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T
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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£
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
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|
|
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Delaware
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20-5913059
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
|
|
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700 Milam Street, Suite 800
Houston, Texas
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77002
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(Address of principal executive offices)
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(Zip Code)
|
|
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Large accelerated filer
£
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Accelerated filer
T
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Non-accelerated filer
£
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Smaller reporting company
£
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(Do not check if a smaller reporting company)
|
|
|
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|||
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March 31,
|
|
December 31,
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||||
|
|
2013
|
|
2012
|
||||
ASSETS
|
|
(unaudited)
|
|
|
||||
Current assets
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
456,852
|
|
|
$
|
419,292
|
|
Restricted cash and cash equivalents
|
|
252,854
|
|
|
92,519
|
|
||
Accounts and interest receivable
|
|
170
|
|
|
44
|
|
||
Accounts receivable—affiliate
|
|
1,095
|
|
|
2,005
|
|
||
Advances to affiliate
|
|
10,008
|
|
|
4,987
|
|
||
LNG inventory
|
|
2,157
|
|
|
2,625
|
|
||
LNG inventory - affiliate
|
|
2,448
|
|
|
4,420
|
|
||
Prepaid expenses and other
|
|
7,303
|
|
|
6,652
|
|
||
Total current assets
|
|
732,887
|
|
|
532,544
|
|
||
|
|
|
|
|
||||
Non-current restricted cash and cash equivalents
|
|
1,466,602
|
|
|
272,425
|
|
||
Property, plant and equipment, net
|
|
3,241,990
|
|
|
2,704,895
|
|
||
Debt issuance costs, net
|
|
245,804
|
|
|
220,949
|
|
||
Other
|
|
22,248
|
|
|
17,465
|
|
||
Total assets
|
|
$
|
5,709,531
|
|
|
$
|
3,748,278
|
|
LIABILITIES AND PARTNERS’ CAPITAL
|
|
|
|
|
||||
Current liabilities
|
|
|
|
|
||||
Accounts payable
|
|
$
|
19,947
|
|
|
$
|
73,760
|
|
Accounts payable—affiliate
|
|
—
|
|
|
1,122
|
|
||
Accrued liabilities
|
|
218,399
|
|
|
47,403
|
|
||
Accrued liabilities—affiliate
|
|
19,369
|
|
|
5,791
|
|
||
Deferred revenue
|
|
25,329
|
|
|
26,540
|
|
||
Deferred revenue—affiliate
|
|
—
|
|
|
696
|
|
||
Other
|
|
1,498
|
|
|
98
|
|
||
Total current liabilities
|
|
284,542
|
|
|
155,410
|
|
||
|
|
|
|
|
||||
Long-term debt, net of discount
|
|
3,668,286
|
|
|
2,167,113
|
|
||
Deferred revenue
|
|
20,500
|
|
|
21,500
|
|
||
Deferred revenue—affiliate
|
|
17,173
|
|
|
14,720
|
|
||
Long-term derivative liability
|
|
21,978
|
|
|
26,424
|
|
||
Other non-current liabilities
|
|
300
|
|
|
303
|
|
||
|
|
|
|
|
||||
Commitments and contingencies
|
|
|
|
|
|
|
||
|
|
|
|
|
||||
Partners' capital
|
|
|
|
|
||||
Common unitholders (57.1 million units and 39.5 million units issued and outstanding at March 31, 2013 and December 31, 2012, respectively)
|
|
786,138
|
|
|
448,412
|
|
||
Class B unitholders (133.3 million units issued and outstanding at March 31, 2013 and December 31, 2012)
|
|
(37,342
|
)
|
|
(37,342
|
)
|
||
Subordinated unitholders (135.4 million units issued and outstanding at March 31, 2013 and December 31, 2012)
|
|
918,775
|
|
|
949,482
|
|
||
General partner interest (2% interest with 6.6 million units and 6.3 million units issued and outstanding at March 31, 2013 and December 31, 2012, respectively)
|
|
35,154
|
|
|
29,496
|
|
||
Accumulated other comprehensive loss
|
|
(5,973
|
)
|
|
(27,240
|
)
|
||
Total partners’ capital
|
|
1,696,752
|
|
|
1,362,808
|
|
||
Total liabilities and partners’ capital
|
|
$
|
5,709,531
|
|
|
$
|
3,748,278
|
|
|
|
Three Months Ended
|
||||||
|
|
March 31,
|
||||||
|
|
2013
|
|
2012
|
||||
Revenues
|
|
|
|
|
||||
Revenues
|
|
$
|
65,563
|
|
|
$
|
66,958
|
|
Revenues—affiliate
|
|
511
|
|
|
2,365
|
|
||
Total revenues
|
|
66,074
|
|
|
69,323
|
|
||
|
|
|
|
|
||||
Expenses
|
|
|
|
|
|
|
||
Operating and maintenance expense
|
|
8,018
|
|
|
6,112
|
|
||
Operating and maintenance expense—affiliate
|
|
6,168
|
|
|
2,998
|
|
||
Depreciation expense
|
|
10,650
|
|
|
10,629
|
|
||
Development expense
|
|
3,484
|
|
|
16,669
|
|
||
Development expense—affiliate
|
|
451
|
|
|
1,231
|
|
||
General and administrative expense
|
|
3,231
|
|
|
1,681
|
|
||
General and administrative expense—affiliate
|
|
19,156
|
|
|
5,112
|
|
||
Total expenses
|
|
51,158
|
|
|
44,432
|
|
||
|
|
|
|
|
||||
Income from operations
|
|
14,916
|
|
|
24,891
|
|
||
|
|
|
|
|
||||
Other income (expense)
|
|
|
|
|
|
|
||
Interest expense, net
|
