Cheniere Energy Partners, L.P. (“Cheniere Partners”) (NYSE
American: CQP) today announced its financial results for first
quarter 2023.
HIGHLIGHTS
- For the three months ended March 31, 2023, Cheniere Partners
generated revenues of $2.9 billion, net income of $1.9 billion, and
Adjusted EBITDA1 of $1.0 billion.
- Declared a cash distribution of $1.03 per common unit to
unitholders of record as of May 8, 2023, comprised of a base amount
equal to $0.775 and a variable amount equal to $0.255. The common
unit distribution and the related general partner distribution will
be paid on May 15, 2023.
- Reconfirming full year 2023 distribution guidance of $4.00 -
$4.25 per common unit.
- In February 2023, certain subsidiaries of Cheniere Partners
initiated the pre-filing review process with the Federal Energy
Regulatory Commission (“FERC”) under the National Environmental
Policy Act (“NEPA”) for the SPL Expansion Project (defined below).
In April 2023, certain of our subsidiaries executed a contract with
Bechtel Energy Inc. (“Bechtel”) to provide the Front End
Engineering and Design (“FEED”) for the SPL Expansion Project.
- In February 2023, S&P Global Ratings upgraded its credit
rating of Sabine Pass Liquefaction, LLC (“SPL”) from BBB to BBB+
with a stable outlook.
2023 FULL YEAR DISTRIBUTION GUIDANCE
2023
Distribution per Unit
$
4.00
-
$
4.25
SUMMARY AND REVIEW OF FINANCIAL RESULTS
(in millions, except LNG
data)
Three Months Ended March
31,
2023
2022
% Change
Revenues
$
2,917
$
3,328
(12
) %
Net income
$
1,935
$
159
1,117
%
Adjusted EBITDA1
$
1,026
$
1,031
—
%
LNG exported:
Number of cargoes
112
105
7
%
Volumes (TBtu)
403
384
5
%
LNG volumes loaded (TBtu)
403
385
5
%
Net income increased by approximately $1.8 billion during the
three months ended March 31, 2023 as compared to the three months
ended March 31, 2022. The increase was primarily due to non-cash
favorable changes in fair value of commodity derivatives (further
described below) and increased volumes of LNG delivered, partially
offset by lower regasification revenues related to the previously
announced early termination of the Terminal Use Agreement (“TUA”)
between Sabine Pass LNG, L.P. and Chevron.
1
Non-GAAP financial measure. See
“Reconciliation of Non-GAAP Measures” for further details.
Adjusted EBITDA1 decreased by approximately $5 million during
the three months ended March 31, 2023 as compared to the three
months ended March 31, 2022. The decrease in Adjusted EBITDA was
primarily due to lower regasification revenues related to the early
termination of the Chevron TUA, partially offset by increased
volumes of LNG delivered.
Substantially all derivative gains (losses) are attributable to
the recognition at fair value of our long-term Integrated
Production Marketing (“IPM”) agreement with Tourmaline Oil
Marketing Corp. (“Tourmaline”), a natural gas supply contract with
pricing indexed to the Platts Japan Korea Marker (“JKM”). Our IPM
agreement is structured to provide stable margins on purchases of
natural gas and sales of LNG over the life of the agreement and has
a fixed fee component, similar to that of LNG sold under our
long-term, fixed fee LNG SPAs. However, the long-term duration and
international price basis of our IPM agreement makes it
particularly susceptible to fluctuations in fair market value from
period to period. In addition, accounting requirements prescribe
recognition of this long-term gas supply agreement at fair value,
but does not currently permit fair value recognition of the
associated sale of LNG, resulting in a mismatch of accounting
recognition for the purchase of natural gas and sale of LNG. As a
result of the significant volatility in the forward JKM curves
during the three months ended March 31, 2023, we recognized
approximately $1.0 billion of non-cash favorable changes in fair
value attributable to the Tourmaline IPM agreement.
During the three months ended March 31, 2023, we recognized in
income 403 TBtu of LNG loaded from the SPL Project, none of which
was related to commissioning activities.
Capital Resources
As of March 31, 2023, our total available liquidity was
approximately $2.6 billion. We had cash and cash equivalents of
approximately $834 million. In addition, we had current restricted
cash and cash equivalents of $160 million, $750 million of
available commitments under our CQP Credit Facilities, and $871
million of available commitments under the SPL Working Capital
Facility.
SABINE PASS OVERVIEW
We own natural gas liquefaction facilities consisting of 6
liquefaction Trains, with a total production capacity of
approximately 30 million tonnes per annum (“mtpa”) of LNG at the
Sabine Pass LNG terminal in Cameron Parish, Louisiana (the “SPL
Project”).
As of April 26, 2023, approximately 2,070 cumulative LNG cargoes
totaling approximately 142 million tonnes of LNG have been
produced, loaded, and exported from the SPL Project.
