owner’s request to add a Jump-over line at Tank B with connection to future Stage 3 Tie-in Interface per the approved Trend No. S2-0035.
|
2.
|
This Change Order is limited to the procurement of long lead items only. The remainder full scope of work associated with the Tank B Jump-over Tie-In Interface will be subject to a future Change Order (Trend No. S2-0032).
|
3.
|
The summary cost breakdown for the scope of this Change Order is detailed in Exhibit 1 of this Change Order.
|
4.
|
The detailed cost breakdown for the scope of this Change Order is detailed in Exhibit 3 (Trend No. S2-0035).
|
5.
|
Schedules C-1 and C-3 (Milestone Payment Schedules) of Attachment C of the Agreement will be amended by including the Milestones listed in Exhibit 2 of this Change Order.
|
The original Contract Price was.........................................................................................................................
|
$
|
2,360,000,000
|
|
Net change by previously authorized Change Orders (0001-00013).................................................................
|
$
|
25,256,080
|
|
The Contract Price prior to this Change Order was...........................................................................................
|
$
|
2,385,256,080
|
|
The Aggregate Equipment Price will be changed by this Change Order in the amount of...............................
|
$
|
[***]
|
|
The Aggregate Labor and Skills Price will be changed by this Change Order in the amount of......................
|
$
|
[***]
|
|
The new Contract Price including this Change Order will be...........................................................................
|
$
|
2,385,706,282
|
|
The original Aggregate Equipment Price was...................................................................................................
|
$
|
[***]
|
Net change by previously authorized Change Orders (0001-00013).................................................................
|
$
|
[***]
|
The Aggregate Equipment Price prior to this Change Order was......................................................................
|
$
|
[***]
|
The Aggregate Equipment Price will be changed by this Change Order in the amount of...............................
|
$
|
[***]
|
The new Aggregate Equipment Price including this Change Order will be .....................................................
|
$
|
[***]
|
The original Aggregate Labor and Skills Price was..........................................................................................
|
$
|
[***]
|
Net change by previously authorized Change Orders (0001-00013).................................................................
|
$
|
[***]
|
The Aggregate Labor and Skills Price prior to this Change Order was.............................................................
|
$
|
[***]
|
The Aggregate Labor and Skills Price will be changed by this Change Order in the amount of......................
|
$
|
[***]
|
The new Aggregate Labor and Skills Price including this Change Order will be.............................................
|
$
|
[***]
|
The original Aggregate Provisional Sum was....................................................................................................
|
$
|
295,549,906
|
|
Net change by previously authorized Change Orders (0001-00050).................................................................
|
$
|
(18,272,757
|
)
|
The Aggregate Provisional Sum prior to this Change Order was......................................................................
|
$
|
277,277,149
|
|
The Aggregate Provisional Sum will be unchanged by this Change Order in the amount of...........................
|
$
|
—
|
|
The new Aggregate Provisional Sum including this Change Order will be......................................................
|
$
|
277,277,149
|
|
/s/ David Craft
|
|
/s/ Bhupesh Thakkar
|
Owner
|
|
Contractor
|
David Craft
|
|
Bhupesh Thakkar
|
Name
|
|
Name
|
SVP E&C
|
|
Program Manager
|
Title
|
|
Title
|
May 14, 2019
|
|
May 6, 2019
|
Date of Signing
|
|
Date of Signing
|
PROJECT NAME: Corpus Christi Stage 2 Liquefaction Facility
OWNER: Corpus Christi Liquefaction, LLC
CONTRACTOR: Bechtel Oil, Gas and Chemicals, Inc.