|
(40,262
|
)
|
|
(43,458
|
)
|
||
Derivative loss, net
|
|
(17,468
|
)
|
|
(836
|
)
|
||
Other
|
|
327
|
|
|
71
|
|
||
Total other expense
|
|
(57,403
|
)
|
|
(44,223
|
)
|
||
|
|
|
|
|
||||
Net loss
|
|
$
|
(42,487
|
)
|
|
$
|
(19,332
|
)
|
|
|
|
|
|
||||
Basic and diluted net income per common unit
|
|
$
|
0.10
|
|
|
$
|
0.23
|
|
|
|
|
|
|
||||
Weighted average number of common units outstanding used for basic and diluted net income per common unit calculation
|
|
45,547
|
|
|
31,017
|
|
|
|
Three Months Ended
|
||||||
|
|
March 31,
|
||||||
|
|
2013
|
|
2012
|
||||
Net loss
|
|
$
|
(42,487
|
)
|
|
$
|
(19,332
|
)
|
Other comprehensive income
|
|
|
|
|
||||
Interest rate cash flow hedges
|
|
|
|
|
||||
Loss on settlements retained in other comprehensive income
|
|
(30
|
)
|
|
—
|
|
||
Change in fair value of interest rate cash flow hedges
|
|
21,297
|
|
|
—
|
|
||
Total other comprehensive income
|
|
21,267
|
|
|
—
|
|
||
Comprehensive loss
|
|
$
|
(21,220
|
)
|
|
$
|
(19,332
|
)
|
|
Common Unitholders
|
|
Class B Unitholders
|
|
Subordinated Unitholders
|
|
General Partner Interest
|
|
Accumulated Other Comprehensive Loss
|
|
Total Partners' Capital
|
||||||||||||
Balance at December 31, 2012
|
$
|
448,412
|
|
|
$
|
(37,342
|
)
|
|
$
|
949,482
|
|
|
$
|
29,496
|
|
|
$
|
(27,240
|
)
|
|
$
|
1,362,808
|
|
Net loss
|
(10,331
|
)
|
|
—
|
|
|
(30,707
|
)
|
|
(1,449
|
)
|
|
—
|
|
|
(42,487
|
)
|
||||||
Sale of common and general partner units
|
364,840
|
|
|
—
|
|
|
—
|
|
|
7,449
|
|
|
—
|
|
|
372,289
|
|
||||||
Distributions
|
(16,783
|
)
|
|
—
|
|
|
—
|
|
|
(342
|
)
|
|
—
|
|
|
(17,125
|
)
|
||||||
Interest rate cash flow hedges
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21,267
|
|
|
21,267
|
|
||||||
Balance at March 31, 2013
|
$
|
786,138
|
|
|
$
|
(37,342
|
)
|
|
$
|
918,775
|
|
|
$
|
35,154
|
|
|
$
|
(5,973
|
)
|
|
$
|
1,696,752
|
|
|
|
Three Months Ended
|
||||||
|
|
March 31,
|
||||||
|
|
2013
|
|
2012
|
||||
Cash flows from operating activities
|
|
|
|
|
||||
Net loss
|
|
$
|
(42,487
|
)
|
|
$
|
(19,332
|
)
|
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
|
|
|
|
|
||||
Depreciation
|
|
10,650
|
|
|
10,629
|
|
||
Investment in restricted cash and cash equivalents
|
|
(27,542
|
)
|
|
(41,197
|
)
|
||
Amortization of debt discount
|
|
1,174
|
|
|
1,174
|
|
||
Amortization of debt issuance costs
|
|
1,036
|
|
|
1,092
|
|
||
Non-cash derivative loss
|
|
18,118
|
|
|
527
|
|
||
Other
|
|
3,064
|
|
|
—
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
||||
Accounts and interest receivable
|
|
(126
|
)
|
|
504
|
|
||
Accounts receivable—affiliate
|
|
909
|
|
|
(2,350
|
)
|
||
Accounts payable and accrued liabilities
|
|
41,494
|
|
|
45,966
|
|
||
Accounts payable and accrued liabilities—affiliate
|
|
6,882
|
|
|
171
|
|
||
Deferred revenue—affiliate
|
|
(695
|
)
|
|
—
|
|
||
Deferred revenue
|
|
(2,210
|
)
|
|
(1,104
|
)
|
||
Advances to affiliate
|
|
(4,552
|
)
|
|
(5,330
|
)
|
||
LNG inventory—affiliate
|
|
1,972
|
|
|
2,652
|
|
||
Other
|
|
29
|
|
|
(3,289
|
)
|
||
Net cash provided by (used in) operating activities
|
|
7,716
|
|
|
(9,887
|
)
|
||
|
|
|
|
|
||||
Cash flows from investing activities
|
|
|
|
|
|
|
||
Use of restricted cash and cash equivalents
|
|
463,476
|
|
|
—
|
|
||
LNG terminal costs, net
|
|
(462,731
|
)
|
|
(414
|
)
|
||
Other
|
|
(790
|
)
|
|
(1,128
|
)
|
||
Net cash used in investing activities
|
|
(45
|
)
|
|
(1,542
|
)
|
||
|
|
|
|
|
||||
Cash flows from financing activities
|
|
|
|
|
|
|
||
Proceeds from 2021 Sabine Pass Liquefaction Notes
|
|
1,500,000
|
|
|
—
|
|
||
Proceeds from sale of partnership units
|
|
372,449
|
|
|
2,903
|
|
||
Investment in restricted cash and cash equivalents
|
|
(1,790,446
|
)
|
|
—
|
|
||
Debt issuance and deferred financing costs
|
|
(34,986
|
)
|
|
—
|
|
||
Distributions to owners
|
|
(17,125
|
)
|
|
(13,445
|
)
|
||
Other
|
|
(3
|
)
|
|
—
|
|
||
Net cash provided by (used in) financing activities
|
|
29,889
|
|
|
(10,542
|
)
|
||
|
|
|
|
|
||||
Net increase (decrease) in cash and cash equivalents
|
|
37,560
|
|
|
(21,971
|
)
|
||
Cash and cash equivalents—beginning of period
|
|
419,292
|
|
|
81,415
|
|
||
Cash and cash equivalents—end of period
|
|
$
|
456,852
|
|
|
$
|
59,444
|
|
|
|
March 31,
|
|
December 31,
|
||||
|
|
2013
|
|
2012
|
||||
LNG terminal costs
|
|
|
|
|
||||
LNG terminal
|
|
$
|
1,641,717
|
|
|
$
|
1,641,722
|
|
LNG terminal construction-in-process
|
|
1,776,308
|
|
|
1,228,647
|
|
||
LNG site and related costs, net
|
|
154
|
|
|
156
|
|
||
Accumulated depreciation
|
|
(177,084
|
)
|
|
(166,538
|
)
|
||
Total LNG terminal costs, net
|
|
3,241,095
|
|
|
2,703,987
|
|
||
|
|
|
|
|
||||
Fixed assets
|
|
|
|
|
|
|
||
Computer and office equipment
|
|
424
|
|
|
368
|
|
||
Vehicles
|
|
797
|
|
|
704
|
|
||
Machinery and equipment
|
|
1,471
|
|
|
1,473
|
|
||
Other
|
|
703
|
|
|
760
|
|
||
Accumulated depreciation
|
|
(2,500
|
)
|
|
(2,397
|
)
|
||
Total fixed assets, net
|
|
895
|
|
|
908
|
|
||
|
|
|
