01—Abstract
Summary
Summary of the 10-Q filed May 3, 2024. Cited figures are marked; the original filing is the authoritative source.
Cheniere Energy Partners, L.P.
(CQP) reported net income of $682 milliona for the three months ended March 31, 2024, down from $1,935 million in the same period of 2023, and basic and diluted net income per common unit of $1.18 versus $3.50. Total revenues fell to $2,295 million from $2,917 million, driven primarily by an $731 million decrease from lower pricing per MMBtu tied to decreased Henry Hub pricing, partially offset by a $104 million increase from higher production volume. The filing attributes the net income decline substantially to a $1.2 billion unfavorable change in fair value and settlements of derivatives, mainly due to a much smaller gain on the Tourmaline IPM Agreement ($6 million in 2024 versus $1.0 billion in 2023).
Liquidity remained substantial, with total available liquidity of $2.12 billionb at March 31, 2024, comprising $333 million of cash and cash equivalents, $59 million of restricted cash, and $1.73 billion of available revolving credit commitments. Total debt was $15.88 billion, and SPL prepaid $150 million of its 5.750% Senior Secured Notes due 2024 in March 2024. Net cash provided by operating activities was $669 million, compared with $847 million a year earlier.
The partnership declared a first-quarter 2024 distribution of $0.810c per common unit, consisting of a base amount of $0.775 and a variable amount of $0.035. The filing also notes that approximately 85% of anticipated Liquefaction Project production is contracted, with about 14 years of weighted average remaining life. In February 2024, subsidiaries applied to FERC and the DOE for the SPL Expansion Project, which would add up to approximately 20 mtpa of liquefaction capacity, with a positive final investment decision still subject to commercial and financing arrangements.
02—Key points
Key Highlights
- Net income was $682 million for Q1 2024 versus $1,935 million in Q1 2023; net income per common unit was $1.18 versus $3.50.
- Total revenues declined to $2,295 million from $2,917 million, mainly due to a $731 million decrease from lower pricing per MMBtu linked to decreased Henry Hub pricing.
- Derivative-related gains fell sharply: the Tourmaline IPM Agreement gain dropped from $1.0 billion to $6 million, accounting for substantially all of the $1.2 billion unfavorable derivative variance.
- Total available liquidity was $2.12 billion at March 31, 2024, including $333 million of cash and $1.73 billion of available revolver commitments.
- Total debt was $15.88 billion at March 31, 2024, and SPL prepaid $150 million of its 2024 Senior Secured Notes in March 2024.
- Operating cash flow was $669 million for Q1 2024 versus $847 million in Q1 2023; distributions paid were $720 million.
- Approximately 85% of anticipated Liquefaction Project production is contracted, with about 14 years of weighted average remaining life; the SPL Expansion Project (up to about 20 mtpa) was submitted to FERC and DOE in February 2024.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2024filed May 3, 2024Financial Statements
Q1 FY2024 against Q1 FY2023
| Line item | Q1 FY2024Q1 FY2023 | Change |
|---|---|---|
| Revenue | $2.29B$2.92B | −21.3% |
| Operating Expenses | $1.42B$788.00M | +80.2% |
| Operating Income | $875.00M$2.13B | −58.9% |
| Interest Expense | $202.00M$208.00M | −2.9% |
| Net Income | $682.00M$1.94B | −64.8% |
05—Questions
Frequently Asked Questions
Why did net income decline so sharply in the first quarter of 2024?
The filing states that substantially all of the $1.3 billion decline in net income was attributable to unfavorable changes in fair value and settlements of derivatives of $1.2 billion. The main driver was the Tourmaline IPM Agreement gain, which fell from $1.0 billion in Q1 2023 to $6 million in Q1 2024 due to moderating volatility in international gas prices. Excluding these derivative changes, LNG revenues net of cost of sales were described as relatively consistent between periods.
How much cash did the partnership have available to meet its obligations?
As of March 31, 2024, total available liquidity was $2.12 billion, consisting of $333 million in cash and cash equivalents, $59 million of restricted cash designated for the Liquefaction Project, $728 million available under the SPL Revolving Credit Facility, and $1.0 billion available under the CQP Revolving Credit Facility.
What distribution was declared for the first quarter of 2024?
On April 29, 2024, the partnership declared a cash distribution of $0.810 per common unit to unitholders of record as of May 9, 2024, payable with the related general partner distribution on May 15, 2024. The distribution consists of a base amount of $0.775 per unit and a variable amount of $0.035 per unit.
What is the outlook for future growth?
In February 2024, certain subsidiaries submitted applications to FERC under the Natural Gas Act and to the DOE for LNG export authorization for the SPL Expansion Project, which is planned to have total production capacity of up to approximately 20 mtpa including estimated debottlenecking. The filing states that development will require acceptable commercial and financing arrangements before a positive final investment decision is made.
How much of the terminal's future production is already contracted?
Through SPAs and an IPM agreement, the partnership has contracted approximately 85% of the total anticipated production from the Liquefaction Project, with approximately 14 years of weighted average remaining life as of March 31, 2024. Total unsatisfied transaction price for revenues was $48.4 billion as of March 31, 2024.
06—Continue