01—Abstract
Summary
Summary of the 10-Q filed August 8, 2024. Cited figures are marked; the original filing is the authoritative source.
Cheniere Energy Partners, L.P.
(CQP) reported net income of $570 milliona for the three months ended June 30, 2024, compared with $622 million a year earlier, and $1.25 billion for the six months ended June 30, 2024, compared with $2.56 billion in the prior-year period. Total revenues were $1.89 billion for the quarter and $4.19 billion for the six months, versus $4.85 billion a year earlier. The filing attributes the six-month decline in earnings mainly to unfavorable changes in fair value and settlements of derivatives, principally tied to the Tourmaline IPM agreement, and to lower Henry Hub-linked pricing.
Basic and diluted net income per common unit was $0.95b for the quarter and $2.13 for the six months. Liquidity at June 30, 2024 totaled $2.18 billion, including $351 million of cash and cash equivalents and $1.76 billion of available credit facility commitments. Total debt was $15.73 billion.
During May and June 2024, CQP issued $1.2 billionc of 5.750% Senior Notes due 2034 and used the proceeds, together with cash on hand, to retire $1.2 billion of SPL's 5.625% Senior Secured Notes due 2025. Moody's upgraded CQP's issuer credit rating to Baa2 from Ba1 in connection with that issuance.
The partnership declared a second-quarter 2024 distribution of $0.810d per common unit, payable August 14, 2024. The filing also describes the SPL Expansion Project, for which subsidiaries submitted FERC and DOE applications in February 2024, and states that the partnership had contracted approximately 80% of anticipated Liquefaction Project production with about 14 years of weighted average remaining life as of June 30, 2024.
02—Key points
Key Highlights
- Net income was $570 million for Q2 2024 versus $622 million in Q2 2023; six-month net income fell to $1.25 billion from $2.56 billion, driven mainly by derivative fair value changes.
- Total revenues were $1.89 billion for Q2 2024 and $4.19 billion for the six months, down from $4.85 billion in the prior-year six-month period, reflecting lower pricing per MMBtu from declining Henry Hub prices.
- Total liquidity was $2.18 billion at June 30, 2024, including $351 million of cash and $1.76 billion of available credit facility commitments.
- CQP issued $1.2 billion of 5.750% Senior Notes due 2034 in May 2024 and used the proceeds with cash on hand to retire $1.2 billion of SPL's 5.625% Senior Secured Notes due 2025.
- Moody's upgraded CQP's issuer credit rating to Baa2 from Ba1 and SPL's to Baa1 from Baa2, both with stable outlooks.
- Approximately 80% of anticipated Liquefaction Project production is contracted, with about 14 years of weighted average remaining life as of June 30, 2024.
- Partners' deficit was $(756) million at June 30, 2024, and a $0.810 per common unit distribution was declared for Q2 2024, payable August 14, 2024.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2024filed August 8, 2024Financial Statements
Q2 FY2024 against Q2 FY2023
| Line item | Q2 FY2024Q2 FY2023 | Change |
|---|---|---|
| Revenue | $1.89B$1.93B | −2.0% |
| Operating Expenses | $1.13B$1.11B | +1.2% |
| Operating Income | $766.00M$818.00M | −6.4% |
| Interest Expense | $202.00M$207.00M | −2.4% |
| Net Income | $570.00M$622.00M | −8.4% |
05—Questions
Frequently Asked Questions
Why did net income decline so sharply in the first half of 2024?
The filing states that substantially all of the $1.3 billion six-month decline in net income was attributable to unfavorable changes in fair value and settlements of derivatives, principally related to the Tourmaline IPM agreement, where associated gains fell from $1.2 billion in the first half of 2023 to $205 million in the first half of 2024. Revenues also declined due to lower Henry Hub-linked pricing.
How much debt does CQP have and how did it change?
Total debt was $15.73 billion at June 30, 2024, compared with $16.03 billion at December 31, 2023. The change reflected the issuance of $1.2 billion of 5.750% Senior Notes due 2034 and the retirement of $1.2 billion of SPL's 2025 notes and $300 million of SPL's 2024 notes.
What is the status of the SPL Expansion Project?
The filing states that in February 2024 certain subsidiaries applied to FERC under the Natural Gas Act to site, construct and operate the SPL Expansion Project, with up to approximately 20 mtpa of production capacity, and applied to the DOE for export authorization to FTA and non-FTA countries. A positive final investment decision will require acceptable commercial and financing arrangements.
What distributions have been declared to unitholders?
On July 26, 2024, CQP declared a cash distribution of $0.810 per common unit for the second quarter of 2024, to unitholders of record as of August 7, 2024, payable August 14, 2024. It consists of a base amount of $0.775 per unit and a variable amount of $0.035 per unit.
What are the main liquidity sources available to CQP?
At June 30, 2024, available liquidity totaled $2.18 billion, consisting of $351 million of cash and cash equivalents, $68 million of restricted cash designated for the Liquefaction Project, $762 million available under the SPL Revolving Credit Facility, and $1.0 billion available under the CQP Revolving Credit Facility.
06—Continue