|
|
||||
Property, plant and equipment, net
|
|
$
|
3,241,990
|
|
|
$
|
2,704,895
|
|
|
Fair Value Measurements as of
|
||||||||||||||||||||||||||||||
|
March 31, 2013
|
|
December 31, 2012
|
||||||||||||||||||||||||||||
|
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
|
||||||||||||||||
LNG Inventory Derivatives asset (liability)
|
$
|
—
|
|
|
$
|
(421
|
)
|
|
$
|
—
|
|
|
$
|
(421
|
)
|
|
$
|
—
|
|
|
$
|
232
|
|
|
$
|
—
|
|
|
$
|
232
|
|
Fuel Derivatives asset (liability)
|
—
|
|
|
420
|
|
|
—
|
|
|
420
|
|
|
—
|
|
|
(98
|
)
|
|
—
|
|
|
(98
|
)
|
||||||||
Interest Rate Derivatives (liability)
|
—
|
|
|
(23,055
|
)
|
|
—
|
|
|
(23,055
|
)
|
|
—
|
|
|
(26,424
|
)
|
|
—
|
|
|
(26,424
|
)
|
|
|
|
|
Fair Value Measurements as of
|
||||||
|
Balance Sheet Location
|
|
March 31, 2013
|
|
December 31, 2012
|
|||||
LNG Inventory Derivatives asset (liability)
|
Prepaid expenses and other/ (Other current liabilities)
|
|
$
|
(421
|
)
|
|
$
|
232
|
|
|
Fuel Derivatives asset (liability)
|
Prepaid expenses and other/ (Other current liabilities)
|
|
420
|
|
|
(98
|
)
|
|
Three Months Ended March 31,
|
||||||
|
2013
|
|
2012
|
||||
LNG Inventory Derivatives gain (loss)
|
$
|
(550
|
)
|
|
$
|
1,171
|
|
|
Three Months Ended March 31,
|
||||||
|
2013
|
|
2012
|
||||
Fuel Derivatives gain (loss)
|
$
|
515
|
|
|
$
|
(836
|
)
|
|
|
Initial Notional Amount
|
|
Maximum Notional Amount
|
|
Effective Date
|
|
Maturity Date
|
|
Weighted Average Fixed Interest Rate Paid
|
|
Variable Interest Rate Received
|
Interest Rate Derivatives - De-designated
|
|
$20.0 million
|
|
$2.9 billion
|
|
August 14, 2012
|
|
July 31, 2019
|
|
1.98%
|
|
One-month LIBOR
|
|
|
|
|
Fair Value Measurements as of
|
||||||
|
|
Balance Sheet Location
|
|
March 31, 2013
|
|
December 31, 2012
|
||||
Interest Rate Derivatives - Designated
|
|
Non-current derivative liabilities
|
|
$
|
—
|
|
|
$
|
21,290
|
|
Interest Rate Derivatives - De-designated
|
|
Other current liabilities
|
|
1,077
|
|
|
—
|
|
||
Interest Rate Derivatives - De-designated
|
|
Non-current derivative liabilities
|
|
21,978
|
|
|
5,134
|
|
|
Gain (Loss) in Other Comprehensive Income
|
|
Gain (Loss) Reclassified from Accumulated OCI into Interest Expense (Effective Portion)
|
|
Gain (Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
|
||||||||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||||||
Interest Rate Derivatives - Designated
|
$
|
21,297
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest Rate Derivatives - De-designated
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Interest Rate Derivatives - Settlements
|
(30
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Three Months Ended March 31,
|
||||||
|
2013
|
|
2012
|
||||
Interest Rate Derivatives - De-designated loss
|
$
|
17,983
|
|
|
$
|
—
|
|
|
|
Gross Amounts Recognized
|
|
Gross Amounts Offset in the Consolidated Balance Sheet
|
|
Net Amounts Presented in the Consolidated Balance Sheet
|
|
Gross Amounts Not Offset in the Consolidated Balance Sheet
|
|
|
||||||||||||||
Offsetting Derivative Assets (Liabilities)
|
|
|
|
|
Derivative Instrument
|
|
Cash Collateral Received (Paid)
|
|
Net Amount
|
|||||||||||||||
As of March 31, 2013:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fuel Derivatives
|
|
$
|
420
|
|
|
$
|
—
|
|
|
$
|
420
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
420
|
|
LNG Inventory Derivatives
|
|
(421
|
)
|
|
(421
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Interest Rate Derivatives - de-designated
|
|
(23,055
|
)
|
|
—
|
|
|
(23,055
|
)
|
|
—
|
|
|
—
|
|
|
(23,055
|
)
|
||||||
As of December 31, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fuel Derivatives
|
|
(98
|
)
|
|
(98
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
LNG Inventory Derivatives
|
|
232
|
|
|
—
|
|
|
232
|
|
|
—
|
|
|
—
|
|
|
232
|
|
||||||
Interest Rate Derivatives - designated
|
|
(21,290
|
)
|
|
—
|
|
|
(21,290
|
)
|
|
—
|
|
|
—
|
|
|
(21,290
|
)
|
||||||
Interest Rate Derivatives - de-designated
|
|
(5,134
|
)
|
|
—
|
|
|
(5,134
|
)
|
|
—
|
|
|
—
|
|
|
(5,134
|
)
|
|
|
March 31, 2013
|
|
December 31, 2012
|
||||||||||||
|
|
Carrying
Amount
|
|
Estimated
Fair Value
|
|
Carrying
Amount
|
|
Estimated
Fair Value
|
||||||||
2016 Notes, net of discount (1)
|
|
$
|
1,648,286
|
|
|
$
|
1,825,477
|
|
|
$
|
1,647,113
|
|
|
$
|
1,824,177
|
|
2020 Notes (1)
|
|
420,000
|
|
|
444,150
|
|
|
420,000
|
|
|
437,850
|
|
||||
2021 Sabine Pass Liquefaction Notes (1)
|
|
1,500,000
|
|
|
1,552,500
|
|
|
—
|
|
|
—
|
|
||||
Liquefaction Credit Facility (2)
|
|
100,000
|
|
|
100,000
|
|
|
100,000
|
|
|
100,000
|
|
|
(1)
|
The Level 2 estimated fair value was based on quotations obtained from broker-dealers who make markets in these and similar instruments based on the closing trading prices on
March 31, 2013
and
December 31, 2012
, as applicable.
|
(2)
|
The Level 3 estimated fair value was determined to be the carrying amount due to our ability to call this debt at anytime without penalty.
