|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Delaware
|
20-5913059
|
(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)
|
|
|
|
|
|
Large accelerated filer x
|
Accelerated filer o
|
Non-accelerated filer o
|
Smaller reporting company o
|
|
Emerging growth company o
|
Title of each class
|
Trading Symbol
|
Name of each exchange on which registered
|
Common Units Representing Limited Partner Interests
|
CQP
|
NYSE American
|
|
|
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
March 31,
|
|
December 31,
|
||||
|
|
2019
|
|
2018
|
||||
ASSETS
|
|
(unaudited)
|
|
|
||||
Current assets
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
—
|
|
|
$
|
—
|
|
Restricted cash
|
|
1,297
|
|
|
1,541
|
|
||
Accounts and other receivables
|
|
208
|
|
|
348
|
|
||
Accounts receivable—affiliate
|
|
113
|
|
|
114
|
|
||
Advances to affiliate
|
|
316
|
|
|
228
|
|
||
Inventory
|
|
109
|
|
|
99
|
|
||
Other current assets
|
|
46
|
|
|
26
|
|
||
Other current assets—affiliate
|
|
1
|
|
|
—
|
|
||
Total current assets
|
|
2,090
|
|
|
2,356
|
|
||
|
|
|
|
|
||||
Property, plant and equipment, net
|
|
15,615
|
|
|
15,390
|
|
||
Operating lease assets, net
|
|
93
|
|
|
—
|
|
||
Debt issuance costs, net
|
|
11
|
|
|
13
|
|
||
Non-current derivative assets
|
|
36
|
|
|
31
|
|
||
Other non-current assets, net
|
|
160
|
|
|
184
|
|
||
Total assets
|
|
$
|
18,005
|
|
|
$
|
17,974
|
|
|
|
|
|
|
||||
LIABILITIES AND PARTNERS’ EQUITY
|
|
|
|
|
||||
Current liabilities
|
|
|
|
|
||||
Accounts payable
|
|
$
|
31
|
|
|
$
|
15
|
|
Accrued liabilities
|
|
725
|
|
|
821
|
|
||
Due to affiliates
|
|
51
|
|
|
49
|
|
||
Deferred revenue
|
|
106
|
|
|
116
|
|
||
Deferred revenue—affiliate
|
|
—
|
|
|
1
|
|
||
Current operating lease liabilities
|
|
5
|
|
|
—
|
|
||
Derivative liabilities
|
|
10
|
|
|
66
|
|
||
Total current liabilities
|
|
928
|
|
|
1,068
|
|
||
|
|
|
|
|
||||
Long-term debt, net
|
|
16,073
|
|
|
16,066
|
|
||
Non-current operating lease liabilities
|
|
87
|
|
|
—
|
|
||
Non-current derivative liabilities
|
|
10
|
|
|
14
|
|
||
Other non-current liabilities
|
|
4
|
|
|
4
|
|
||
Other non-current liabilities—affiliate
|
|
22
|
|
|
22
|
|
||
|
|
|
|
|
||||
Partners’ equity
|
|
|
|
|
||||
Common unitholders’ interest (348.6 million units issued and outstanding at March 31, 2019 and December 31, 2018)
|
|
1,872
|
|
|
1,806
|
|
||
Subordinated unitholders’ interest (135.4 million units issued and outstanding at March 31, 2019 and December 31, 2018)
|
|
(965
|
)
|
|
(990
|
)
|
||
General partner’s interest (2% interest with 9.9 million units issued and outstanding at March 31, 2019 and December 31, 2018)
|
|
(26
|
)
|
|
(16
|
)
|
||
Total partners’ equity
|
|
881
|
|
|
800
|
|
||
Total liabilities and partners’ equity
|
|
$
|
18,005
|
|
|
$
|
17,974
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Revenues
|
|
|
|
||||
LNG revenues
|
$
|
1,367
|
|
|
$
|
1,015
|
|
LNG revenues—affiliate
|
305
|
|
|
503
|
|
||
Regasification revenues
|
66
|
|
|
65
|
|
||
Other revenues
|
11
|
|
|
10
|
|
||
Total revenues
|
1,749
|
|
|
1,593
|
|
||
|
|
|
|
||||
Operating costs and expenses
|
|
|
|
||||
Cost of sales (excluding depreciation and amortization expense shown separately below)
|
879
|
|
|
837
|
|
||
Operating and maintenance expense
|
138
|
|
|
95
|
|
||
Operating and maintenance expense—affiliate
|
29
|
|
|
26
|
|
||
General and administrative expense
|
3
|
|
|
4
|
|
||
General and administrative expense—affiliate
|
21
|
|
|
18
|
|
||
Depreciation and amortization expense
|
114
|
|
|
105
|
|
||
Impairment expense and loss on disposal of assets
|
2
|
|
|
—
|
|
||
Total operating costs and expenses
|
1,186
|
|
|
1,085
|
|
||
|
|
|
|
||||
Income from operations
|
563
|
|
|
508
|
|
||
|
|
|
|
||||
Other income (expense)
|
|
|
|
||||
Interest expense, net of capitalized interest
|
(187
|
)
|
|
(185
|
)
|
||
Derivative gain, net
|
—
|
|
|
8
|
|
||
Other income
|
9
|
|
|
4
|
|
||
Total other expense
|
(178
|
)
|
|
(173
|
)
|
||
|
|
|
|
||||
Net income
|
$
|
385
|
|
|
$
|
335
|
|
|
|
|
|
||||
Basic and diluted net income per common unit
|
$
|
0.75
|
|
|
$
|
0.67
|
|
|
|
|
|
||||
Weighted average number of common units outstanding used for basic and diluted net income per common unit calculation
|
348.6
|
|
|
348.6
|
|
Three Months Ended March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Common Unitholders’ Interest
|
|
Subordinated Unitholder’s Interest
|
|
General Partner’s Interest
|
|
Total Partners’ Equity
|
|||||||||||||||||
|
Units
|
|
Amount
|
|
Units
|
|
Amount
|
|
Units
|
|
Amount
|
|
||||||||||||
Balance at December 31, 2018
|
348.6
|
|
|
$
|
1,806
|
|
|
135.4
|
|
|
$
|
(990
|
)
|
|
9.9
|
|
|
$
|
(16
|
)
|
|
$
|
800
|
|
Net income
|
—
|
|
|
272
|
|
|
—
|
|
|
105
|
|
|
—
|
|
|
8
|
|
|
385
|
|
||||
Distributions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Common units, $0.59/unit
|
—
|
|
|
(206
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(206
|
)
|
||||
Subordinated units, $0.59/unit
|
—
|
|
|
—
|
|
|
—
|
|
|
(80
|
)
|
|
—
|
|
|
—
|
|
|
(80
|
)
|
||||
General partner units
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18
|
)
|
|
(18
|
)
|
||||
Balance at March 31, 2019
|
348.6
|
|
|
$
|
1,872
|
|
|
135.4
|
|
|
$
|
(965
|
)
|
|
9.9
|
|
|
$
|
(26
|
)
|
|
$
|
881
|
|
Three Months Ended March 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Common Unitholders’ Interest
|
|
Subordinated Unitholder’s Interest
|
|
General Partner’s Interest
|
|
Total Partners’ Equity
|
|||||||||||||||||
|
Units
|
|
Amount
|
|
Units
|
|
Amount
|
|
Units
|
|
Amount
|
|
||||||||||||
Balance at December 31, 2017
|
348.6
|
|
|
$
|
1,670
|
|
|
135.4
|
|
|
$
|
(1,043
|
)
|
|
9.9
|
|
|
$
|
12
|
|
|
$
|
639
|
|
Net income
|
—
|
|
|
236
|
|
|
—
|
|
|
92
|
|
|
—
|
|
|
7
|
|
|
335
|
|
||||
Distributions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Common units, $0.50/unit
|
—
|
|
|
(175
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(175
|
)
|
||||
Subordinated units, $0.50/unit
|
—
|
|
|
—
|
|
