01—Abstract
Summary
Summary of the 10-Q filed October 31, 2024. Cited figures are marked; the original filing is the authoritative source.
Cheniere Energy Partners, L.P.
(CQP) reported third-quarter 2024 net income of $635 milliona, down from $791 million in the same period of 2023, and nine-month net income of $1.89 billion versus $3.35 billion a year earlier. Total revenues were $2.06 billion for the quarter (versus $2.13 billion) and $6.24 billion for the nine months (versus $6.98 billion). The filing attributes the decline mainly to unfavorable changes in fair value of derivatives, principally tied to the IPM agreement with Tourmaline Oil Marketing Corp, and to lower Henry Hub pricing, partly offset by higher production volumes.
Net income per common unit was $1.08b for the quarter and $3.21 for the nine months. Liquidity remained substantial at $2.18 billion of total available liquidity as of September 30, 2024, including $331 million of cash and cash equivalents and $1.77 billion of available revolver commitments. Total debt was $15.58 billion, and the partnership issued $1.2 billion of 5.750% Senior Notes due 2034, using the proceeds to retire SPL's 2025 senior secured notes.
Partners' deficit narrowed to $(626) million from $(784) million at December 31, 2023. On October 25, 2024, the partnership declared a $0.810c per common unit distribution for the third quarter.
The filing also notes that the DOE authorization to export LNG to FTA countries was received in October 2024 for the SPL Expansion Project, whose FERC application was submitted in February 2024. Approximately 80%d of anticipated Liquefaction Project production is contracted, with about 14 years of weighted average remaining life.
02—Key points
Key Highlights
- Q3 2024 net income was $635 million versus $791 million in Q3 2023; nine-month net income was $1.89 billion versus $3.35 billion.
- Q3 2024 total revenues were $2.06 billion versus $2.13 billion; nine-month revenues were $6.24 billion versus $6.98 billion.
- Derivative fair value changes drove much of the decline, including $1.5 billion of nine-month unfavorable changes tied to the IPM agreement with Tourmaline Oil Marketing Corp (the filing shows $238 million in 2024 versus $1.5 billion in 2023 for that agreement).
- Available liquidity was $2.18 billion at September 30, 2024, including $331 million of cash and $1.77 billion of undrawn revolver commitments.
- CQP issued $1.2 billion of 5.750% Senior Notes due 2034 and used the proceeds to retire $1.2 billion of SPL's 5.625% Senior Secured Notes due 2025; Moody's upgraded CQP to Baa2.
- Partners' deficit improved to $(626) million from $(784) million at December 31, 2023.
- A distribution of $0.810 per common unit was declared on October 25, 2024 for Q3 2024, and the DOE authorized LNG exports to FTA countries in October 2024 for the SPL Expansion Project.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2024filed October 31, 2024Financial Statements
Q3 FY2024 against Q3 FY2023
| Line item | Q3 FY2024Q3 FY2023 | Change |
|---|---|---|
| Revenue | $2.06B$2.13B | −3.4% |
| Operating Expenses | $1.23B$1.14B | +7.7% |
| Operating Income | $827.00M$988.00M | −16.3% |
| Net Income | $635.00M$791.00M | −19.7% |
05—Questions
Frequently Asked Questions
Why did net income decline year over year?
The decline was primarily due to unfavorable changes in fair value of derivatives of $215 million in the third quarter and $1.6 billion for the nine months. The filing attributes this mainly to the IPM agreement with Tourmaline Oil Marketing Corp and to an unfavorable shift in long-term U.S. natural gas forward prices. Lower Henry Hub pricing also reduced revenues, partly offset by higher production volumes.
How much liquidity does the partnership have?
As of September 30, 2024, total available liquidity was $2.18 billion, consisting of $331 million in cash and cash equivalents, $80 million of restricted cash designated for the Liquefaction Project, $766 million available under the SPL Revolving Credit Facility, and $1.0 billion available under the CQP Revolving Credit Facility.
What was the distribution declared for the third quarter of 2024?
On October 25, 2024, the partnership declared a cash distribution of $0.810 per common unit for the third quarter of 2024, payable November 14, 2024 to unitholders of record as of November 4, 2024. It consists of a base amount of $0.775 per unit and a variable amount of $0.035 per unit.
What is the status of the SPL Expansion Project?
The partnership is developing an expansion with total production capacity of up to approximately 20 mtpa of LNG. In February 2024, subsidiaries applied to FERC for siting and construction authorization and to DOE for export authorization. In October 2024, DOE authorization to export LNG to FTA countries was received. The filing states that a positive FID will require acceptable commercial and financing arrangements.
How did the debt position change?
Total debt was $15.58 billion at September 30, 2024, compared with $16.03 billion at December 31, 2023. During the nine months, CQP issued $1.2 billion of 5.750% Senior Notes due 2034, and SPL repaid $450 million of senior secured notes. The company was in compliance with all debt covenants as of September 30, 2024.
06—Continue