DATE OF AGREEMENT: December 12, 2017
|
CHANGE ORDER NUMBER: CO-00015
DATE OF CHANGE ORDER: June 4, 2019
|
1.
|
Pursuant to Article 6 of the Agreement, Parties agree this Change Order includes impacts from Section 232 Tariffs on Steel and Aluminum on Applicable Law, and Change in Law impacts imposing Anti-dumping (ADA) and Countervailing Duties (CVD) on specific steel and aluminum imports, which are based on the following two (2) approved Trends:
|
i.
|
Trend No. S2-0005b - Impacts of Policy Change/Applicable Law Imposing Tariff on Steel and Aluminum (Section 232); and
|
ii.
|
Trend No. S2-0006b - Anti-Dumping and Countervailing Duties (ADA/CVD).
|
2.
|
This Change Order includes the costs during the 1st Quarter of 2019, and excludes all costs, cost impacts, or effects of the change associated with these trends beyond these dates. Any subsequent costs, cost impacts, or effects of the change associated with these trends beyond these dates will be assessed on a quarterly basis and included in separate, future Change Order(s).
|
3.
|
The summary cost breakdown for the scope of this Change Order is detailed in Exhibit 1 of this Change Order.
|
4.
|
The detailed cost breakdown for the scope of this Change Order is detailed in Exhibit 3 (Trend No. S2-0005b) and Exhibit 4 (Trend No. S2-0006b).
|
5.
|
The detailed costs for Customs Entry for the scope of this Change Order is detailed in Exhibit 5 (Trend No. S2-0005b) and Exhibit 6 (Trend No. S2-0006b).
|
6.
|
Schedules C-1 and C-3 (Milestone Payment Schedules) of Attachment C of the Agreement will be amended by including the Milestones listed in Exhibit 2 of this Change Order.
|
The original Contract Price was.........................................................................................................................
|
$
|
2,360,000,000
|
|
Net change by previously authorized Change Orders (0001-00014).................................................................
|
$
|
25,706,282
|
|
The Contract Price prior to this Change Order was...........................................................................................
|
$
|
2,385,706,282
|
|
The Aggregate Equipment Price will be changed by this Change Order in the amount of...............................
|
$
|
[***]
|
|
The Aggregate Labor and Skills Price will be changed by this Change Order in the amount of......................
|
$
|
[***]
|
|
The new Contract Price including this Change Order will be...........................................................................
|
$
|
2,391,352,937
|
|
The original Aggregate Equipment Price was...................................................................................................
|
$
|
[***]
|
Net change by previously authorized Change Orders (0001-00014).................................................................
|
$
|
[***]
|
The Aggregate Equipment Price prior to this Change Order was......................................................................
|
$
|
[***]
|
The Aggregate Equipment Price will be changed by this Change Order in the amount of...............................
|
$
|
[***]
|
The new Aggregate Equipment Price including this Change Order will be .....................................................
|
$
|
[***]
|
The original Aggregate Labor and Skills Price was..........................................................................................
|
$
|
[***]
|
Net change by previously authorized Change Orders (0001-00014).................................................................
|
$
|
[***]
|
The Aggregate Labor and Skills Price prior to this Change Order was.............................................................
|
$
|
[***]
|
The Aggregate Labor and Skills Price will be changed by this Change Order in the amount of......................
|
$
|
[***]
|
The new Aggregate Labor and Skills Price including this Change Order will be.............................................
|
$
|
[***]
|
The original Aggregate Provisional Sum was....................................................................................................
|
$
|
295,549,906
|
|
Net change by previously authorized Change Orders (0001-00014).................................................................
|
$
|
(18,272,757
|
)
|
The Aggregate Provisional Sum prior to this Change Order was......................................................................
|
$
|
277,277,149
|
|
The Aggregate Provisional Sum will be unchanged by this Change Order in the amount of...........................
|
$
|
—
|
|
The new Aggregate Provisional Sum including this Change Order will be......................................................
|
$
|
277,277,149
|
|
/s/ David Craft
|
|
/s/ Bhupesh Thakkar
|
Owner
|
|
Contractor
|
David Craft
|
|
Bhupesh Thakkar
|
Name
|
|
Name
|
SVP E&C
|
|
Program Manager, Cheniere Projects
|
Title
|
|
Title
|
May 14, 2019
|
|
June 5, 2019
|
Date of Signing
|
|
Date of Signing
|
PROJECT NAME: Sabine Pass LNG Stage 2 Liquefaction Facility
OWNER: Sabine Pass Liquefaction, LLC
CONTRACTOR: Bechtel Oil, Gas and Chemicals, Inc.