|
—
|
|
|
(68
|
)
|
|
—
|
|
|
—
|
|
|
(68
|
)
|
||||
General partner units
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
(6
|
)
|
||||
Balance at March 31, 2018
|
348.6
|
|
|
$
|
1,731
|
|
|
135.4
|
|
|
$
|
(1,019
|
)
|
|
9.9
|
|
|
$
|
13
|
|
|
$
|
725
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Cash flows from operating activities
|
|
|
|
||||
Net income
|
$
|
385
|
|
|
$
|
335
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization expense
|
114
|
|
|
105
|
|
||
Amortization of debt issuance costs, deferred commitment fees, premium and discount
|
6
|
|
|
8
|
|
||
Total losses (gains) on derivatives, net
|
(77
|
)
|
|
42
|
|
||
Net cash provided by (used for) settlement of derivative instruments
|
5
|
|
|
(3
|
)
|
||
Impairment expense and loss on disposal of assets
|
2
|
|
|
—
|
|
||
Other
|
2
|
|
|
2
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts and other receivables
|
105
|
|
|
(50
|
)
|
||
Accounts receivable—affiliate
|
1
|
|
|
48
|
|
||
Advances to affiliate
|
(26
|
)
|
|
(56
|
)
|
||
Inventory
|
(9
|
)
|
|
12
|
|
||
Accounts payable and accrued liabilities
|
(131
|
)
|
|
(69
|
)
|
||
Due to affiliates
|
(14
|
)
|
|
(25
|
)
|
||
Deferred revenue
|
(10
|
)
|
|
(18
|
)
|
||
Other, net
|
(7
|
)
|
|
—
|
|
||
Other, net—affiliate
|
(2
|
)
|
|
—
|
|
||
Net cash provided by operating activities
|
344
|
|
|
331
|
|
||
|
|
|
|
||||
Cash flows from investing activities
|
|
|
|
|
|
||
Property, plant and equipment, net
|
(283
|
)
|
|
(194
|
)
|
||
Other
|
(1
|
)
|
|
—
|
|
||
Net cash used in investing activities
|
(284
|
)
|
|
(194
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities
|
|
|
|
|
|
||
Distributions to owners
|
(304
|
)
|
|
(249
|
)
|
||
Net cash used in financing activities
|
(304
|
)
|
|
(249
|
)
|
||
|
|
|
|
||||
Net decrease in cash, cash equivalents and restricted cash
|
(244
|
)
|
|
(112
|
)
|
||
Cash, cash equivalents and restricted cash—beginning of period
|
1,541
|
|
|
1,589
|
|
||
Cash, cash equivalents and restricted cash—end of period
|
$
|
1,297
|
|
|
$
|
1,477
|
|
|
March 31,
|
||
|
2019
|
||
Cash and cash equivalents
|
$
|
—
|
|
Restricted cash
|
1,297
|
|
|
Total cash, cash equivalents and restricted cash
|
$
|
1,297
|
|
|
|
March 31,
|
|
December 31,
|
||||
|
|
2019
|
|
2018
|
||||
Current restricted cash
|
|
|
|
|
||||
Liquefaction Project
|
|
$
|
621
|
|
|
$
|
756
|
|
Cash held by us and our guarantor subsidiaries
|
|
676
|
|
|
785
|
|
||
Total current restricted cash
|
|
$
|
1,297
|
|
|
$
|
1,541
|
|
|
|
March 31,
|
|
December 31,
|
||||
|
|
2019
|
|
2018
|
||||
SPL trade receivable
|
|
$
|
187
|
|
|
$
|
330
|
|
Other accounts receivable
|
|
21
|
|
|
18
|
|
||
Total accounts and other receivables
|
|
$
|
208
|
|
|
$
|
348
|
|
|
|
March 31,
|
|
December 31,
|
||||
|
|
2019
|
|
2018
|
||||
Natural gas
|
|
$
|
10
|
|
|
$
|
28
|
|
LNG
|
|
25
|
|
|
6
|
|
||
Materials and other
|
|
74
|
|
|
65
|
|
||
Total inventory
|
|
$
|
109
|
|
|
$
|
99
|
|
|
|
March 31,
|
|
December 31,
|
||||
|
|
2019
|
|
2018
|
||||
LNG terminal costs
|
|
|
|
|
||||
LNG terminal and interconnecting pipeline facilities
|
|
$
|
16,747
|
|
|
$
|
12,760
|
|
LNG terminal construction-in-process
|
|
263
|
|
|
3,913
|
|
||
Accumulated depreciation
|
|
(1,402
|
)
|
|
(1,290
|
)
|
||
Total LNG terminal costs, net
|
|
15,608
|
|
|
15,383
|
|
||
Fixed assets
|
|
|
|
|
|
|
||
Fixed assets
|
|
27
|
|
|
26
|
|
||
Accumulated depreciation
|
|
(20
|
)
|
|
(19
|
)
|
||
Total fixed assets, net
|
|
7
|
|
|
7
|
|
||
Property, plant and equipment, net
|
|
$
|
15,615
|
|
|
$
|
15,390
|
|
•
|
interest rate swaps to hedge the exposure to volatility in a portion of the floating-rate interest payments under certain credit facilities (“Interest Rate Derivatives”) and
|
•
|
commodity derivatives consisting of natural gas supply contracts for the commissioning and operation of the Liquefaction Project (“Physical Liquefaction Supply Derivatives”) and associated economic hedges (collectively, the “Liquefaction Supply Derivatives”).
|
|
Fair Value Measurements as of
|
||||||||||||||||||||||||||||||
|
March 31, 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
|
||||||||||||||||
Liquefaction Supply Derivatives asset (liability)
|
$
|
2
|
|
|
$
|
(2
|
)
|
|
$
|
29
|
|
|
$
|
29
|
|
|
$
|
5
|
|
|
$
|
(23
|
)
|
|
$
|
(25
|
)
|
|
$
|
(43
|
)
|
|
|
Net Fair Value Asset
(in millions)
|
|
Valuation Approach
|
|
Significant Unobservable Input
|
|
Significant Unobservable Inputs Range
|
Physical Liquefaction Supply Derivatives
|
|
$29
|
|
Market approach incorporating present value techniques
|
|
Basis Spread
|
|
$(0.350) - $0.082
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Balance, beginning of period
|
|
$
|
(25
|
)
|
|
$
|
43
|
|
Realized and mark-to-market gains (losses):
|
|
|
|
|
||||
Included in cost of sales
|
|
9
|
|
|
(13
|
)
|
||
Purchases and settlements:
|
|
|
|
|
||||
Purchases
|
|
—
|
|
|
3
|
|
||
Settlements
|
|
45
|
|
|
(23
|
)
|
||
Balance, end of period
|
|
$
|
29
|
|
|
$
|
10
|
|
Change in unrealized gains (losses) relating to instruments still held at end of period
|
|
$
|
9
|
|
|
$
|
(13
|
)
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2019
|
|
2018
|
||||
CQP Interest Rate Derivatives gain
|
|
$
|
—
|
|
|
$
|
8
|
|
|
|
Fair Value Measurements as of (1)
|
||||||
Consolidated Balance Sheet Location
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
Other current assets
|
|
$
|
13
|
|
|
$
|
6
|
|
Non-current derivative assets
|
|
36
|
|
|
31
|
|
||
Total derivative assets
|
|
49
|
|
|
37
|
|
||
|
|
|
|
|
||||
Derivative liabilities
|
|
(10
|
)
|
|
(66
|
)
|
||
Non-current derivative liabilities
|
|
(10
|
)
|
|
(14
|
)
|
||
Total derivative liabilities
|
|
(20
|
)
|
|
(80
|
)
|
||
|
|
|
|
|
||||
Derivative asset (liability), net
|
|
$
|
29
|
|
|
$
|
(43
|
)
|
|
(1)
|
Does not include collateral calls of $1 million for such contracts, which are included in other current assets in our Consolidated Balance Sheets as of both March 31, 2019 and December 31, 2018.
