EX-99.1 2 cqp20193rdqtrerex991.htm EXHIBIT 99.1 Exhibit


EXHIBIT 99.1

CHENIERE ENERGY PARTNERS, L.P. NEWS RELEASE
Cheniere Partners Reports Third Quarter 2019 Results, Reconfirms Full Year 2019 Distribution Guidance, and Provides 2020 Distribution Guidance
Summary of Third Quarter 2019 Results (in millions, except LNG data)
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2019
 
2018
 
2019
 
2018
Revenues
$
1,476

 
$
1,529

 
$
4,930

 
$
4,529

Net income
$
110

 
$
307

 
$
727

 
$
923

Adjusted EBITDA1
$
543

 
$
604

 
$
1,741

 
$
1,825

LNG exported:
 
 
 
 
 
 
 
Number of cargoes
79

 
65

 
241

 
193

Volumes (TBtu)
280

 
228

 
856

 
691

LNG volumes loaded (TBtu)
277

 
228

 
855

 
691


Summary Distribution Guidance
2019 Full Year Distribution Guidance
 
2019
Distribution per Unit
$
2.35

-
$
2.55

2020 Full Year Distribution Guidance
 
2020
Distribution per Unit
$
2.55

-
$
2.65

Recent Highlights
Operational
As of October 25, 2019, approximately 800 cumulative LNG cargoes totaling approximately 55 million tonnes of LNG have been produced, loaded, and exported from the SPL Project (defined below).
Financial
In September 2019, we issued an aggregate principal amount of $1.5 billion of 4.50% Senior Notes due 2029, with proceeds of the offering being used to prepay the outstanding balance under the $750 million term loan under our credit facilities and for general corporate purposes, including funding future capital expenditures in connection with the construction of Train 6 at the SPL Project. After applying the proceeds of this offering, only a $750 million revolving credit facility, which is currently undrawn, remains as part of our credit facilities.
In September 2019, the date of first commercial delivery was reached under the 20-year LNG Sale and Purchase Agreements (“SPAs”) with Centrica plc and Total Gas & Power North America, Inc. relating to Train 5 of the SPL Project.


___________________________ 
1 Non-GAAP financial measure. See “Reconciliation of Non-GAAP Measures” for further details.
2 Total margins as used herein refers to total revenues less cost of sales and cost of sales—affiliate.



Liquefaction Project Update
 
SPL Project
Liquefaction Train
Train 6
Project Status
Under Construction
Project Completion Percentage(1)
38.1%(2)
Expected Substantial Completion
1H 2023
Note: Project update excludes Trains in operation
(1) Project completion percentage as of September 30, 2019
(2) Engineering 83.8% complete, procurement 54.1% complete, and construction 5.5% complete

Houston, Texas - November 1, 2019 - Cheniere Energy Partners, L.P. (“Cheniere Partners”) (NYSE American: CQP) reported net income of $110 million and $727 million, respectively, for the three and nine months ended September 30, 2019, compared to net income of $307 million and $923 million for the comparable 2018 periods. The decreases in net income were primarily a result of increased total operating costs and expenses primarily as a result of additional Trains in operation and certain maintenance and related activities at the SPL Project, lower margins per MMBtu of LNG recognized in income, and increased interest expense, partially offset by increased volumes of LNG recognized in income primarily as a result of additional Trains in operation.
Adjusted EBITDA1 was $543 million and $1.74 billion, respectively, for the three and nine months ended September 30, 2019, compared to $604 million and $1.83 billion for the comparable 2018 periods. The decreases in Adjusted EBITDA were primarily due to increased total operating costs and expenses as a result of additional Trains in operation and certain maintenance and related activities at the SPL Project and decreased pricing of LNG recognized in income, partially offset by increased volumes of LNG recognized in income primarily as a result of additional Trains in operation.
Income from operations decreased $146 million during the three months ended September 30, 2019 as compared to the comparable 2018 period, primarily due to increased total operating costs and expenses as a result of additional Trains in operation and certain maintenance and related activities at the SPL Project and decreased total margins2 on LNG recognized in income primarily as a result of increased net loss from changes in fair value of commodity derivatives and decreased pricing of LNG recognized in income, partially offset by increased volumes of LNG recognized in income primarily as a result of additional Trains in operation.
Income from operations decreased $91 million during the nine months ended September 30, 2019, primarily due to increased total operating costs and expenses as a result of additional Trains in operation and certain maintenance and related activities at the SPL Project, partially offset by increased total margins on LNG primarily as a result of increased volumes of LNG recognized in income and increased net gain from changes in fair value of commodity derivatives, partially offset by decreased pricing of LNG recognized in income.
During the three months ended September 30, 2019, 79 LNG cargoes were exported from the SPL Project, none of which were commissioning cargoes. During the nine months ended September 30, 2019, 241 LNG cargoes were exported from the SPL Project, three of which were commissioning cargoes.