|
|
|
March 31,
|
|
December 31,
|
||||
|
|
2013
|
|
2012
|
||||
Interest and related debt fees
|
|
$
|
68,422
|
|
|
$
|
16,327
|
|
Affiliate
|
|
19,369
|
|
|
5,791
|
|
||
LNG liquefaction costs
|
|
143,628
|
|
|
26,131
|
|
||
LNG terminal costs
|
|
2,756
|
|
|
977
|
|
||
Other
|
|
3,593
|
|
|
3,968
|
|
||
Total accrued liabilities (including affiliate)
|
|
$
|
237,768
|
|
|
$
|
53,194
|
|
|
|
March 31,
|
|
December 31,
|
||||
|
|
2013
|
|
2012
|
||||
Long-term debt
|
|
|
|
|
||||
2016 Notes
|
|
$
|
1,665,500
|
|
|
$
|
1,665,500
|
|
2020 Notes
|
|
420,000
|
|
|
420,000
|
|
||
2021 Sabine Pass Liquefaction Notes
|
|
1,500,000
|
|
|
—
|
|
||
Liquefaction Credit Facility
|
|
100,000
|
|
|
100,000
|
|
||
Total long-term debt
|
|
3,685,500
|
|
|
2,185,500
|
|
||
Long-term debt discount
|
|
|
|
|
||||
2016 Notes
|
|
(17,214
|
)
|
|
(18,387
|
)
|
||
Total long-term debt, net of discount
|
|
$
|
3,668,286
|
|
|
$
|
2,167,113
|
|
•
|
the excess of: a) the present value at such redemption date of (i) the redemption price of the
2016 Notes
plus (ii) all required interest payments due on the
2016 Notes
(excluding accrued but unpaid interest to the redemption date), computed using a discount rate equal to the Treasury Rate as of such redemption date plus
50
basis points; over b) the principal amount of the
2016 Notes
, if greater.
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2013
|
|
2012
|
||||
LNG terminal costs funded with accounts payable and accrued liabilities (including affiliate)
|
|
$
|
176,488
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
Total Distribution (in thousands)
|
||||||||||||||||
Date Paid
|
|
Period Covered by Distribution
|
|
Distribution Per Common Unit
|
|
Distribution Per Subordinated Unit
|
|
Common Units
|
|
Class B Units
|
|
Subordinated Units
|
|
General Partner Units
|
||||||||||
February 14, 2013
|
|
October 1 - December 31, 2012
|
|
$
|
0.425
|
|
|
$
|
—
|
|
|
$
|
16,783
|
|
|
—
|
|
|
—
|
|
|
$
|
342
|
|
|
|
|
|
Limited Partner Units
|
|
|
||||||||||||||
|
|
Total
|
|
Common Units
|
|
Class B Units
|
|
Subordinated Units
|
|
General Partner
|
||||||||||
Three Months Ended March 31, 2013
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net loss
|
|
$
|
(42,487
|
)
|
|
|
|
|
|
|
|
|
||||||||
Declared distributions
|
|
24,754
|
|
|
24,259
|
|
|
—
|
|
|
—
|
|
|
495
|
|
|||||
Assumed allocation of undistributed net loss
|
|
(67,241
|
)
|
|
(19,543
|
)
|
|
—
|
|
|
(46,353
|
)
|
|
(1,345
|
)
|
|||||
Assumed allocation of net income (loss)
|
|
|
|
$
|
4,716
|
|
|
$
|
—
|
|
|
$
|
(46,353
|
)
|
|
$
|
(850
|
)
|
||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted average units outstanding
|
|
|
|
45,547
|
|
|
133,333
|
|
|
135,384
|
|
|
|
|||||||
Net income (loss) per unit
|
|
|
|
$
|
0.10
|
|
|
$
|
—
|
|
|
$
|
(0.34
|
)
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Three Months Ended March 31, 2012
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net loss
|
|
$
|
(19,332
|
)
|
|
|
|
|
|
|
|
|
||||||||
Declared distributions
|
|
13,499
|
|
|
13,229
|
|
|
—
|
|
|
—
|
|
|
270
|
|
|||||
Assumed allocation of undistributed net loss
|
|
(32,831
|
)
|
|
(6,015
|
)
|
|
—
|
|
|
(26,160
|
)
|
|
(656
|
)
|
|||||
Assumed allocation of net income (loss)
|
|
|
|
$
|
7,214
|
|
|
$
|
—
|
|
|
$
|
(26,160
|
)
|
|
$
|
(386
|
)
|
||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted average units outstanding
|
|
|
|
31,017
|
|
|
—
|
|
|
135,384
|
|
|
|
|||||||
Net income (loss) per unit
|
|
|
|
$
|
0.23
|
|
|
$
|
—
|
|
|
$
|
(0.19
|
)
|
|
|
•
|
statements regarding our ability to pay distributions to our unitholders;
|
•
|
statements regarding our expected receipt of cash distributions from Sabine Pass LNG, L.P. ("Sabine Pass LNG") or Sabine Pass Liquefaction, LLC ("Sabine Pass Liquefaction");
|
•
|
s
tatements regarding future levels of domestic and international natural gas production, supply or consumption or future levels of liquefied natural gas ("LNG") imports into or exports from North America and other countries worldwide, regardless of the source of such information, or the transportation or demand for and prices related to natural gas, LNG or other hydrocarbon products
;
|
•
|
statements regarding any financing transactions or arrangements, or ability to enter into such transactions;
|
•
|
statements relating to the construction of our natural gas liquefaction trains ("Trains"), including statements concerning the engagement of any engineering, procurement and construction ("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 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, 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 construction of additional Trains, including the financing of such Trains;
|
•
|
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 and capital expenditures, any or all of which are subject to change;
|
•
|
statements regarding legislative, governmental, regulatory, administrative or other public body actions, requirements, permits, investigations, proceedings or decisions;
|
•
|
statements regarding our anticipated LNG and natural gas marketing activities; and
|
•
|
any other statements that relate to non-historica
l 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 Policies and Estimates
|
•
|
Recent Accounting Standards
|
•
|
In February 2013, Sabine Pass Liquefaction issued an aggregate principal amount of $1.5 billion of 5.625% Senior Secured Notes due 2021 (the "2021 Sabine Pass Liquefaction Notes"). In April 2013, Sabine Pass Liquefaction issued an additional aggregate principal amount of $500.0 million of the 2021 Sabine Pass Liquefaction Notes for an aggregate principal amount of $2.0 billion. In April 2013, Sabine Pass Liquefaction also issued $1.0 billion of 5.625% Senior Secured Notes due 2023 (the "2023 Sabine Pass Liquefaction Notes"). Net proceeds from these offerings are intended to be used to pay capital costs incurred in connection with the construction of Train 1 and Train 2 of the Liquefaction Project in lieu of a portion of the commitments under the Liquefaction Credit Facility described below;
|
•
|
We entered into a purchase agreement with institutional investors to sell 17.6 million common units for net proceeds, after deducting expenses, of $372.4 million, which includes the general partner's proportionate capital contribution of approximately $7.4 million. We intend to use the proceeds from this offering for costs associated with the Liquefaction Project; and
|
•
|
Sabine Pass Liquefaction entered into an LNG sale and purchase agreement ("SPA") with Centrica plc that commences upon the date of first commercial delivery for Train 5 and includes an annual contract quantity of 91.25 million MMBtu of LNG and a fixed fee of $3.00 per MMBtu, equating to expected annual contracted cash flow from fixed fees of $274 million.