|
|
|
|
Three Months Ended March 31,
|
||||||
|
Statement of Income Location (1)
|
|
2019
|
|
2018
|
||||
Liquefaction Supply Derivatives gain
|
LNG revenues
|
|
$
|
1
|
|
|
$
|
—
|
|
Liquefaction Supply Derivatives gain (loss)
|
Cost of sales
|
|
76
|
|
|
(50
|
)
|
|
(1)
|
Does not include the realized value associated with derivative instruments that settle through physical delivery. 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.
|
|
|
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 March 31, 2019
|
|
|
|
|
|
|
||||||
Liquefaction Supply Derivatives
|
|
$
|
51
|
|
|
$
|
(2
|
)
|
|
$
|
49
|
|
Liquefaction Supply Derivatives
|
|
(22
|
)
|
|
2
|
|
|
(20
|
)
|
|||
As of December 31, 2018
|
|
|
|
|
|
|
||||||
Liquefaction Supply Derivatives
|
|
$
|
63
|
|
|
$
|
(26
|
)
|
|
$
|
37
|
|
Liquefaction Supply Derivatives
|
|
(92
|
)
|
|
12
|
|
|
(80
|
)
|
|
|
March 31,
|
|
December 31,
|
||||
|
|
2019
|
|
2018
|
||||
Advances made to municipalities for water system enhancements
|
|
$
|
90
|
|
|
$
|
90
|
|
Advances and other asset conveyances to third parties to support LNG terminals
|
|
36
|
|
|
36
|
|
||
Tax-related payments and receivables
|
|
17
|
|
|
17
|
|
||
Information technology service assets
|
|
10
|
|
|
20
|
|
||
Advances made under EPC and non-EPC contracts
|
|
1
|
|
|
14
|
|
||
Other
|
|
6
|
|
|
7
|
|
||
Total other non-current assets, net
|
|
$
|
160
|
|
|
$
|
184
|
|
|
|
March 31,
|
|
December 31,
|
||||
|
|
2019
|
|
2018
|
||||
Interest costs and related debt fees
|
|
$
|
217
|
|
|
$
|
224
|
|
Accrued natural gas purchases
|
|
325
|
|
|
518
|
|
||
LNG terminal and related pipeline costs
|
|
175
|
|
|
79
|
|
||
Other accrued liabilities
|
|
8
|
|
|
—
|
|
||
Total accrued liabilities
|
|
$
|
725
|
|
|
$
|
821
|
|
|
|
March 31,
|
|
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
|
|
||
CQP Credit Facilities
|
|
—
|
|
|
—
|
|
||
Unamortized premium, discount and debt issuance costs, net
|
|
(177
|
)
|
|
(184
|
)
|
||
Total long-term debt, net
|
|
16,073
|
|
|
16,066
|
|
||
|
|
|
|
|
||||
Current debt:
|
|
|
|
|
||||
$1.2 billion SPL Working Capital Facility (“SPL Working Capital Facility”)
|
|
—
|
|
|
—
|
|
||
|
|
|
|
|
||||
Total debt, net
|
|
$
|
16,073
|
|
|
$
|
16,066
|
|
|
|
SPL Working Capital Facility
|
|
CQP Credit Facilities
|
||||
Original facility size
|
|
$
|
1,200
|
|
|
$
|
2,800
|
|
Less:
|
|
|
|
|
||||
Outstanding balance
|
|
—
|
|
|
—
|
|
||
Commitments prepaid or terminated
|
|
—
|
|
|
2,685
|
|
||
Letters of credit issued
|
|
421
|
|
|
—
|
|
||
Available commitment
|
|
$
|
779
|
|
|
$
|
115
|
|
|
|
|
|
|
||||
Interest rate
|
|
LIBOR plus 1.75% or base rate plus 0.75%
|
|
LIBOR plus 2.25% or base rate plus 1.25%, with 0.50% step-up as of February 25, 2019
|
||||
Maturity date
|
|
December 31, 2020
|
|
February 25, 2020
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Total interest cost
|
|
$
|
235
|
|
|
$
|
232
|
|
Capitalized interest
|
|
(48
|
)
|
|
(47
|
)
|
||
Total interest expense, net
|
|
$
|
187
|
|
|
$
|
185
|
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||
|
|
Carrying
Amount
|
|
Estimated
Fair Value
|
|
Carrying
Amount
|
|
Estimated
Fair Value
|
||||||||
Senior notes (1)
|
|
$
|
15,282
|
|
|
$
|
16,418
|
|
|
$
|
15,275
|
|
|
$
|
15,672
|
|
2037 SPL Senior Notes (2)
|
|
791
|
|
|
858
|
|
|
791
|
|
|
817
|
|
|
(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 and 2026 CQP 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.
|
|
Consolidated Balance Sheet Location
|
|
March 31, 2019
|
||
Right-of-use assets—Operating
|
Operating lease assets, net
|
|
$
|
93
|
|
Current operating lease liabilities
|
Current operating lease liabilities
|
|
5
|
|
|
Non-current operating lease liabilities
|
Non-current operating lease liabilities
|
|
87
|
|
|
Consolidated Statement of Income Location
|
|
Three Months Ended March 31, 2019
|
||
Operating lease cost (1)
|
Operating costs and expenses (2)
|
|
$
|
2
|
|
|
(1)
|
Includes short-term and variable lease costs.
|
(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
|
||
2019
|
$
|
7
|
|
2020
|
10
|
|
|
2021
|
10
|
|
|
2022
|
10
|
|
|
2023
|
10
|
|
|
Thereafter
|
124
|
|
|
Total lease payments
|
171
|
|
|
Less: Interest
|
(80
|
)
|
|
Present value of lease liabilities
|
$
|
91
|
|
Years Ending December 31,
|
Operating Leases (1)
|
||
2019
|
$
|
10
|
|
2020
|
10
|
|
|
2021
|
10
|
|
|
2022
|
10
|
|
|
2023
|
10
|
|
|
Thereafter
|
124
|
|
|
Total
|
$
|
174
|
|
|
(1)
|
Includes certain lease option renewals that are reasonably assured and payments for certain non-lease components.