SPL Project
We are operating and constructing a six Train liquefaction project at the Sabine Pass LNG terminal adjacent to the existing regasification facilities (the “SPL Project”). Trains 1 through 5 are operational and Train 6 is under construction. Each Train is expected to have a nominal production capacity, which is prior to adjusting for planned maintenance, production reliability, potential overdesign, and debottlenecking opportunities, of approximately 4.5 mtpa of LNG and a run rate adjusted nominal production capacity of approximately 4.8 to 4.9 mtpa of LNG.
Distributions to Unitholders
We will pay a cash distribution per common and subordinated unit of $0.62 to unitholders of record as of November 7, 2019 and the related general partner distribution on November 14, 2019.





Investor Conference Call and Webcast
Cheniere Energy, Inc. will host a conference call to discuss its financial and operating results for the third quarter on Friday, November 1, 2019, 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, through its subsidiary, Sabine Pass Liquefaction, LLC (“Sabine Pass Liquefaction”), is developing, constructing, and operating natural gas liquefaction facilities at the Sabine Pass LNG terminal located in Cameron Parish, Louisiana, on the Sabine-Neches Waterway less than four miles from the Gulf Coast. Cheniere Partners, through Sabine Pass Liquefaction, is operating and constructing six Trains. Trains 1 through 5 are operational and Train 6 is under construction. Each Train is expected to have a nominal production capacity, which is prior to adjusting for planned maintenance, production reliability, potential overdesign, and debottlenecking opportunities, of approximately 4.5 mtpa of LNG and a run rate adjusted nominal production capacity of approximately 4.8 to 4.9 mtpa of LNG.

Through its wholly owned subsidiary, Sabine Pass LNG, L.P., Cheniere Partners owns and operates regasification facilities at the Sabine Pass LNG terminal, which includes pre-existing infrastructure of five LNG storage tanks with aggregate capacity of approximately 16.9 billion cubic feet equivalent, two marine berths that can each accommodate vessels with nominal capacity of up to 266,000 cubic meters and vaporizers with regasification capacity of approximately 4.0 Bcf/d. Cheniere Partners also owns a 94-mile pipeline that interconnects the Sabine Pass LNG terminal with a number of large interstate pipelines through its wholly owned subsidiary, Cheniere Creole Trail Pipeline, L.P.

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 September 30, 2019, filed with the Securities and Exchange Commission.

Forward-Looking Statements
This press release contains certain statements that may include “forward-looking statements.” All statements, other than statements of historical 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 expectations regarding regulatory authorizations and approvals, (iii) statements expressing beliefs and expectations regarding the development of Cheniere Partners’ LNG terminal and liquefaction business, (iv) statements regarding the business operations and prospects of third parties, (v) statements regarding potential financing arrangements, and (vi) statements regarding future discussions and entry into contracts. Although Cheniere Partners believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Cheniere Partners’ actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in Cheniere Partners’ periodic reports that are filed with and available from the Securities and Exchange Commission. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Other than as required under the securities laws, Cheniere Partners does not assume a duty to update these forward-looking statements.