|
•
|
Total Gas & Power North America, Inc. ("Total") has reserved approximately 1.0 Bcf/d of regasification capacity and is obligated to make monthly capacity payments to Sabine Pass LNG aggregating approximately $125 million per year for 20 years that commenced April 1, 2009. Total, S.A. has guaranteed Total’s obligations under its TUA up to $2.5 billion, subject to certain exceptions; and
|
•
|
Chevron U.S.A. Inc. ("Chevron") has reserved approximately 1.0 Bcf/d of regasification capacity and is obligated to make monthly capacity payments to Sabine Pass LNG aggregating approximately $125 million per year for 20 years that commenced July 1, 2009. Chevron Corporation has guaranteed Chevron’s obligations under its TUA up to 80% of the fees payable by Chevron.
|
•
|
BG Gulf Coast LNG, LLC ("BG") SPA commences upon the date of first commercial delivery for Train 1 and includes an annual contract quantity of 182,500,000 MMBtu of LNG and a fixed fee of $2.25 per MMBtu and includes additional annual contract quantities of 36,500,000 MMBtu, 34,000,000 MMBtu, and 33,500,000 MMBtu upon the date of first commercial delivery for Train 2, Train 3 and Train 4, respectively, with a fixed fee of $3.00 per MMBtu. The total expected annual contracted cash flow from BG from the fixed fee component is $723 million. In addition, Sabine Pass Liquefaction has agreed to make LNG available to BG
to the extent that Train 1 becomes commercially operable prior to the beginning of the first delivery window. The obligations of BG are guaranteed by BG Energy Holdings Limited, a company organized under the laws of England and Wales, with a credit rating of A/A2.
|
•
|
Gas Natural Aprovisionamientos SDG S.A. ("Gas Natural Fenosa"), an affiliate of Gas Natural SDG, S.A., SPA commences upon the date of first commercial delivery for Train 2 and includes an annual contract quantity of 182,500,000 MMBtu of LNG and a fixed fee of $2.49 per MMBtu, equating to expected annual contracted cash flow from the fixed fee component of $454 million. In addition, we have agreed to make LNG available to Gas Natural Fenosa to the extent that Train 2 becomes commercially operable prior to the beginning of the first delivery window. The obligations of Gas Natural Fenosa are guaranteed by Gas Natural SDG S.A., a company organized under the laws of Spain, with a credit rating of BBB/Baa2.
|
•
|
Korea Gas Corporation ("KOGAS")
SPA commences upon the date of first commercial delivery for Train 3 and includes an annual contract quantity of 182,500,000 MMBtu of LNG and a fixed fee of $3.00 per MMBtu, equating to expected annual contracted cash flow from fixed fees of $548 million. KOGAS is organized under the laws of the Republic of Korea, with a credit rating of A/A1.
|
•
|
GAIL (India) Limited ("
GAIL") SPA commences upon the date of first commercial delivery for Train 4 and includes an annual contract quantity of 182,500,000 MMBtu of LNG and a fixed fee of $3.00 per MMBtu, equating to expected annual contracted cash flow from fixed fees of $548 million. GAIL is organized under the laws of India, with a credit rating of NR/Baa2/BBB-.
|
•
|
Total,
an affiliate of Total S.A., SPA commences upon the date of first commercial delivery for Train 5 and includes an annual contract quantity of 104,750,000 MMBtu of LNG and a fixed fee of $3.00 per MMBtu, equating to expected annual contracted cash flow from fixed fees of $314 million. The obligations of Total are guaranteed by Total S.A., a company orga
nized under the laws of France, with a credit rating of AA/Aa1.
|
•
|
Centrica plc ("Centrica") SPA commences upon the date of first commercial delivery for Train 5 and includes an annual contract quantity of 91,250,000 MMBtu of LNG and a fixed fee of $3.00 per MMBtu, equating to expected annual contracted cash flow from fixed fees of $274 million. Centrica is registered in England and Wales, with a credit rating o
f A-/A3/A.
|
•
|
Tranche
1
: up to $200 million;
|
•
|
Tranche 2
: up to $150 million;
|
•
|
Tranche 3
: up to $150 million; and
|
•
|
Tranche 4
: up to $3.126 billion.
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2013
|
|
2012
|
||||
Sources of cash and cash equivalents
|
|
|
|
|
||||
Proceeds from 2021 Sabine Pass Liquefaction Notes
|
|
$
|
1,500,000
|
|
|
$
|
—
|
|
Proceeds from sale of partnership common and general partner units
|
|
372,449
|
|
|
2,903
|
|
||
Operating cash flow
|
|
7,716
|
|
|
—
|
|
||
Total sources of cash and cash equivalents
|
|
1,880,165
|
|
|
2,903
|
|
||
|
|
|
|
|
||||
Uses of cash and cash equivalents
|
|
|
|
|
||||
Investment in restricted cash and cash equivalents
|
|
(1,326,970
|
)
|
|
—
|
|
||
LNG terminal costs, net
|
|
(462,731
|
)
|
|
(414
|
)
|
||
Debt issuance and deferred financing costs
|
|
(34,986
|
)
|
|
—
|
|
||
Distributions to unitholders
|
|
(17,125
|
)
|
|
(13,445
|
)
|
||
Operating cash flow
|
|
—
|
|
|
(9,887
|
)
|
||
Other
|
|
(793
|
)
|
|
(1,128
|
)
|
||
Total uses of cash and cash equivalents
|
|
(1,842,605
|
)
|
|
(24,874
|
)
|
||
|
|
|
|
|
||||
Net increase (decrease) in cash and cash equivalents
|
|
37,560
|
|
|
(21,971
|
)
|
||
Cash and cash equivalents—beginning of period
|
|
419,292
|
|
|
81,415
|
|
||
Cash and cash equivalents—end of period
|
|
$
|
456,852
|
|
|
$
|
59,444
|
|
|
|
|
|
|
|
|
|
Total Distribution (in thousands)
|
||||||||||||||||
Date Paid
|
|
Period Covered by Distribution
|
|
Distribution Per Common Unit
|
|
Distribution Per Subordinated Unit
|
|
Common Units
|
|
Class B Units
|
|
Subordinated Units
|
|
General Partner Units
|
||||||||||
February 14, 2013
|
|
October 1 - December 31, 2012
|
|
$
|
0.425
|
|
|
$
|
—
|
|
|
$
|
16,783
|
|
|
—
|
|
|
—
|
|
|
$
|
342
|
|
Hedge Description
|
|
Hedge Instrument
|
|
Contract Volume (MMBtu)
|
|
Price Range ($/MMBtu)
|
|
Final Hedge Maturity Date
|
|
Fair Value (in thousands)
|
|
VaR (in thousands)
|
|||||
LNG Inventory Derivatives
|
|
Fixed price natural gas swaps
|
|
797,500
|
|
|
$3.372 - $3.895
|
|
June 2013
|
|
$
|
(421
|
)
|
|
$
|
5
|
|
Fuel Derivatives
|
|
Fixed price natural gas swaps
|
|
1,095,000
|
|
|
$4.024 - $4.421
|
|
April 2014
|
|
420
|
|
|
5
|
|
Hedge Description
|
|
Hedge Instrument
|
|
Initial Notional Amount
|
|
Maximum Notional Amount
|
|
Fixed Interest Rate Range (%)
|
|
Final Hedge Maturity Date
|
|
Fair Value (in thousands)
|
|
10% Change in LIBOR (in thousands)
|
||||
Interest Rate Derivatives
|
|
Interest rate swaps
|
|
$20.0 million
|
|
$2.9 billion
|
|
1.978 - 1.981
|
|
July 2019
|
|
$
|
(23,055
|
)
|
|
$
|
19,506
|
|
Exhibit No.
