Summary
Cheniere Energy Partners, L.P. (the "Partnership"), the master limited partnership through which Cheniere Energy, Inc. operates its Sabine Pass LNG terminal, announced amendments to its Agreement of Limited Partnership. These changes, effective February 14, 2017, primarily aim to ensure economic and tax uniformity for common units that may be issued upon the conversion of Class B Units. This uniformity is achieved by adjusting allocation provisions for Partnership items, retroactively applied from January 1, 2016. Additionally, the amendments clarify the earliest date upon which Class B Units can be converted into common units. Specifically, mandatory conversion is now deferred until after the "Train 3 Substantial Completion Date" and the Partnership's first distribution of "Available Cash" from "Operating Surplus." This conversion will not occur earlier than the business day following the record date for the quarter ended June 30, 2017, providing a clearer timeline for unitholders and potentially impacting the dilution of common units.
Key Highlights
- 1Amendment to Agreement of Limited Partnership for Cheniere Energy Partners, L.P.
- 2Focus on economic and tax uniformity for common units issuable from Class B Unit conversions.
- 3Allocation provisions amended to include Class B Units for Partnership items, effective January 1, 2016.
- 4Clarification of Class B Unit conversion mechanics.
- 5Mandatory conversion of Class B Units deferred until after Train 3 Substantial Completion and initial Operating Surplus distribution.
- 6Earliest possible conversion date is post-Q2 2017 distribution.
- 7These changes are designed to align tax and economic treatment for unitholders.