|
|
March 31, 2019
|
|
Weighted-average remaining lease term (in years)
|
26.3
|
|
Weighted-average discount rate
|
4.8
|
%
|
|
Three Months Ended March 31, 2019
|
||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
||
Operating cash flows for operating leases
|
$
|
2
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2019
|
|
2018
|
||||
LNG revenues
|
|
$
|
1,366
|
|
|
$
|
1,015
|
|
LNG revenues—affiliate
|
|
305
|
|
|
503
|
|
||
Regasification revenues
|
|
66
|
|
|
65
|
|
||
Other revenues
|
|
11
|
|
|
10
|
|
||
Total revenues from customers
|
|
1,748
|
|
|
1,593
|
|
||
Gains from derivative instruments
|
|
1
|
|
|
—
|
|
||
Total revenues
|
|
$
|
1,749
|
|
|
$
|
1,593
|
|
|
|
Three Months Ended March 31, 2019
|
||
Deferred revenues, beginning of period
|
|
$
|
116
|
|
Cash received but not yet recognized
|
|
106
|
|
|
Revenue recognized from prior period deferral
|
|
(116
|
)
|
|
Deferred revenues, end of period
|
|
$
|
106
|
|
|
|
March 31, 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
|
|
$
|
53.1
|
|
|
10
|
|
$
|
53.6
|
|
|
10
|
Regasification revenues
|
|
2.6
|
|
|
6
|
|
2.6
|
|
|
6
|
||
Total revenues
|
|
$
|
55.7
|
|
|
|
|
$
|
56.2
|
|
|
|
|
(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. Approximately 58% and 56% of our LNG revenues during the three months ended March 31, 2019 and 2018, respectively, and approximately 3% of our regasification revenues during each of the three months ended March 31, 2019 and 2018 were related to variable consideration received from customers. All of our LNG revenues—affiliate were related to variable consideration received from customers during each of the three months ended March 31, 2019 and 2018.
|
|
Three Months Ended March 31,
|
|||||||
|
2019
|
|
2018
|
|||||
LNG revenues—affiliate
|
||||||||
Cheniere Marketing SPA and Cheniere Marketing Master SPA
|
$
|
305
|
|
|
$
|
503
|
|
|
|
|
|
|
|||||
Operating and maintenance expense—affiliate
|
||||||||
Services Agreements
|
29
|
|
|
26
|
|
|||
|
||||||||
General and administrative expense—affiliate
|
||||||||
Services Agreements
|
21
|
|
|
18
|
|
|
|
|
|
Limited Partner Units
|
|
|
|
|
||||||||||||
|
|
Total
|
|
Common Units
|
|
Subordinated Units
|
|
General Partner Units
|
|
IDR
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Three Months Ended March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
|
$
|
385
|
|
|
|
|
|
|
|
|
|
||||||||
Declared distributions
|
|
310
|
|
|
210
|
|
|
81
|
|
|
6
|
|
|
13
|
|
|||||
Assumed allocation of undistributed net income (1)
|
|
$
|
75
|
|
|
52
|
|
|
21
|
|
|
2
|
|
|
—
|
|
||||
Assumed allocation of net income
|
|
|
|
$
|
262
|
|
|
$
|
102
|
|
|
$
|
8
|
|
|
$
|
13
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted average units outstanding
|
|
|
|
348.6
|
|
|
135.4
|
|
|
|
|
|
||||||||
Basic and diluted net income per unit
|
|
|
|
$
|
0.75
|
|
|
$
|
0.75
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Three Months Ended March 31, 2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
|
$
|
335
|
|
|
|
|
|
|
|
|
|
||||||||
Declared distributions
|
|
278
|
|
|
192
|
|
|
74
|
|
|
6
|
|
|
6
|
|
|||||
Assumed allocation of undistributed net income (1)
|
|
$
|
57
|
|
|
40
|
|
|
16
|
|
|
1
|
|
|
—
|
|
||||
Assumed allocation of net income
|
|
|
|
$
|
232
|
|
|
$
|
90
|
|
|
$
|
7
|
|
|
$
|
6
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted average units outstanding
|
|
|
|
348.6
|
|
|
135.4
|
|
|
|
|
|
||||||||
Basic and diluted net income per unit (2)
|
|
|
|
$
|
0.67
|
|
|
$
|
0.67
|
|
|
|
|
|
|
(1)
|
Under our partnership agreement, the IDRs participate in net income (loss) only to the extent of the amount of cash distributions actually declared, thereby excluding the IDRs from participating in undistributed net income (loss).
|
(2)
|
Earnings per unit in the table may not recalculate exactly due to rounding because it is calculated based on whole numbers, not the rounded numbers presented.
|
|
|
Percentage of Total Revenues from External Customers
|
|
Percentage of Accounts Receivable from External Customers
|
||||
|
|
Three Months Ended March 31,
|
|
March 31,
|
|
December 31,
|
||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Customer A
|
|
31%
|
|
31%
|
|
35%
|
|
35%
|
Customer B
|
|
19%
|
|
25%
|
|
22%
|
|
23%
|
Customer C
|
|
19%
|
|
25%
|
|
23%
|
|
30%
|
Customer D
|
|
22%
|
|
*
|
|
10%
|
|
*
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Cash paid during the period for interest, net of amounts capitalized
|
$
|
185
|
|
|
$
|
242
|
|
Condensed Consolidating Balance Sheet
|
|||||||||||||||||||
March 31, 2019
|
|||||||||||||||||||
(in millions)
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Parent Issuer
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Restricted cash
|
661
|
|
|
15
|
|
|
621
|
|
|
—
|
|
|
1,297
|
|
|||||
Accounts and other receivables
|
1
|
|
|
2
|
|
|
205
|
|
|
—
|
|
|
208
|
|
|||||
Accounts receivable—affiliate
|
1
|
|
|
22
|
|
|
112
|
|
|
(22
|
)
|
|
113
|
|
|||||
Advances to affiliate
|
—
|
|
|
130
|
|
|
296
|
|
|
(110
|
)
|
|
316
|
|
|||||
Inventory
|
—
|
|
|
13
|
|
|
96
|
|
|
—
|
|
|
109
|
|
|||||
Other current assets
|
—
|
|
|
4
|
|
|
42
|
|
|
—
|
|
|
46
|
|
|||||
Other current assets—affiliate
|
—
|
|
|
1
|
|
|
21
|
|
|
(21
|
)
|
|
1
|
|
|||||
Total current assets
|
663
|
|
|
187
|
|
|
1,393
|
|
|
(153
|
)
|
|
2,090
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Property, plant and equipment, net
|
79
|
|
|
2,117
|
|
|
13,446
|
|
|
(27
|
)
|
|
15,615
|
|
|||||
Operating lease assets, net
|
—
|
|
|
89
|
|
|
20
|
|
|
(16
|
)
|
|
93
|
|
|||||
Debt issuance costs, net
|
1
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
11
|
|
|||||
Non-current derivative assets
|
—
|
|
|
—
|
|
|
36
|
|
|
—
|
|
|
36
|
|
|||||
Investments in subsidiaries
|
2,779
|
|
|
680
|
|
|
—
|
|
|
(3,459
|
)
|
|
—
|
|
|||||
Other non-current assets, net
|
—
|
|
|
23
|
|
|
137
|
|
|
—
|
|
|
160
|
|
|||||
Total assets
|
$
|
3,522
|
|
|
$
|
3,096
|
|
|
$
|
15,042
|
|
|
$
|
(3,655
|
)
|
|
$
|
18,005
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
LIABILITIES AND PARTNERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
26
|
|
|
$
|
—
|
|
|
$
|
31
|
|
Accrued liabilities
|
74
|
|
|
27
|
|
|
624
|
|
|
—
|
|
|
725
|
|
|||||
Due to affiliates
|
—
|
|
|
132
|
|
|
51
|
|
|
(132
|
)
|
|
51
|
|
|||||
Deferred revenue
|
—
|
|
|
22
|
|
|
84
|
|
|
—
|
|
|
106
|
|
|||||