|
|
Description
|
10.1*
|
|
Amendment No. 1 of LNG Sale and Purchase Agreement (FOB), dated April 3, 2013, between Sabine Pass Liquefaction, LLC (Seller) and Gas Natural Aprovisionamientos SDG S.A. (Buyer)
|
|
|
|
10.2*
|
|
Change orders to the Lump Sum Turnkey Agreement for the Engineering, Procurement and Construction of the Sabine Pass LNG Liquefaction Facility, dated as of November 11, 2011, between Sabine Pass Liquefaction, LLC and Bechtel Oil, Gas and Chemicals, Inc.: (i) the Change Order CO-0019 Delete Tank 6 Scope of Work, dated February 28, 2013 and (ii) the Change Order CO-0020 Modification to Builder's Risk Insurance Sum Insured Value, dated March 14, 2013. (Portions of this exhibit have been omitted and filed separately with the SEC pursuant to a request for confidential treatment.)
|
|
|
|
31.1*
|
|
Certification by Chief Executive Officer required by Rule 13a-14(a) and 15d-14(a) under the Exchange Act
|
|
|
|
31.2*
|
|
Certification by Chief Financial Officer required by Rule 13a-14(a) and 15d-14(a) under the Exchange Act
|
|
|
|
32.1**
|
|
Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
32.2**
|
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
101.INS+
|
|
XBRL Instance Document
|
|
|
|
101.SCH+
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL+
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF+
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.LAB+
|
|
XBRL Taxonomy Extension Labels Linkbase Document
|
|
|
|
101.PRE+
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
|
*
|
Filed herewith
|
|
|
**
|
Furnished herewith.
|
|
|
+
|
Pursuant to Rule 406T of Regulation S-T, the interactive data files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.
|
CHENIERE ENERGY PARTNERS, L.P.
|
||
By:
|
Cheniere Energy Partners GP, LLC,
its general partner
|
|
|
|
|
By:
|
/s/ JERRY D. SMITH
|
|
|
Jerry D. Smith
|
|
|
Chief Accounting Officer
|
|
|
(on behalf of the registrant and as principal accounting officer)
|
|
Date:
|
May 3, 2013
|
|
(A)
|
Seller and Buyer are parties to that certain LNG Sale and Purchase Agreement dated as of November 21, 2011 ("
Agreement"
); and
|
(B)
|
Seller and Buyer desire to amend the Agreement to establish rights and obligations of each Party in respect of certain cargoes of LNG for delivery prior to the Date of First Commercial Delivery.
|
2.
|
Amendments
|
2.1.
|
Section 1.1 of the Agreement is amended by deleting in its entirety the definition of "Delivery Window", and the following definition is inserted in lieu thereof:
|
Delivery Window:
|
a twenty-four (24) hour period starting at 6:00 a.m. on a specified Day and ending twenty-four (24) consecutive hours thereafter that is allocated to Buyer under the ADP or Ninety Day Schedule or as identified in a notice from Seller to Buyer pursuant to Section 4.5.2 or 4.5.3, as applicable;
|
2.2.
|
Section 1.1 of the Agreement is further amended by deleting in its entirety the definition of "Designated Train", and the following definition is inserted in lieu thereof:
|
Designated Train:
|
with respect to the two LNG production trains to be constructed at the Sabine Liquefaction Facility pursuant to the Lump Sum Turnkey Agreement for the
|
2.3.
|
Section 1.1 of the Agreement is further amended by the addition of the following new definition:
|
2.4.
|
Section 1.1 of the Agreement is further amended by deleting in its entirety the definition of "Scheduled Cargo Quantity", and the following definition is inserted in lieu thereof:
|
Scheduled Cargo Quantity:
|
the quantity of LNG (in MMBtus) identified in the ADP or Ninety Day Schedule to be loaded onto an LNG Tanker in a Delivery Window in accordance with Section 8 or as provided pursuant to Section 4.5.2 or 4.5.3, as applicable;
|
2.5.
|
Each of Sections 4.3.2, 4.3.3, 4.3.4, and 4.3.5 of the Agreement is deleted in its entirety, and in each such Section, the words "Intentionally omitted." are inserted in lieu thereof.
|
2.6.