SPL Expansion Project
We are developing an expansion adjacent to the SPL Project
consisting of up to 3 natural gas liquefaction trains with an
expected total production capacity of approximately 20 mtpa of LNG
(the “SPL Expansion Project”). In February 2023, certain of our
subsidiaries initiated the pre-filing review process with the FERC
under the NEPA, and in April 2023, executed a contract with Bechtel
to provide the FEED for the SPL Expansion Project.
DISTRIBUTIONS TO UNITHOLDERS
In April 2023, we declared a cash distribution of $1.03 per
common unit to unitholders of record as of May 8, 2023, comprised
of a base amount equal to $0.775 ($3.10 annualized) and a variable
amount equal to $0.255, which takes into consideration, among other
things, amounts reserved for annual debt repayment and capital
allocation goals, anticipated capital expenditures to be funded
with cash, and cash reserves to provide for the proper conduct of
the business. The common unit distribution and the related general
partner distribution will be paid on May 15, 2023.
INVESTOR CONFERENCE CALL AND WEBCAST
Cheniere Energy, Inc. will host a conference call to discuss its
financial and operating results for first quarter 2023 on Tuesday,
May 2, 2023, at 11 a.m. Eastern time / 10 a.m. Central time. A
listen-only webcast of the call and an accompanying slide
presentation may be accessed through our website at
www.cheniere.com. Following the call, an archived recording will be
made available on our website. The call and accompanying slide
presentation may include financial and operating results or other
information regarding Cheniere Partners.
About Cheniere Partners
Cheniere Partners owns the Sabine Pass LNG terminal located in
Cameron Parish, Louisiana, which has natural gas liquefaction
facilities consisting of six liquefaction Trains with a total
production capacity of approximately 30 mtpa of LNG. The Sabine
Pass LNG terminal also has operational regasification facilities
that include five LNG storage tanks, vaporizers, and three marine
berths. Cheniere Partners also owns the Creole Trail Pipeline,
which interconnects the Sabine Pass LNG terminal with a number of
large interstate and intrastate pipelines.
For additional information, please refer to the Cheniere
Partners website at www.cheniere.com and Quarterly Report on Form
10-Q for the quarter ended March 31, 2023, filed with the
Securities and Exchange Commission.
Use of Non-GAAP Financial Measures
In addition to disclosing financial results in accordance with
U.S. GAAP, the accompanying news release contains a non-GAAP
financial measure. Adjusted EBITDA is a non-GAAP financial measure
that is used to facilitate comparisons of operating performance
across periods. This non-GAAP measure should be viewed as a
supplement to and not a substitute for our U.S. GAAP measures of
performance and the financial results calculated in accordance with
U.S. GAAP, and the reconciliation from these results should be
carefully evaluated.
Forward-Looking Statements
This press release contains certain statements that may include
“forward-looking statements.” All statements, other than statements
of historical or present facts or conditions, included herein are
“forward-looking statements.” Included among “forward-looking
statements” are, among other things, (i) statements regarding
Cheniere Partners’ financial and operational guidance, business
strategy, plans and objectives, including the development,
construction and operation of liquefaction facilities, (ii)
statements regarding Cheniere Partners’ anticipated quarterly
distributions and ability to make quarterly distributions at the
base amount or any amount, (iii) statements regarding regulatory
authorization and approval expectations, (iv) statements expressing
beliefs and expectations regarding the development of Cheniere
Partners’ LNG terminal and liquefaction business, (v) statements
regarding the business operations and prospects of third-parties,
(vi) statements regarding potential financing arrangements, and
(vii) statements regarding future discussions and entry into
contracts. Although Cheniere Partners believes that the
expectations reflected in these forward-looking statements are
reasonable, they do involve assumptions, risks and uncertainties,
and these expectations may prove to be incorrect. Cheniere
Partners’ actual results could differ materially from those
anticipated in these forward-looking statements as a result of a
variety of factors, including those discussed in Cheniere Partners’
periodic reports that are filed with and available from the
Securities and Exchange Commission. You should not place undue
reliance on these forward-looking statements, which speak only as
of the date of this press release. Other than as required under the
securities laws, Cheniere Partners does not assume a duty to update
these forward-looking statements.
(Financial Tables Follow)
Cheniere Energy Partners,
L.P.
Consolidated Statements of
Income
(in millions, except per unit
data)(1)
(unaudited)
Three Months Ended
March 31,
2023
2022
Revenues
LNG revenues
$
2,106
$
2,488
LNG revenues—affiliate
761
757
Regasification revenues
34
68
Other revenues
16
15
Total revenues
2,917
3,328
Operating costs and expenses
Cost of sales (excluding items shown
separately below)
313
2,562
Cost of sales—affiliate
17
5
Operating and maintenance expense
206
170
Operating and maintenance
expense—affiliate
44
38
Operating and maintenance expense—related
party
16
12
General and administrative expense
3
3
General and administrative
expense—affiliate
22
23
Depreciation and amortization expense
167
153
Total operating costs and expenses
788
2,966
Income from operations
2,129
362
Other income (expense)
Interest expense, net of capitalized
interest
(208
)
(203
)
Other income, net
14
—
Total other expense
(194
)
(203
)
Net income
$
1,935
$
159
Basic and diluted net income (loss) per
common unit(1)
$
3.50
$
(0.11
)
Weighted average basic and diluted number
of common units outstanding
484.0
484.0
(1)
Please refer to the Cheniere Energy
Partners, L.P. Quarterly Report on Form 10-Q for the quarter ended
March 31, 2023, filed with the Securities and Exchange
Commission.