 (Financial Tables Follow)







Cheniere Energy Partners, L.P.
Consolidated Statements of Income
(in millions, except per unit data)(1) 
(unaudited)

 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2019
 
2018
 
2019
 
2018
Revenues
 
 
 
 
 
 
 
LNG revenues
$
1,140

 
$
1,249

 
$
3,678

 
$
3,419

LNG revenues—affiliate
257

 
205

 
1,017

 
886

Regasification revenues
66

 
66

 
199

 
196

Other revenues
13

 
9

 
36

 
28

Total revenues
1,476

 
1,529

 
4,930

 
4,529

 
 
 
 
 
 
 
 
Operating costs and expenses
 
 
 
 
 
 
 
Cost of sales (excluding depreciation and amortization expense shown separately below)
742

 
756

 
2,501

 
2,291

Cost of sales—affiliate
6

 

 
6

 

Operating and maintenance expense
172

 
113

 
472

 
306

Operating and maintenance expense—affiliate
34

 
31

 
100

 
87

Development expense

 
1

 

 
2

General and administrative expense
3

 
3

 
9

 
9

General and administrative expense—affiliate
34

 
18

 
82

 
53

Depreciation and amortization expense
138

 
107

 
390

 
318

Impairment expense and loss on disposal of assets
1

 
8

 
6

 
8

Total operating costs and expenses
1,130

 
1,037

 
3,566

 
3,074

 
 
 
 
 
 
 
 
Income from operations
346

 
492

 
1,364

 
1,455

 
 
 
 
 
 
 
 
Other income (expense)
 
 
 
 
 
 
 
Interest expense, net of capitalized interest
(231
)
 
(183
)
 
(648
)
 
(552
)
Loss on modification or extinguishment of debt
(13
)
 
(12
)
 
(13
)
 
(12
)
Derivative gain, net

 
2

 

 
13

Other income
8

 
8

 
24

 
19

Total other expense
(236
)
 
(185
)
 
(637
)
 
(532
)
 
 
 
 
 
 
 
 
Net income
$
110

 
$
307

 
$
727

 
$
923

 
 
 
 
 
 
 
 
Basic and diluted net income per common unit
$
0.19

 
$
0.60

 
$
1.38

 
$
1.82

 
 
 
 
 
 
 
 
Weighted average number of common units outstanding used for basic and diluted net income per common unit calculation
348.6

 
348.6

 
348.6

 
348.6

 
 
 
 
 
(1)
Please refer to the Cheniere Energy Partners, L.P. Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, filed with the Securities and Exchange Commission.









Cheniere Energy Partners, L.P.
Consolidated Balance Sheets
(in millions, except unit data) (1) 
 
September 30,
 
December 31,
 
2019
 
2018
ASSETS
(unaudited)
 
 
Current assets
 
 
 
Cash and cash equivalents
$
1,707

 
$

Restricted cash
185

 
1,541

Accounts and other receivables
277

 
348

Accounts receivable—affiliate
67

 
114

Advances to affiliate
177

 
228

Inventory
103

 
99

Derivative assets
8

 
6

Other current assets
65

 
20

Total current assets
2,589

 
2,356

 
 
 
 
Property, plant and equipment, net
16,338

 
15,390

Operating lease assets, net
91

 

Debt issuance costs, net
17

 
13

Non-current derivative assets
29

 
31

Other non-current assets, net
157

 
184

Total assets
$
19,221

 
$
17,974

 
 
 
 
LIABILITIES AND PARTNERS’ EQUITY
 
 
 
Current liabilities
 
 
 
Accounts payable
$
17

 
$
15

Accrued liabilities
657

 
821

Due to affiliates
40

 
49

Deferred revenue
169

 
116

Deferred revenue—affiliate

 
1

Current operating lease liabilities
6

 

