For the quarter and year ended December 31, 2012, Cheniere Energy Partners, L.P. reported a net loss of $63.5 million and $150.1 million, respectively, compared to a net loss of $7.5 million and $31.0 million, respectively, for the same periods in 2011.
Results for the quarter and year ended December 31, 2012 were primarily impacted by increases in certain expenses related to the liquefaction facilities Cheniere is are developing and constructing at the Sabine Pass LNG terminal adjacent to the existing regasification facilities.
For the quarter and year ended December 31, 2012, results include significant items of $45.1 million and $82.8 million, respectively, related to development expenses primarily for the Liquefaction Project and losses due to the early extinguishment of debt. Excluding these significant items, the adjusted net loss for the quarter and year ended December 31, 2012 were $18.4 million and $67.3 million, respectively.
Overview of Recent Significant Events
2012 Results
Cheniere Partners reported income from operations of $19.6 million and $63.5 million for the quarter and year ended December 31, 2012, respectively, compared to income from operations of $37.0 million and $144.6 million for the comparable periods in 2011.
The decrease in income from operations of $17.4 million and $81.1 million for the quarter and year ended December 31, 2012, compared to the comparable periods in 2011, was primarily due to increased general and administrative costs incurred to manage the construction of the Liquefaction Project, decreased revenue, and increased operating and maintenance expense (including affiliate).
The general and administrative expenses incurred to manage the construction of the Liquefaction Project primarily resulted from a management services agreement entered into by Sabine Pass Liquefaction, in which Sabine Pass Liquefaction is paying to Cheniere Energy, Inc. a monthly fee based upon the capital expenditures incurred in the previous month for the Liquefaction Project.
These payments are being funded from proceeds received from the Liquefaction Project’s equity and debt financings. Revenues for the year ended December 31, 2012, compared to the comparable 2011 period, were impacted by decreased LNG cargo export loading fee revenue, decreased revenues earned under the variable capacity rights agreement with Cheniere Marketing, Inc., and a loss on LNG inventory needed to restore the heating value of vaporized LNG to meet natural gas pipeline specifications.
Increases in operating and maintenance expense (including affiliate expense) resulted from the loss incurred to purchase LNG to maintain the cryogenic readiness of the Sabine Pass LNG terminal and increased dredging services in 2012.
Liquefaction Project Update
Cheniere continues to make progress on the Liquefaction Project, which is being developed for up to six natural gas liquefaction trains (Trains), each with a nominal production capacity of approximately 4.5 mmtpa. The Trains are in various stages of development.
[mappress] LNG World News Staff, February 22, 2013