Deferred revenue—affiliate
|
—
|
|
|
21
|
|
|
—
|
|
|
(21
|
)
|
|
—
|
|
|||||
Current operating lease liabilities
|
—
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|||||
Derivative liabilities
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
|||||
Total current liabilities
|
74
|
|
|
212
|
|
|
795
|
|
|
(153
|
)
|
|
928
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term debt, net
|
2,567
|
|
|
—
|
|
|
13,506
|
|
|
—
|
|
|
16,073
|
|
|||||
Non-current operating lease liabilities
|
—
|
|
|
83
|
|
|
4
|
|
|
—
|
|
|
87
|
|
|||||
Non-current derivative liabilities
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
|||||
Other non-current liabilities
|
—
|
|
|
1
|
|
|
3
|
|
|
—
|
|
|
4
|
|
|||||
Other non-current liabilities—affiliate
|
—
|
|
|
21
|
|
|
17
|
|
|
(16
|
)
|
|
22
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Partners’ equity
|
881
|
|
|
2,779
|
|
|
707
|
|
|
(3,486
|
)
|
|
881
|
|
|||||
Total liabilities and partners’ equity
|
$
|
3,522
|
|
|
$
|
3,096
|
|
|
$
|
15,042
|
|
|
$
|
(3,655
|
)
|
|
$
|
18,005
|
|
Condensed Consolidating Balance Sheet
|
|||||||||||||||||||
December 31, 2018
|
|||||||||||||||||||
(in millions)
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Parent Issuer
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Restricted cash
|
779
|
|
|
6
|
|
|
756
|
|
|
—
|
|
|
1,541
|
|
|||||
Accounts and other receivables
|
1
|
|
|
1
|
|
|
346
|
|
|
—
|
|
|
348
|
|
|||||
Accounts receivable—affiliate
|
1
|
|
|
40
|
|
|
113
|
|
|
(40
|
)
|
|
114
|
|
|||||
Advances to affiliate
|
—
|
|
|
104
|
|
|
210
|
|
|
(86
|
)
|
|
228
|
|
|||||
Inventory
|
—
|
|
|
12
|
|
|
87
|
|
|
—
|
|
|
99
|
|
|||||
Other current assets
|
—
|
|
|
2
|
|
|
24
|
|
|
—
|
|
|
26
|
|
|||||
Other current assets—affiliate
|
—
|
|
|
—
|
|
|
21
|
|
|
(21
|
)
|
|
—
|
|
|||||
Total current assets
|
781
|
|
|
165
|
|
|
1,557
|
|
|
(147
|
)
|
|
2,356
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Property, plant and equipment, net
|
79
|
|
|
2,128
|
|
|
13,209
|
|
|
(26
|
)
|
|
15,390
|
|
|||||
Debt issuance costs, net
|
1
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
13
|
|
|||||
Non-current derivative assets
|
—
|
|
|
—
|
|
|
31
|
|
|
—
|
|
|
31
|
|
|||||
Investments in subsidiaries
|
2,544
|
|
|
440
|
|
|
—
|
|
|
(2,984
|
)
|
|
—
|
|
|||||
Other non-current assets, net
|
—
|
|
|
26
|
|
|
158
|
|
|
—
|
|
|
184
|
|
|||||
Total assets
|
$
|
3,405
|
|
|
$
|
2,759
|
|
|
$
|
14,967
|
|
|
$
|
(3,157
|
)
|
|
$
|
17,974
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
LIABILITIES AND PARTNERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
11
|
|
|
$
|
—
|
|
|
$
|
15
|
|
Accrued liabilities
|
39
|
|
|
14
|
|
|
768
|
|
|
—
|
|
|
821
|
|
|||||
Due to affiliates
|
—
|
|
|
127
|
|
|
48
|
|
|
(126
|
)
|
|
49
|
|
|||||
Deferred revenue
|
—
|
|
|
25
|
|
|
91
|
|
|
—
|
|
|
116
|
|
|||||
Deferred revenue—affiliate
|
—
|
|
|
22
|
|
|
—
|
|
|
(21
|
)
|
|
1
|
|
|||||
Derivative liabilities
|
—
|
|
|
—
|
|
|
66
|
|
|
—
|
|
|
66
|
|
|||||
Total current liabilities
|
39
|
|
|
192
|
|
|
984
|
|
|
(147
|
)
|
|
1,068
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term debt, net
|
2,566
|
|
|
—
|
|
|
13,500
|
|
|
—
|
|
|
16,066
|
|
|||||
Non-current derivative liabilities
|
—
|
|
|
—
|
|
|
14
|
|
|
—
|
|
|
14
|
|
|||||
Other non-current liabilities
|
—
|
|
|
1
|
|
|
3
|
|
|
—
|
|
|
4
|
|
|||||
Other non-current liabilities—affiliate
|
—
|
|
|
22
|
|
|
—
|
|
|
—
|
|
|
22
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Partners’ equity
|
800
|
|
|
2,544
|
|
|
466
|
|
|
(3,010
|
)
|
|
800
|
|
|||||
Total liabilities and partners’ equity
|
$
|
3,405
|
|
|
$
|
2,759
|
|
|
$
|
14,967
|
|
|
$
|
(3,157
|
)
|
|
$
|
17,974
|
|
Condensed Consolidating Statement of Income
|
|||||||||||||||||||
Three Months Ended March 31, 2019
|
|||||||||||||||||||
(in millions)
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Parent Issuer
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
||||||||||
LNG revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,367
|
|
|
$
|
—
|
|
|
$
|
1,367
|
|
LNG revenues—affiliate
|
—
|
|
|
—
|
|
|
305
|
|
|
—
|
|
|
305
|
|
|||||
Regasification revenues
|
—
|
|
|
66
|
|
|
—
|
|
|
—
|
|
|
66
|
|
|||||
Regasification revenues—affiliate
|
—
|
|
|
66
|
|
|
—
|
|
|
(66
|
)
|
|
—
|
|
|||||
Other revenues
|
—
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|||||
Other revenues—affiliate
|
—
|
|
|
59
|
|
|
—
|
|
|
(59
|
)
|
|
—
|
|
|||||
Total revenues
|
—
|
|
|
202
|
|
|
1,672
|
|
|
(125
|
)
|
|
1,749
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating costs and expenses
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of sales (excluding depreciation and amortization expense shown separately below)
|
—
|
|
|
—
|
|
|
879
|
|
|
—
|
|
|
879
|
|
|||||
Cost of sales—affiliate
|
—
|
|
|
—
|
|
|
9
|
|
|
(9
|
)
|
|
—
|
|
|||||
Operating and maintenance expense
|
—
|
|
|
28
|
|
|
110
|
|
|
—
|
|
|
138
|
|
|||||
Operating and maintenance expense—affiliate
|
—
|
|
|
33
|
|
|
107
|
|
|
(111
|
)
|
|
29
|
|
|||||
General and administrative expense
|
1
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
3
|
|
|||||
General and administrative expense—affiliate
|
3
|
|
|
6
|
|
|
15
|
|
|
(3
|
)
|
|
21
|
|
|||||
Depreciation and amortization expense
|
1
|
|
|
17
|
|
|
96
|
|
|
—
|
|
|
114
|
|
|||||
Impairment expense and loss on disposal of assets
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|||||
Total operating costs and expenses
|
5
|
|
|
85
|
|
|
1,219
|
|
|
(123
|
)
|
|
1,186
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) from operations
|
(5
|
)
|
|
117
|
|
|
453
|
|
|
(2
|
)
|
|
563
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Other income (expense)
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense, net of capitalized interest
|
(36
|
)
|
|
(1
|
)
|
|
(150
|
)
|
|
—
|
|
|
(187
|
)
|
|||||
Equity earnings of subsidiaries
|
422
|
|
|
308
|
|
|
—
|
|
|
(730
|
)
|
|
—
|
|
|||||
Other income
|
4
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
9
|
|
|||||
Total other income (expense)
|
390
|
|
|
307
|
|
|
(145
|
)
|
|
(730
|
)
|
|
(178
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
$
|
385
|
|
|
$
|
424
|
|
|
$
|
308
|
|
|
$
|
(732
|
)
|
|
$
|
385
|
|
Condensed Consolidating Statement of Income
|
|||||||||||||||||||
Three Months Ended March 31, 2018
|
|||||||||||||||||||
(in millions)