Derivative liabilities
29

 
66

Total current liabilities
918

 
1,068

 
 
 
 
Long-term debt, net
17,571

 
16,066

Non-current operating lease liabilities
84

 

Non-current derivative liabilities
32

 
14

Other non-current liabilities
4

 
4

Other non-current liabilities—affiliate
20

 
22

 
 
 
 
Partners’ equity
 
 
 
Common unitholders’ interest (348.6 million units issued and outstanding at September 30, 2019 and December 31, 2018)
1,692

 
1,806

Subordinated unitholders’ interest (135.4 million units issued and outstanding at September 30, 2019 and December 31, 2018)
(1,035
)
 
(990
)
General partner’s interest (2% interest with 9.9 million units issued and outstanding at September 30, 2019 and December 31, 2018)
(65
)
 
(16
)
Total partners’ equity
592

 
800

Total liabilities and partners’ equity
$
19,221

 
$
17,974

 
 
 
 
 
(1)
Please refer to the Cheniere Energy Partners, L.P. Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, filed with the Securities and Exchange Commission.






Reconciliation of Non-GAAP Measures

Regulation G Reconciliation

In addition to disclosing financial results in accordance with U.S. GAAP, the accompanying news release contains a non-GAAP financial measure. Adjusted EBITDA is a non-GAAP financial measure that is used to facilitate comparisons of operating performance across periods. This non-GAAP measure should be viewed as a supplement to and not a substitute for our U.S. GAAP measures of performance and the financial results calculated in accordance with U.S. GAAP, and the reconciliation from these results should be carefully evaluated.

Adjusted EBITDA is calculated by taking net income before interest expense, net of capitalized interest, changes in the fair value and settlement of our interest rate derivatives, taxes, depreciation and amortization, and adjusting for the effects of certain non-cash items, other non-operating income or expense items and other items not otherwise predictive or indicative of ongoing operating performance, including the effects of modification or extinguishment of debt and changes in the fair value of our commodity derivatives. 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 business performance. Management believes Adjusted EBITDA is widely used by investors to measure a company’s operating performance without regard to items such as interest expense, taxes, depreciation and amortization which vary substantially from company to company depending on capital structure, the method by which assets were acquired and depreciation policies. Further, the exclusion of certain non-cash items, other non-operating income or expense items and other items not otherwise predictive or indicative of ongoing operating performance enables comparability to prior period performance and trend analysis.

Adjusted EBITDA

The following table reconciles our Adjusted EBITDA to U.S. GAAP results for the three and nine months ended September 30, 2019 and 2018 (in millions):
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2019
 
2018
 
2019
 
2018
Net income
$
110

 
$
307

 
$
727

 
$
923

Interest expense, net of capitalized interest
231

 
183

 
648

 
552

Loss on modification or extinguishment of debt
13

 
12

 
13

 
12

Derivative gain, net

 
(2
)
 

 
(13
)
Other income
(8
)
 
(8
)
 
(24
)
 
(19
)
Income from operations
$
346

 
$
492

 
$
1,364

 
$
1,455

Adjustments to reconcile income from operations to Adjusted EBITDA:
 
 
 
 
 
 
 
Depreciation and amortization expense
138

 
107

 
390

 
318

Loss (gain) from changes in fair value of commodity derivatives, net
58

 
(10
)
 
(19
)
 
37

Impairment expense and loss on disposal of assets
1

 
8

 
6

 
8

Legal settlement expense

 
7

 

 
7

Adjusted EBITDA
$
543

 
$
604

 
$
1,741

 
$
1,825







Contacts
Cheniere Energy Partners, L.P.
Investors
 
Randy Bhatia
713-375-5479
Megan Light
713-375-5492
or
 
Media Relations
 
Eben Burnham-Snyder
713-375-5764
Jenna Palfrey
713-375-5491