DATE OF AGREEMENT: December 20, 2012
|
CHANGE ORDER NUMBER: CO-00045
DATE OF CHANGE ORDER: June 7, 2019
|
The original Contract Price was.........................................................................................................................
|
$
|
3,769,000,000
|
|
Net change by previously authorized Change Orders (00001-00044)...............................................................
|
$
|
68,707,800
|
|
The Contract Price prior to this Change Order was...........................................................................................
|
$
|
3,837,707,800
|
|
The Contract Price will be revised by this Change Order in the amount of .....................................................
|
$
|
—
|
|
The new Contract Price including this Change Order will be...........................................................................
|
$
|
3,837,707,800
|
|
/s/ David Craft
|
|
/s/ Maurissa Douglas Rogers
|
Owner
|
|
Contractor
|
David Craft
|
|
Maurissa D Rogers
|
Name
|
|
Name
|
SVP E&C
|
|
Sr Project Manager, PVP
|
Title
|
|
Title
|
June 21, 2019
|
|
June 7, 2019
|
Date of Signing
|
|
Date of Signing
|
PROJECT NAME: Sabine Pass LNG Stage 4 Liquefaction Facility
OWNER: Sabine Pass Liquefaction, LLC
CONTRACTOR: Bechtel Oil, Gas and Chemicals, Inc.
DATE OF AGREEMENT: November 7, 2018
|
CHANGE ORDER NUMBER: CO-00001
DATE OF CHANGE ORDER: June 3, 2019
|
1.
|
Whereas, the Parties intend to amend Article 8.2A of the Agreement to reduce the (“Windstorms”) loss or damage from Five Hundred Million U.S. Dollars (U.S.$500,000,000) to Three Hundred Million U.S. Dollars (U.S.$300,000,000) in the cumulative aggregate with respect to the Work, the Project, Subproject 1, Subproject 2, Subproject 3, Subproject 4, Subproject 5, and Subproject 6, collectively.
|
2.
|
Now therefore, Section 8.2A of the Agreement is deleted and replaced with the following:
|
3.
|
The Contract Price is not adjusted by this Change Order.
|
The original Contract Price was.........................................................................................................................
|
$
|
2,016,892,537
|
|
Net change by previously authorized Change Orders .......................................................................................
|
$
|
—
|
|
The Contract Price prior to this Change Order was...........................................................................................
|
$
|
2,016,892,573
|
|
The Contract Price will be revised by this Change Order in the amount of .....................................................
|
$
|
—
|
|
The new Contract Price including this Change Order will be...........................................................................
|
$
|
2,016,892,573
|
|
/s/ David Craft
|
|
/s/ Maurissa D Rogers
|
Owner
|
|
Contractor
|
David Craft
|
|
Maurissa D Rogers
|
Name
|
|
Name
|
SVP E&C
|
|
Sr Project Manager, PVP
|
Title
|
|
Title
|
June 3, 2019
|
|
June 3, 2019
|
Date of Signing
|
|
Date of Signing
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Cheniere Energy, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Jack A. Fusco
|
Jack A. Fusco
Chief Executive Officer of |
Cheniere Energy, Inc.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Cheniere Energy, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Michael J. Wortley
|
Michael J. Wortley
Chief Financial Officer of |
Cheniere Energy, Inc.
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Jack A. Fusco
|
Jack A. Fusco
Chief Executive Officer of |
Cheniere Energy, Inc.
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Michael J. Wortley
|
Michael J. Wortley
Chief Financial Officer of |
Cheniere Energy, Inc.
|