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Parent Issuer
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
||||||||||
LNG revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,015
|
|
|
$
|
—
|
|
|
$
|
1,015
|
|
LNG revenues—affiliate
|
—
|
|
|
—
|
|
|
503
|
|
|
—
|
|
|
503
|
|
|||||
Regasification revenues
|
—
|
|
|
65
|
|
|
—
|
|
|
—
|
|
|
65
|
|
|||||
Regasification revenues—affiliate
|
—
|
|
|
64
|
|
|
—
|
|
|
(64
|
)
|
|
—
|
|
|||||
Other revenues
|
—
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|||||
Other revenues—affiliate
|
—
|
|
|
55
|
|
|
—
|
|
|
(55
|
)
|
|
—
|
|
|||||
Total revenues
|
—
|
|
|
194
|
|
|
1,518
|
|
|
(119
|
)
|
|
1,593
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating costs and expenses
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of sales (excluding depreciation and amortization expense shown separately below)
|
—
|
|
|
—
|
|
|
838
|
|
|
(1
|
)
|
|
837
|
|
|||||
Cost of sales—affiliate
|
—
|
|
|
—
|
|
|
8
|
|
|
(8
|
)
|
|
—
|
|
|||||
Operating and maintenance expense
|
—
|
|
|
17
|
|
|
78
|
|
|
—
|
|
|
95
|
|
|||||
Operating and maintenance expense—affiliate
|
—
|
|
|
32
|
|
|
103
|
|
|
(109
|
)
|
|
26
|
|
|||||
General and administrative expense
|
1
|
|
|
1
|
|
|
2
|
|
|
—
|
|
|
4
|
|
|||||
General and administrative expense—affiliate
|
3
|
|
|
4
|
|
|
12
|
|
|
(1
|
)
|
|
18
|
|
|||||
Depreciation and amortization expense
|
1
|
|
|
18
|
|
|
86
|
|
|
—
|
|
|
105
|
|
|||||
Total operating costs and expenses
|
5
|
|
|
72
|
|
|
1,127
|
|
|
(119
|
)
|
|
1,085
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) from operations
|
(5
|
)
|
|
122
|
|
|
391
|
|
|
—
|
|
|
508
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Other income (expense)
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense, net of capitalized interest
|
(34
|
)
|
|
—
|
|
|
(151
|
)
|
|
—
|
|
|
(185
|
)
|
|||||
Derivative gain, net
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|||||
Equity earnings of subsidiaries
|
363
|
|
|
242
|
|
|
—
|
|
|
(605
|
)
|
|
—
|
|
|||||
Other income (expense)
|
3
|
|
|
(1
|
)
|
|
2
|
|
|
—
|
|
|
4
|
|
|||||
Total other income (expense)
|
340
|
|
|
241
|
|
|
(149
|
)
|
|
(605
|
)
|
|
(173
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
$
|
335
|
|
|
$
|
363
|
|
|
$
|
242
|
|
|
$
|
(605
|
)
|
|
$
|
335
|
|
Condensed Consolidating Statement of Cash Flows
|
|||||||||||||||||||
Three Months Ended March 31, 2019
|
|||||||||||||||||||
(in millions)
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Parent Issuer
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Cash flows provided by operating activities
|
$
|
404
|
|
|
$
|
364
|
|
|
$
|
213
|
|
|
$
|
(637
|
)
|
|
$
|
344
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Property, plant and equipment, net
|
—
|
|
|
(5
|
)
|
|
(280
|
)
|
|
2
|
|
|
(283
|
)
|
|||||
Investments in subsidiaries
|
(218
|
)
|
|
(164
|
)
|
|
—
|
|
|
382
|
|
|
—
|
|
|||||
Other
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||||
Net cash used in investing activities
|
(218
|
)
|
|
(169
|
)
|
|
(281
|
)
|
|
384
|
|
|
(284
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Distributions to parent
|
—
|
|
|
(404
|
)
|
|
(231
|
)
|
|
635
|
|
|
—
|
|
|||||
Contributions from parent
|
—
|
|
|
218
|
|
|
164
|
|
|
(382
|
)
|
|
—
|
|
|||||
Distributions to owners
|
(304
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(304
|
)
|
|||||
Net cash used in financing activities
|
(304
|
)
|
|
(186
|
)
|
|
(67
|
)
|
|
253
|
|
|
(304
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
(118
|
)
|
|
9
|
|
|
(135
|
)
|
|
—
|
|
|
(244
|
)
|
|||||
Cash, cash equivalents and restricted cash—beginning of period
|
779
|
|
|
6
|
|
|
756
|
|
|
—
|
|
|
1,541
|
|
|||||
Cash, cash equivalents and restricted cash—end of period
|
$
|
661
|
|
|
$
|
15
|
|
|
$
|
621
|
|
|
$
|
—
|
|
|
$
|
1,297
|
|
|
March 31, 2019
|
||||||||||||||||||
|
Parent Issuer
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Restricted cash
|
661
|
|
|
15
|
|
|
621
|
|
|
—
|
|
|
1,297
|
|
|||||
Total cash, cash equivalents and restricted cash
|
$
|
661
|
|
|
$
|
15
|
|
|
$
|
621
|
|
|
$
|
—
|
|
|
$
|
1,297
|
|
Condensed Consolidating Statement of Cash Flows
|
|||||||||||||||||||
Three Months Ended March 31, 2018
|
|||||||||||||||||||
(in millions)
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Parent Issuer
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Cash flows provided by (used in) operating activities
|
$
|
(10
|
)
|
|
$
|
135
|
|
|
$
|
206
|
|
|
$
|
—
|
|
|
$
|
331
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Property, plant and equipment, net
|
—
|
|
|
(5
|
)
|
|
(189
|
)
|
|
—
|
|
|
(194
|
)
|
|||||
Investments in subsidiaries
|
(38
|
)
|
|
—
|
|
|
—
|
|
|
38
|
|
|
—
|
|
|||||
Distributions received from affiliates, net
|
167
|
|
|
—
|
|
|
—
|
|
|
(167
|
)
|
|
—
|
|
|||||
Net cash provided by (used in) investing activities
|
129
|
|
|
(5
|
)
|
|
(189
|
)
|
|
(129
|
)
|
|
(194
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Distributions to parent
|
—
|
|
|
(167
|
)
|
|
—
|
|
|
167
|
|
|
—
|
|
|||||
Contributions from parent
|
—
|
|
|
38
|
|
|
—
|
|
|
(38
|
)
|
|
—
|
|
|||||
Distributions to owners
|
(249
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(249
|
)
|
|||||
Net cash used in financing activities
|
(249
|
)
|
|
(129
|
)
|
|
—
|
|
|
129
|
|
|
(249
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
(130
|
)
|
|
1
|
|
|
17
|
|
|
—
|
|
|
(112
|
)
|
|||||
Cash, cash equivalents and restricted cash—beginning of period
|
1,033
|
|
|
12
|
|
|
544
|
|
|
—
|
|
|
1,589
|
|
|||||
Cash, cash equivalents and restricted cash—end of period
|
$
|
903
|
|
|
$
|
13
|
|
|
$
|
561
|
|
|
$
|
—
|
|
|
$
|
1,477
|
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
statements regarding our ability to pay distributions to our unitholders;
|
•
|
statements regarding our expected receipt of cash distributions from SPLNG, SPL or CTPL;
|
•
|
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, 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, 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, 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; 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
|
•
|
As of April 30, 2019, over 630 cumulative LNG cargoes have been produced, loaded and exported from the Liquefaction Project, with deliveries to 31 countries and regions worldwide.
