Cheniere posts USD 267.7 mln Q1 loss

Houston-based LNG player Cheniere Energy reported a net loss of $267.7 million for the three months ended March 31, 2015, compared to a net loss of $97.8 million for the comparable 2014 period.

Significant items contributing to losses of $231.0 million for the three months ended March 31, 2015 are related to derivative losses due primarily to contingent interest rate derivatives entered into and changes in long-term LIBOR during the period, losses on early extinguishment of debt related to the write-off of debt issuance costs by Sabine Pass Liquefaction in connection with the refinancing of a portion of its credit facilities in March 2015, and for development expenses primarily for the liquefaction facilities being developed by the company near Corpus Christi, Texas, Cheniere said in a statement.

Sabine Pass Liquefaction project

Cheniere continues to make progress on the Liquefaction project, which is being developed for up to six trains, each with an expected nominal production capacity of approximately 4.5 million tonnes per annum, at the Sabine Pass LNG terminal adjacent to the existing regasification facilities.

The Trains are in various stages of development.

• Construction on Trains 1 and 2 began in August 2012, and as of March 31, 2015, the overall project completion percentage for Trains 1 and 2 was approximately 87.2%, which is ahead of the contractual schedule. Based on the current construction schedule, Cheniere anticipates that Train 1 will produce LNG as early as late 2015.
• Construction on Trains 3 and 4 began in May 2013, and as of March 31, 2015, the overall project completion percentage for Trains 3 and 4 was approximately 62.6%, which is ahead of the contractual schedule. The company expects Trains 3 and 4 to become operational in late 2016 and 2017, respectively.
• Trains 5 and 6 are under development. Cheniere has entered into SPAs for approximately 3.75 mtpa in aggregate that commence with the date of first commercial delivery for Train 5. The company has received authorizations from the DOE to export 503 Bcf per year of LNG volumes from Trains 5 and 6 to free trade agreement countries. Authorization to export LNG to non-FTA countries is pending. In April 2015, Cheniere Partners received FERC authorization to site, construct, and operate Trains 5 and 6.

The company is looking to make a final investment decision to commence construction of Trains 5 and 6 based upon, among other things, entering into EPC contracts, entering into acceptable commercial arrangements, receiving all regulatory approvals and obtaining adequate financing. Construction on Train 5 is expected to commence upon receiving all regulatory approvals and obtaining financing followed by Train 6 upon entering into acceptable commercial arrangements, receiving all regulatory approvals and obtaining financing.

Corpus Christi Liquefaction project

Cheniere continues to make progress on the development of the Corpus Christi Liquefaction project, which is being designed for up to three Trains with expected aggregate nominal production capacity of approximately 13.5 mtpa of LNG.

• To date Cheniere has entered into SPAs aggregating approximately 7.6 mtpa of LNG volumes commencing with Trains 1 and 2, and approximately 0.8 mtpa of LNG volumes commencing with Train 3.
• In December 2014, the company received authorization from the FERC to site, construct, and operate the Corpus Christi Liquefaction project. Subsequent to the issuance of the authorization, the FERC received a rehearing request and has not yet ruled on this request. Cheniere has received authorization from the U.S. Department of Energy to export up to approximately 767 Bcf per year of domestically produced LNG to FTA countries. Authorization from the DOE to export LNG to non-FTA countries is pending.

Cheniere is looking to make a final investment decision to commence construction of the Corpus Christi Liquefaction project based upon, among other things, entering into acceptable commercial arrangements, receiving all regulatory approvals and obtaining adequate financing. To date, Cheniere has obtained financing commitments sufficient to support the financing of all three Trains. The remaining regulatory approvals are expected to be received during the first half of 2015. The construction on the first two Trains is expected to start in due course upon receiving all regulatory approvals followed by the third Train upon entering into additional sale and purchase agreements.

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Image: Cheniere