|
A new Section 4.5 is added to the Agreement as follows:
|
4.5.1
|
If and to the extent Seller determines, acting reasonably (taking into account the uncertainty of producing and delivering any cargo prior to the Date of First Commercial Delivery), that the Designated Train is capable of producing LNG complying with the Specifications prior to the start of the First Contract Year ("
Pre-commercial LNG"
), then Seller shall offer to Buyer (a) the first two hundred eighty-five thousand (285,000) MMBtu per Day of Pre-commercial LNG produced by the Designated Train on any Day that is on or prior to the last Day of the Final Window Period, and (b) the first five hundred thousand (500,000) MMBtu per Day of Pre-commercial LNG produced by the Designated Train on any Day that is after the last Day of the Final Window Period;
provided
|
4.5.2
|
If Seller offers a Pre-commercial LNG cargo to Buyer and such offer indicates a Delivery Window in respect of such Pre-commercial LNG cargo that is at least sixty (60) Days from the date of such Seller's offer, then:
|
(a)
|
Buyer may reject such offer within five (5) Days after receipt of Seller's offer, in which case (A) Buyer will pay to Seller in accordance with Section 10.2.5 an amount equal to USD two decimal forty-nine (USD 2.49) per MMBtu
multiplied by
the quantity (in MMBtu) rejected by Buyer and (B) neither Buyer nor Seller shall have any further liability to the other Party with respect to such Pre-commercial LNG cargo; or
|
(b)
|
Buyer may accept such offer, in which case, Buyer shall purchase and take (subject to Buyer's Cancellation Right), and Seller shall sell and make available, such Pre-commercial LNG cargo during such Delivery Window and otherwise in accordance with the terms of this Agreement (provided that (A) the price to be paid by Buyer for such Pre-commercial LNG cargo, including in the event Buyer exercises its Cancellation Right in respect of such cargo, shall be as set forth in Section 4.5.4 and (B) the Scheduled Cargo Quantity for such Pre-commercial LNG cargo shall be the quantity identified in Buyer's acceptance of such offer subject to such quantity being no less than three million one hundred thousand (3,100,000) MMBtus and no greater than three million seven hundred fifty thousand (3,750,000) MMBtus).
|
4.5.3
|
If Buyer receives an offer for a Pre-commercial LNG cargo from Seller less than sixty (60) Days prior to the proposed Delivery Window for such cargo, Buyer shall use reasonable efforts (taking into account, among other things, the availability of shipping capacity within Buyer's shipping fleet) to accept such offer and shall, not later than five (5) Days after receipt of such Seller's offer, provide Seller with notice as to whether Buyer is able, using such reasonable efforts, to accept such offer. If Buyer accepts such offer, then Buyer shall purchase and take (subject to Buyer's Cancellation Right), and Seller shall sell and make available, such Pre-commercial LNG cargo during the Delivery Window
|
4.5.4
|
The price in respect of any Pre-commercial LNG cargo purchased by Buyer pursuant to Section 4.5.2(b) or Section 4.5.3 shall be an amount in USD per MMBtu equal to the sum of (i) one decimal fifteen (1.15)
multiplied by
HH,
plus
(ii) USD two decimal forty-nine (USD 2.49). With respect to any Pre-commercial LNG cargo in relation to which (A) Buyer has accepted the relevant offer pursuant to Section 4.5.2(b) or Section 4.5.3, and (B) Buyer has exercised its Cancellation Right with respect to such Pre-commercial LNG cargo: (1) Buyer will pay to Seller in accordance with Section 10.2.5 an amount equal to USD two decimal forty-nine (USD 2.49) per MMBtu
multiplied by
the quantity identified in Seller's offer for such Pre-commercial LNG cargo and (2) neither Buyer nor Seller shall have any further liability to the other Party with respect to such Pre-commercial LNG cargo.
|
4.5.5
|
Upon the occurrence of the Date of First Commercial Delivery, Seller shall no longer be obligated to offer Pre-commercial LNG to Buyer. The provisions of Section 9 shall not apply with respect to Pre-commercial LNG cargoes.
|
2.7.
|
Section 5.6.1 of the Agreement is deleted in its entirety, and the following Section 5.6.1 is inserted in lieu thereof:
|
5.6.1
|
Buyer may cancel all or any portion of the Scheduled Cargo Quantity of any cargo(es) scheduled in any ADP (or any Pre-commercial LNG cargo) ("
Cancellation Right"
) only if Buyer issues a notice of cancellation to Seller on or prior to the Cancellation Deadline for the applicable cargoes.
|
2.8.
|
Section 9.3 of the Agreement is amended by deleting the words "per MMBtu".
|
2.9.
|
All provisions of the Agreement not specifically amended hereby shall remain in full force and effect.
|
3.
|
Miscellaneous
|
3.1.
|
Dispute Resolution; Immunity
. The provisions of Section 21.1 (Dispute Resolution) and Section 21.4 (Immunity) of the Agreement shall apply in this Amendment as if incorporated herein
mutatis mutandis
on the basis that references therein to the Agreement are to this Amendment.
|
3.2.
|
Governing Law
. This Amendment shall be governed by and construed in accordance with the laws of the State of New York (United States of America) without regard to principles of conflict of laws that would specify the use of other laws.
|
3.3.
|
Entire Agreement
. The Agreement, as amended by this Amendment, constitutes the entire agreement between the Parties and includes all promises and representations, express or implied, and supersedes all other prior agreements and representations, written or oral, between the Parties relating to the subject matter thereof.
|
3.4.
|
Amendments and Waiver
. This Amendment may not be supplemented, amended, modified or changed except by an instrument in writing signed by Seller and Buyer and expressed to be a supplement, amendment, modification or change to the Agreement. A Party shall not be deemed to have waived any right or remedy under this Amendment by reason of such Party's failure to enforce such right or remedy.
|
3.5.
|
Counterparts
. This Amendment may be executed in two counterparts and each such counterpart shall be deemed an original Amendment for all purposes, provided that neither Party shall be bound to this Amendment unless and until both Parties have executed a counterpart.
|
SELLER:
|
|
BUYER:
|
|
|
|
SABINE PASS LIQUEFACTION, LLC
|
|
GAS NATURAL APROVISIONAMIENTOS
|
|
|
SDG S.A.
|
|
|
|
/s/ H.D. Thames
|
|
/s/ José Ma. Egea Krauel
|
Name: H. Davis Thames
|
|
Name: Jos
é
Ma. Egea Krauel
|
Title: Executive Vice President
|
|
Title: Managing Director of Energy Planning
|
PROJECT NAME:
Sabine Pass LNG Liquefaction Facility
OWNER:
Sabine Pass Liquefaction, LLC
CONTRACTOR:
Bechtel Oil, Gas and Chemicals, Inc.