|
•
|
In March 2019, SPL achieved substantial completion of Train 5 of the Liquefaction Project and commenced operating activities.
|
•
|
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 Liquefaction Project.
|
|
March 31,
|
|
December 31,
|
||||
|
2019
|
|
2018
|
||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
—
|
|
Restricted cash designated for the following purposes:
|
|
|
|
||||
Liquefaction Project
|
621
|
|
|
756
|
|
||
Cash held by us and our guarantor subsidiaries
|
676
|
|
|
785
|
|
||
Available commitments under the following credit facilities:
|
|
|
|
||||
$1.2 billion SPL Working Capital Facility (“SPL Working Capital Facility”)
|
779
|
|
|
775
|
|
||
Credit Facilities (“CQP Credit Facilities”)
|
115
|
|
|
115
|
|
•
|
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).
|
|
|
March 31,
|
|
December 31,
|
||||
|
|
2019
|
|
2018
|
||||
Senior notes (1)
|
|
$
|
16,250
|
|
|
$
|
16,250
|
|
Credit facilities outstanding balance (2)
|
|
—
|
|
|
—
|
|
||
Letters of credit issued (3)
|
|
421
|
|
|
425
|
|
||
Available commitments under credit facilities (3)
|
|
779
|
|
|
775
|
|
||
Total capital resources from borrowings and available commitments
|
|
$
|
17,450
|
|
|
$
|
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 our 2025 CQP Senior Notes and 2026 CQP Senior Notes.
|
(2)
|
Includes outstanding balance under the SPL Working Capital Facility and CTPL and SPLNG tranche term loans outstanding under the CQP Credit Facilities.
|
(3)
|
Consists of SPL Working Capital Facility. Does not include the letters of credit issued or available commitments under the CQP Credit Facilities, which are not specifically for the Sabine Pass LNG Terminal.
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Operating cash flows
|
$
|
344
|
|
|
$
|
331
|
|
Investing cash flows
|
(284
|
)
|
|
(194
|
)
|
||
Financing cash flows
|
(304
|
)
|
|
(249
|
)
|
||
|
|
|
|
||||
Net decrease in cash, cash equivalents and restricted cash
|
(244
|
)
|
|
(112
|
)
|
||
Cash, cash equivalents and restricted cash—beginning of period
|
1,541
|
|
|
1,589
|
|
||
Cash, cash equivalents and restricted cash—end of period
|
$
|
1,297
|
|
|
$
|
1,477
|
|
|
|
|
|
|
|
|
|
Total Distribution (in millions)
|
||||||||||||||||||
Date Paid
|
|
Period Covered by Distribution
|
|
Distribution Per Common Unit
|
|
Distribution Per Subordinated Unit
|
|
Common Units
|
|
Subordinated Units
|
|
General Partner Units
|
|
Incentive Distribution Rights
|
||||||||||||
February 14, 2019
|
|
October 1 - December 31, 2018
|
|
$
|
0.59
|
|
|
$
|
0.59
|
|
|
$
|
206
|
|
|
$
|
80
|
|
|
$
|
6
|
|
|
$
|
12
|
|
February 14, 2018
|
|
October 1 - December 31, 2017
|
|
0.50
|
|
|
0.50
|
|
|
174
|
|
|
68
|
|
|
5
|
|
|
1
|
|
|
|
Three Months Ended March 31,
|
||||||||||
(in millions, except volumes)
|
|
2019
|
|
2018
|
|
Change
|
||||||
LNG revenues
|
|
$
|
1,367
|
|
|
$
|
1,015
|
|
|
$
|
352
|
|
LNG revenues—affiliate
|
|
305
|
|
|
503
|
|
|
(198
|
)
|
|||
Regasification revenues
|
|
66
|
|
|
65
|
|
|
1
|
|
|||
Other revenues
|
|
11
|
|
|
10
|
|
|
1
|
|
|||
Total revenues
|
|
$
|
1,749
|
|
|
$
|
1,593
|
|
|
$
|
156
|
|
|
|
|
|
|
|
|
||||||
LNG volumes recognized as revenues (in TBtu)
|
|
263
|
|
|
241
|
|
|
22
|
|
|
Three Months Ended March 31,
|
||||||||||
(in millions)
|
2019
|
|
2018
|
|
Change
|
||||||
Cost of sales
|
$
|
879
|
|
|
$
|
837
|
|
|
$
|
42
|
|
Operating and maintenance expense
|
138
|
|
|
95
|
|
|
43
|
|
|||
Operating and maintenance expense—affiliate
|
29
|
|
|
26
|
|
|
3
|
|
|||
General and administrative expense
|
3
|
|
|
4
|
|
|
(1
|
)
|
|||
General and administrative expense—affiliate
|
21
|
|
|
18
|
|
|
3
|
|
|||
Depreciation and amortization expense
|
114
|
|
|
105
|
|
|
9
|
|
|||
Impairment expense and loss on disposal of assets
|
2
|
|
|
—
|
|
|
2
|
|
|||
Total operating costs and expenses
|
$
|
1,186
|
|
|
$
|
1,085
|
|
|
$
|
101
|
|
|
Three Months Ended March 31,
|
||||||||||
(in millions)
|
2019
|
|
2018
|
|
Change
|
||||||
Interest expense, net of capitalized interest
|
$
|
187
|
|
|
$
|
185
|
|
|
$
|
2
|
|
Derivative gain, net
|
—
|
|
|
(8
|
)
|
|
8
|
|
|||
Other income
|
(9
|
)
|
|
(4
|
)
|
|
(5
|
)
|
|||
Total other expense
|
$
|
178
|
|
|
$
|
173
|
|
|
$
|
5
|
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||
|
Fair Value
|
|
Change in Fair Value
|
|
Fair Value
|
|
Change in Fair Value
|
||||||||
Liquefaction Supply Derivatives
|
$
|
29
|
|
|
$
|
1
|
|
|
$
|
(43
|
)
|
|
$
|
7
|
|
ITEM 1A.
|
RISK FACTORS
|
ITEM 5.
|
OTHER INFORMATION
|
ITEM 6.
|
EXHIBITS
|
Exhibit No.
|
|
Description
|
10.1*
|
|
|
10.2*
|
|
|
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*
|
|
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.
|
|
|
CHENIERE ENERGY PARTNERS, L.P.
|
|
|
|
By:
|
Cheniere Energy Partners GP, LLC,
|
|
|
|
its general partner
|
|
|
|
|
Date:
|
May 8, 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:
|
May 8, 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)
|
(A)
|
Seller and Cheniere Marketing, LLC, entered into an LNG Sale and Purchase Agreement dated as of May 14, 2012 (as amended and restated on August 5, 2014, the “Agreement”);
|
(B)
|
Buyer assumed all of the rights, obligations and liabilities of Cheniere Marketing, LLC under the Agreement with effect from September 1, 2015;
|
(C)
|
Seller and Buyer have agreed to a master LNG sale and purchase agreement dated as of May 12, 2015 (the “Existing MSPA”) that, together with the related confirmations thereunder, documents the terms on which any uncommitted cargoes produced by the Sabine Liquefaction Facility and that are not taken for delivery by Buyer pursuant to the Agreement, may be sold by Seller to Buyer on a profit sharing basis;
|
(D)
|
Buyer also markets and sells uncommitted cargoes produced by the Corpus Christi LNG export facility;
|
(E)
|
Seller desires to achieve predictable cash-flows by securing additional long-term sales of LNG from the Sabine Liquefaction Facility; and
|
(F)
|
Seller and Buyer desire to amend certain terms of the Agreement, including to reflect the above matters, as set forth herein.
