Cheniere Energy Partners LP (CQP, Financial) filed Quarterly Report for the period ended 2009-03-31.
CHENIERE ENERGY PARTNERS L.P. is a Delaware limited partnership recently formed by Cheniere Energy Inc. through its wholly owned subsidiary Sabine Pass LNG L.P. CEP will develop own and operate the Sabine Pass LNG receiving terminal currently under construction in western Cameron Parish Louisiana on the Sabine Pass Channel. CEP's primary business objectives are to complete construction of the Sabine Pass LNG receiving terminal and thereafter to generate stable cash flows sufficient to pay the initial quarterly distribution to the unitholders and over time to increase their quarterly cash distribution. Cheniere Energy Partners LP has a market cap of $179.6 million; its shares were traded at around $6.8 with and P/S ratio of 5.6. The dividend yield of Cheniere Energy Partners LP stocks is 25.1%.
In November 2006, Sabine Pass LNG issued an aggregate principal amount of $2,032.0 million of Senior Secured Notes consisting of $550.0 million of 7 1/4% Senior Secured Notes due 2013 (the 2013 Notes) and $1,482.0 million of 7 1/2% Senior Secured Notes due 2016 (the 2016 Notes and collectively with the 2013 Notes, the Senior Notes). In September 2008, Sabine Pass LNG completed an additional $183.5 million, before discount, of 2016 Notes whose terms were identical to the previously outstanding 2016 Notes. Under the indenture governing the Senior Notes (the Sabine Pass Indenture), a portion of the proceeds from the Senior Notes is required to be used for scheduled interest payments and to fund the cost to complete construction of the Sabine Pass LNG receiving terminal. Due to these restrictions imposed by the Sabine Pass Indenture, the proceeds are not presented as cash and cash equivalents. Therefore, when proceeds from the Senior Notes are used, they are presented as a source of cash and cash equivalents. In the three months ended March 31, 2009 and 2008, the $224.7 million and $159.5 million, respectively, of restricted cash and cash equivalents were primarily used to pay for scheduled interest payments and construction activities at the Sabine Pass LNG receiving terminal. In addition, $76.3 million of restricted cash was used by Sabine Pass LNG in the first quarter of 2009 to fund the distribution to us.
As of March 31, 2009, we had $169.9 million of cash and cash equivalents and $170.1 million of restricted cash and cash equivalents and U.S. Treasury securities. The $169.9 million of cash and cash equivalents is held in our subsidiary Sabine Pass LNG. The restricted cash and cash equivalents and U.S. Treasury securities were designated for the following purposes: $137.3 million for interest payments related to the Senior Notes and $32.8 million held in a distribution reserve account for quarterly distribution payments.
Sabine Pass LNG has issued an aggregate principal amount of $2,215.5 million of Senior Notes consisting of $550.0 million of 7 1/4% Senior Secured Notes due 2013 and $1,665.5 million of 7 1/2% Senior Secured Notes due 2016. Interest on the Senior Notes is payable semi-annually in arrears on May 30 and November 30 of each year. The Senior Notes are secured on a first-priority basis by a security interest in all of Sabine Pass LNGs equity interests and substantially all of its operating assets. Under the Sabine Pass Indenture governing the Senior Notes, except for permitted tax distributions, Sabine Pass LNG may not make distributions until certain conditions are satisfied. There must be on deposit in an interest payment account an amount equal to one-sixth of the semi-annual interest payment multiplied by the number of elapsed months since the last semi-annual interest payment. In addition, there must be on deposit in a permanent debt service reserve fund an amount equal to one semi-annual interest payment of approximately $82.4 million. Distributions are permitted only after satisfying the foregoing funding requirements, a fixed charge coverage ratio test of 2:1 and other conditions specified in the Sabine Pass Indenture. During the three months ended March 31, 2009, Sabine Pass LNG made a distribution of $76.3 million to us after satisfying all the applicable conditions in the Sabine Pass Indenture.
