Final Investment Decision reached on Sabine Pass Train 6 and Full
Notice to Proceed issued to Bechtel
Run-rate production guidance increased to 4.8 – 4.9 mtpa per Train
Run-rate distributable cash flow per unit guidance increased to $3.70
HOUSTON–(BUSINESS WIRE)–Cheniere Energy Partners, L.P. (“Cheniere Partners”) (NYSE American:
CQP) announced today that the Board of Directors of its general partner
has made a positive Final Investment Decision (“FID”) with respect to
Train 6 at the Sabine Pass liquefaction project (“SPL Project”) in
Cameron Parish, Louisiana, and Cheniere Partners has issued full notice
to proceed with construction to Bechtel Oil, Gas and Chemicals, Inc.
To fund a portion of the construction of Train 6, a third LNG berth, and
required supporting infrastructure at the SPL Project, Cheniere Partners
has entered into 5-year, $1.5 billion senior secured credit facilities
with 29 banks and financial institutions in a transaction that closed on
May 29, 2019. The facilities include a $750 million delayed draw term
loan and a $750 million revolving credit facility. SG Americas
Securities, LLC acted as financial advisor to Cheniere Partners for the
transaction, and MUFG Bank, Ltd. acted as Sole Coordinating Lead
Cheniere Partners has also raised its run-rate production guidance to
4.8 – 4.9 million tonnes per annum (“mtpa”) per Train, up from 4.5 – 4.9
mtpa per Train. The increase in run-rate production is based on the
impact of production optimization, maintenance optimization, and
debottlenecking projects at the SPL Project.
Incorporating the impact of Sabine Pass Train 6 and increased run-rate
production guidance, Cheniere Partners has revised its run-rate
distributable cash flow per unit guidance to $3.70 – $3.90 annually, up
from $3.30 – $3.60 annually.
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, plans to construct six Trains, which are in various
stages of development, construction, and operations. 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 March 31, 2019,
filed with the Securities and Exchange Commission.
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
Reconciliation of Non-GAAP Measures
Regulation G Reconciliations
The accompanying news release contains non-GAAP financial measures.
Distributable Cash Flow per Unit is a non-GAAP financial measure that we
use 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 reconciliations from
these results should be carefully evaluated.
Distributable Cash Flow is defined as net income, adjusted for certain
non-cash items, less maintenance capital expenditures. Non-cash items
include depreciation, depletion and amortization, non-cash compensation
expense, gains and losses on disposals of assets, the allowance for
equity funds used during construction, unrealized gains and losses on
commodity risk management activities, non-cash impairment charges,
losses on extinguishments of debt and deferred income taxes. Unrealized
gains and losses on commodity risk management activities includes
unrealized gains and losses on commodity derivatives and inventory fair
value adjustments (excluding lower of cost or market adjustments).
Distributable Cash Flow per Unit is calculated by dividing Distributable
Cash Flow, adjusted for the General Partner’s Interest and Incentive
Distribution Rights, by the weighted average number of units outstanding.
We believe Distributable Cash Flow is a useful performance measure for
management, investors and other users of our financial information to
evaluate our performance and to measure and estimate the ability of our
assets to generate cash earnings after servicing our debt, paying cash
taxes and expending sustaining capital, that could be used for
discretionary purposes such as distributions, stock repurchases,
retirement of debt, or expansion capital expenditures. Management uses
this measure and believes it provides users of our financial statements
a useful measure reflective of our business’s ability to generate cash
earnings to supplement the comparable GAAP measure. Distributable Cash
Flow is not intended to represent cash flows from operations or net
income (loss) as defined by U.S. GAAP and is not necessarily comparable
to similarly titled measures reported by other companies.
Non-GAAP measures have limitations as an analytical tool and should not
be considered in isolation or in lieu of an analysis of our results as
reported under GAAP and should be evaluated only on a supplementary
We have not made any forecast of net income on a run rate basis, which
would be the most directly comparable financial measure under GAAP, and
we are unable to reconcile differences between run rate Distributable
Cash Flow per Unit and net income.
Cheniere Energy Partners, L.P.
Randy Bhatia 713-375-5479
Jenna Palfrey 713-375-5491