|
1.
|
Definitions
|
2.
|
Amendments
|
2.1
|
Section 1.1 of the Agreement is amended by inserting the following definitions:
|
Conflicts Committee:
|
the conflicts committee of the board of directors of CEGP;
|
Corpus Christi Liquefaction:
|
Corpus Christi Liquefaction, LLC and any successor-in-interest;
|
Existing MSPA:
|
the master LNG sale and purchase agreement between Buyer and Seller, dated as of May 12, 2015;
|
First Amendment Date:
|
May 3, 2019;
|
IRRA:
|
the Investors’ and Registration Rights Agreement dated July 31, 2012 among Cheniere Energy, Inc., CEGP, Cheniere Energy Partners, L.P., Cheniere Class B Units Holdings, LLC and any investors party thereto;
|
Long-Term LNG SPA:
|
any agreement for the sale and purchase of LNG that Seller has previously entered into or enters into in the future and which has an initial LNG supply period of five (5) or more years;
|
Short-Term Cargo:
|
any cargo of LNG that is sourced from the Gulf Coast of the United States of America and sold by Buyer or any of its Affiliates, including those cargoes purchased by Buyer pursuant to this Agreement and the LNG sale and purchase agreement between Buyer and Corpus Christi Liquefaction, LLC dated November 28, 2014, but excluding those cargoes of LNG purchased or sold by Buyer or any of its Affiliates pursuant to any other LNG sale and purchase agreement with an initial contract term of at least ten years.
|
Train 6 DFCD:
|
the Subsequent Train DFCD in respect of the sixth (6th) Train;
|
2.2
|
Section 3.3 of the Agreement is deleted in its entirety, and the following Section 3.3 is inserted in lieu thereof:
|
3.3.1
|
Subject to Section 26.1, and notwithstanding the Discharge Terminal corresponding to any cargo in the ADP or Ninety Day Schedule, Buyer shall be free to (i) sell such LNG free on board at the Sabine Pass Facility or at any other point during a voyage, or at or after the unloading of any LNG purchased hereunder and (ii) transport the LNG to, and market the LNG at, any destination of its choosing, in accordance with the provisions of this Agreement. This Section 3.3.1 is without prejudice to Section 3.3.2.
|
3.3.2
|
Buyer will use commercially reasonable efforts to market and sell all Short-Term Cargoes of LNG that it purchases from Seller pursuant to this Agreement or the Existing MSPA after the First Amendment Date on a non-discriminatory basis as compared to all other Short-Term Cargoes, when viewed on an arms-length basis and taking into account all relevant factors applicable to each such LNG cargo.
|
3.3.3
|
On a quarterly basis, Buyer will deliver to the board of directors of CEGP a confidential report identifying the information set out in Exhibit F (Sample Report) in respect of each Short-Term Cargo delivered to Buyer or its Affiliate (as applicable) during the preceding calendar quarter; provided, however, that such report will instead be delivered by Buyer to the Conflicts Committee during the following periods: (i) from and after the end of the Investor Approval Period (as defined in the IRRA) and (ii) during any period where any non-Cheniere member of the board of directors of CEGP or one or more members of the Investors Group (as defined in the IRRA) has a conflict of interest due to its participation in or association with an LNG facility located in the United States of America or a business engaged in the marketing or trading of waterborne LNG, in each case other than that of Cheniere Energy, Inc., as determined by the Conflicts Committee.
|
3.3.4
|
Section 3.3.2 shall apply until the latest to occur of:
|
(b)
|
the end of the Investor Approval Period (as defined in the IRRA) without regard to clause (ii) of the definition thereof, and
|
(c)
|
the date upon which Seller has entered into Long-Term LNG SPAs for the aggregate sale of one billion two hundred thirty-five million (1,235,000,000) MMBtu per annum of LNG,
|
2.3
|
Section 5.1.7 of the Agreement is deleted in its entirety, together with all references to that Section 5.1.7 in the Agreement.
|
2.4
|
Section 5.4 of the Agreement is amended by inserting the following sentence at the end of the existing provision:
|
2.5
|
Exhibits in the form set out as Annex A and Annex B to this Amendment are inserted as a new Exhibit E (Profit Share Calculation) and a new Exhibit F (Sample Report) to the Agreement.
|
2.6
|
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.
|
3.6
|
No Partnership. Parties are each independent of the other and nothing in this Amendment is intended, or shall be deemed, to create a partnership or joint venture of the Parties. Nothing herein shall be interpreted to create a principal-agent relationship between the Parties.
|
SELLER:
|
|
BUYER:
|
|
|
|
|
|
SABINE PASS LIQUEFACTION, LLC
|
|
CHENIERE MARKETING INTERNATIONAL LLP
|
|
|
|
|
|
|
|
By: CHENIERE MARKETING, LLC
|
|
|
|
its managing member
|
|
|
|
|
|
/s/ Michael Wortley
|
|
/s/ Anatol Feygin
|
|
Name: Michael Wortley
|
|
Name: Anatol Feygin
|
|
Title: Chief Financial Officer
|
|
Title: Executive Vice President and Chief Commercial Officer
|
|
|
|
|
|
|
Cargo Number
|
Loading Port
|
Delivery Mode (FOB/DES)
|
Loading Window / Loading Date
|
Anticipated Unloading Port
|
Purchase Price*
|
Estimated Total Shipping Cost
($/MMBtu)
|
Estimated Total Cost (Shipping, Hedge, etc.)
($/MMBtu)
|
|
115% HH
($/MMBtu)
|
$X / MMBtu
|
||||||||
Quarter 1 2019
|
1
|
|
|
|
|
|
|
|
|
2
|
|
|
|
|
|
|
|
|
|
3
|
|
|
|
|
|
|
|
|
|
4
|
|
|
|
|
|
|
|
|
|
5
|
|
|
|
|
|
|
|
|
|
6
|
|
|
|
|
|
|
|
|
|
7
|
|
|
|
|
|
|
|
|
|
8
|
|
|
|
|
|
|
|
|
|
9
|
|
|
|
|
|
|
|
|
|
10
|
|
|
|
|
|
|
|
|
Re:
|
Letter Agreement regarding the Base SPA (“Letter Agreement”)
|
Sincerely,
|
|
|
|
|
|
Sabine Pass Liquefaction, LLC
|
|
|
|
|
|
|
|
|
By:
|
/s/ Michael Wortley
|
|
|
Michael Wortley
|
|
|
Chief Financial Officer
|
|
|
|
|
|
|
|
By:
|
/s/ Anatol Feygin
|
|
|
Anatol Feygin
|
|
|
Executive Vice President and Chief Commercial Officer
|
|
|
|
|
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;
|
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 Partners GP, LLC, the 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;
|
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 Partners GP, LLC, the 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/ Jack A. Fusco
|
Jack A. Fusco
|
Chief Executive Officer of
|
Cheniere Energy Partners GP, LLC, the 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/ Michael J. Wortley
|
Michael J. Wortley
|
Chief Financial Officer of
|
Cheniere Energy Partners GP, LLC, the general partner of
|
Cheniere Energy Partners, L.P.
|