DATE OF AGREEMENT: November 11, 2011
|
CHANGE ORDER NUMBER:
CO-00019
DATE OF CHANGE ORDER:
February 27, 2013
|
1.
|
Per Article 6.1.B of the Agreement, Parties agree Bechtel will eliminate any scope with regards to Tank 106 installation.
|
a.
|
The scope of work details which will remain despite the deletion include:
|
i.
|
Soil stabilization inside Tank 6 is to be at a 3 foot depth, including the area/volume under the dikes.
|
ii.
|
Soil improvement to include 5 feet stabilization depth at south pipe rack.
|
iii.
|
Add fill, grade, and drain.
|
iv.
|
Fencing modification needed to protect south pipe rack (21R02) due to Tank 106 deletion.
|
b.
|
Clarifications and Exclusions:
|
i.
|
The design of the BOG system remains unchanged. The capacity associated with LNG Tank S-106, 8% of 48,400 lb/hr (27 MMscfd), will be retained as margin for the BOG system.
|
2.
|
Per Article 6.1.B of the Agreement, Parties agree Bechtel will provide calibration of Ultrasonic meters and engineering support/design modifications.
|
a.
|
The scope of work includes:
|
i.
|
Calibrating the USM with the meter tubes.
|
ii.
|
Provide meter assembly per AGA standard configuration. Per AGA 9 on the uni-directional meter, there is to be 10 diameters from the meter inlet to the flow conditioner; 10 diameters from the flow conditioner to the meter body; and 5 diameters from the meter body to the first disturbance.
|
iii.
|
Calibration to be conducted at CEESI or TransCanada
|
b.
|
Clarifications:
|
i.
|
The meter shall be calibrated as an "artifact" with upstream/downstream piping, flow conditioners, transducers, and tees in place.
|
ii.
|
Piecewise linearization as the calibration method.
|
iii.
|
Log files to be collected throughout the process.
|
iv.
|
Tests at flow points of 2, 5, 10, 25, 40, 55, 70, and 100 fps with 6 repeats.
|
3.
|
This Contract Change Order will decrease the Contract price by an amount of $7,241,593. The breakdown of this amount is a $2,278,663 lump sum decrease and a $4,962,930 decrease in aggregate provisional sum as noted in item 6 of this Change Order. Accordingly, the Agreement is modified as follows:
|
a.
|
Schedule C-1 (Milestone Payment Schedule) of Attachment C of the Agreement will be amended by including the Milestone(s) listed in Exhibit A of this Change Order.
|
4.
|
The previous Existing Facility Labor Provisional Sum in Article 2.2 of Attachment EE of the Agreement was *** U.S. Dollars ($***) and *** hours. This Change Order will amend the previous values respectively to *** ($***) and *** hours.
|
5.
|
The previous Soils Provisional Sum in Article 2.1 of Attachment EE of the Agreement after the executed Change Order CO-0007, dated July 13, 2012, was *** ($***). This Change Order will amend the previous value and reduce the value by $***. The new Soils Provisional Sum is now *** ($***).
|
6.
|
The previous Aggregate Provisional Sum after Change Order CO-00018, dated January 17, 2013, was Two Hundred Sixty Three Million, Six Hundred Sixty Seven Thousand, Three Hundred Ninety One U.S. Dollars ($263,667,391). This Change Order will amend that value and the new value shall be Two Hundred Fifty Eight Million, Seven Hundred Four Thousand, Four Hundred Sixty One U.S. Dollars ($258,704,461).
|
7.
|
The overall cost breakdown data for all changes is provided in Exhibit B of this Change Order.
|
8.
|
The cost breakdown data for the addition of the Ultrasonic Metering Configuration and Calibration is provided in Exhibit C of this Change Order.
|
9.
|
The cost breakdown data for the Tank 106 Scope Deletion is provided in Exhibit D of this Change Order.
|
/s/ Ed Lehotsky
|
|
/s/ J. Jackson
|
Owner
|
|
Contractor
|
Ed Lehotsky
|
|
JT Jackson
|
Name
|
|
Name
|
VP LNG Project Management
|
|
Sr. Vice President
|
Title
|
|
Title
|
March 13, 2013
|
|
February 28, 2013
|
Date of Signing
|
|
Date of Signing
|
PROJECT NAME:
Sabine Pass LNG Liquefaction Facility
OWNER:
Sabine Pass Liquefaction, LLC
CONTRACTOR:
Bechtel Oil, Gas and Chemicals, Inc.
DATE OF AGREEMENT:
November 11, 2011
|
CHANGE ORDER NUMBER:
CO
-
00020
DATE OF CHANGE ORDER:
March 14, 2013
|
1.
|
Sections 1.A.9(e) of
Attachment O
is hereby amended and restated as follows:
|
(e)
|
Sum Insured
: The insurance policy shall (i) be on a completed value form, with no periodic reporting requirements, (ii) insure not less than $1,000,000,000 commencing at the earlier of LNTP or NTP, and insure no less than an amount to be determined based on probable maximum loss study performed by a reputable and experienced firm reasonably satisfactory to Contractor, Owner, and Owner's Lender's Insurance Advisor, with such maximum probable loss approved by the Parties and such increased amount commencing no later than March 31, 2013 (iii) value losses at replacement cost, without deduction for physical depreciation or obsolesce including custom duties, Taxes and fees and (iv) insure loss or damage from earth movement without a sub-limit, (v) insure property loss or damage from flood and named windstorm with a sub-limit not less than $150,000,000 commencing at the earlier of LNTP or NTP, provided that such sub-limit shall increase to an amount that is not less than $500,000,000 no later than March 31, 2013, and such sub-limit in the event of a named windstorm shall apply to the combined loss covered under Section 1.A.9 Builder's Risk and Section 1.A.10 Builder's Risk Delayed Startup, and (vi) insure loss or damage from strikes, riots and civil commotion with a sub-limit not less than $100,000,000.
|
/s/ Ed Lehotsky
|
|
/s/ Sergio Buoncristiano
|
Owner
|
|
Contractor
|
Ed Lehotsky
|
|
Sergio Buoncristiano
|
Name
|
|
Name
|
VP LNG Project Management
|
|
Principal Vice President
|
Title
|
|
Title
|
March 28, 2013
|
|
March 14, 2013
|
Date of Signing
|
|
Date of Signing
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Cheniere Energy Partners, L.P.;
|
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; and
|
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/ Charif Souki
|
Charif Souki
Chief Executive Officer of Cheniere Energy Partners GP, LLC,
general partner of Cheniere Energy Partners, L.P.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Cheniere Energy Partners, L.P.;
|
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; and
|
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/ Meg A. Gentle
|
Meg A. Gentle
Senior Vice President and Chief Financial Officer of Cheniere Energy Partners GP, LLC,
general partner of Cheniere Energy Partners, L.P.
|
(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 Partnership.
|
/s/ Charif Souki
|
Charif Souki
Chief Executive Officer of Cheniere Energy Partners GP, LLC, general partner of Cheniere Energy Partners, L.P.
|
(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 Partnership.
|
/s/ Meg A. Gentle
|
Meg A. Gentle
Senior Vice President and Chief Financial Officer of Cheniere Energy Partners GP, LLC, general partner of Cheniere Energy Partners, L.P.
|