Cheniere Energy Partners,
L.P.
Consolidated Balance
Sheets
(in millions, except unit
data) (1)
March 31,
December 31,
2023
2022
ASSETS
(unaudited)
Current assets
Cash and cash equivalents
$
834
$
904
Restricted cash and cash equivalents
160
92
Trade and other receivables, net of
current expected credit losses
269
627
Trade receivables—affiliate
263
551
Advances to affiliate
157
177
Inventory
150
160
Current derivative assets
55
24
Margin deposits
—
35
Other current assets
44
50
Other current assets—affiliate
1
—
Total current assets
1,933
2,620
Property, plant and equipment, net of
accumulated depreciation
16,587
16,725
Operating lease assets
87
89
Debt issuance costs, net of accumulated
amortization
7
8
Derivative assets
32
28
Other non-current assets, net
171
163
Total assets
$
18,817
$
19,633
LIABILITIES AND PARTNERS’
DEFICIT
Current liabilities
Accounts payable
$
70
$
32
Accrued liabilities
674
1,378
Accrued liabilities—related party
5
6
Current debt, net of discount and debt
issuance costs
60
—
Due to affiliates
32
74
Deferred revenue
83
144
Deferred revenue—affiliate
—
3
Current operating lease liabilities
11
10
Current derivative liabilities
400
769
Other current liabilities
13
5
Total current liabilities
1,348
2,421
Long-term debt, net of premium, discount
and debt issuance costs
16,145
16,198
Operating lease liabilities
78
80
Finance lease liabilities
17
18
Derivative liabilities
2,157
3,024
Other non-current
liabilities—affiliate
22
23
Partners’ deficit
Common unitholders’ interest (484.0
million units issued and outstanding at both March 31, 2023 and
December 31, 2022)
261
(1,118
)
General partner’s interest (2% interest
with 9.9 million units issued and outstanding at both March 31,
2023 and December 31, 2022)
(1,211
)
(1,013
)
Total partners’ deficit
(950
)
(2,131
)
Total liabilities and partners’
deficit
$
18,817
$
19,633
(1)
Please refer to the Cheniere Energy
Partners, L.P. Quarterly Report on Form 10-Q for the quarter ended
March 31, 2023, filed with the Securities and Exchange
Commission.
Reconciliation of Non-GAAP
Measures
Regulation G
Reconciliations
Adjusted EBITDA
The following table reconciles our
Adjusted EBITDA to U.S. GAAP results for the three months ended
March 31, 2023 and 2022 (in millions):
Three Months Ended March
31,
2023
2022
Net income
$
1,935
$
159
Interest expense, net of capitalized
interest
208
203
Other income, net
(14
)
—
Income from operations
$
2,129
$
362
Adjustments to reconcile income from
operations to Adjusted EBITDA:
Depreciation and amortization expense
167
153
Loss (gain) from changes in fair value of
commodity derivatives, net (1)
(1,270
)
516
Adjusted EBITDA
$
1,026
$
1,031
(1)
Change in fair value of commodity
derivatives prior to contractual delivery or termination
Adjusted EBITDA is commonly used as a supplemental financial
measure by our management and external users of our Consolidated
Financial Statements to assess the financial performance of our
assets without regard to financing methods, capital structures, or
historical cost basis. Adjusted EBITDA is not intended to represent
cash flows from operations or net income as defined by U.S. GAAP
and is not necessarily comparable to similarly titled measures
reported by other companies.
We believe Adjusted EBITDA provides relevant and useful
information to management, investors and other users of our
financial information in evaluating the effectiveness of our
operating performance in a manner that is consistent with
management’s evaluation of financial and operating performance.
Adjusted EBITDA is calculated by taking net income before
interest expense, net of capitalized interest, depreciation and
amortization, and adjusting for the effects of certain non-cash
items, other non-operating income or expense items and other items
not otherwise predictive or indicative of ongoing operating
performance, including the effects of modification or
extinguishment of debt, impairment expense and loss on disposal of
assets, and changes in the fair value of our commodity derivatives
prior to contractual delivery or termination. The change in fair
value of commodity derivatives is considered in determining
Adjusted EBITDA given that the timing of recognizing gains and
losses on these derivative contracts differs from the recognition
of the related item economically hedged. We believe the exclusion
of these items enables investors and other users of our financial
information to assess our sequential and year-over-year performance
and operating trends on a more comparable basis and is consistent
with management’s own evaluation of performance.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230501005647/en/
Cheniere Partners Investors Randy
Bhatia, 713-375-5479 Frances Smith, 713-375-5753 Media Relations Eben Burnham-Snyder,
713-375-5764
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