Our consolidated net income was $13.6 million for the three months ended March 31, 2009 compared to a net loss of $14.5 million for the three months ended March 31, 2008. The increase in consolidated net income was the result of commencement of revenues under the Cheniere Marketing TUA beginning October 1, 2008. Sabine Pass LNG had $62.5 million of LNG TUA revenue from Cheniere Marketing in the first quarter of 2009.
On behalf of Sabine Pass LNG, Cheniere Marketing has entered into exchange cleared NYMEX natural gas swaps accounted for as derivatives. The NYMEX natural gas swaps were entered into to hedge the exposure to variability in expected future cash flows related to commissioning cargoes purchased by Cheniere Marketing in 2008 that are expected to be sold as part of the testing phase of the commissioning process. As of March 31, 2009, Cheniere Marketing, on behalf of Sabine Pass LNG, had entered into a total of 3,125,000 MMBtu of NYMEX natural gas swaps through October 31, 2009 for which it will receive fixed prices of $3.75 to $7.42 per MMBtu. At March 31, 2009, the value of the derivatives was an asset of $1.5 million.
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CHENIERE ENERGY PARTNERS L.P. is a Delaware limited partnership recently formed by Cheniere Energy Inc. through its wholly owned subsidiary Sabine Pass LNG L.P. CEP will develop own and operate the Sabine Pass LNG receiving terminal currently under construction in western Cameron Parish Louisiana on the Sabine Pass Channel. CEP's primary business objectives are to complete construction of the Sabine Pass LNG receiving terminal and thereafter to generate stable cash flows sufficient to pay the initial quarterly distribution to the unitholders and over time to increase their quarterly cash distribution. Cheniere Energy Partners LP has a market cap of $179.6 million; its shares were traded at around $6.8 with and P/S ratio of 5.6. The dividend yield of Cheniere Energy Partners LP stocks is 25.1%.
Highlight of Business Operations:
Following the achievement of commercial operability of the Sabine Pass LNG receiving terminal in September 2008, Sabine Pass LNG began receiving capacity reservation fee payments from Cheniere Marketing, LLC (Cheniere Marketing), formerly Cheniere Marketing, Inc., a wholly-owned subsidiary of Cheniere, under its terminal use agreement (TUA). In December 2008, Cheniere Marketing paid Sabine Pass LNG capacity reservation fee payments of $62.7 million for the three-month period ended March 31, 2009. In March 2009, Cheniere Marketing paid Sabine Pass LNG capacity reservation fee payments of $62.4 million for the three-month period ending June 30, 2009. Also, Sabine Pass LNG began receiving capacity reservation fee payments from Total LNG USA, Inc. (Total) under its TUA in March 2009, when Total made its first monthly capacity reservation fee payment of $10.3 million for April 2009 capacity.In November 2006, Sabine Pass LNG issued an aggregate principal amount of $2,032.0 million of Senior Secured Notes consisting of $550.0 million of 7 1/4% Senior Secured Notes due 2013 (the 2013 Notes) and $1,482.0 million of 7 1/2% Senior Secured Notes due 2016 (the 2016 Notes and collectively with the 2013 Notes, the Senior Notes). In September 2008, Sabine Pass LNG completed an additional $183.5 million, before discount, of 2016 Notes whose terms were identical to the previously outstanding 2016 Notes. Under the indenture governing the Senior Notes (the Sabine Pass Indenture), a portion of the proceeds from the Senior Notes is required to be used for scheduled interest payments and to fund the cost to complete construction of the Sabine Pass LNG receiving terminal. Due to these restrictions imposed by the Sabine Pass Indenture, the proceeds are not presented as cash and cash equivalents. Therefore, when proceeds from the Senior Notes are used, they are presented as a source of cash and cash equivalents. In the three months ended March 31, 2009 and 2008, the $224.7 million and $159.5 million, respectively, of restricted cash and cash equivalents were primarily used to pay for scheduled interest payments and construction activities at the Sabine Pass LNG receiving terminal. In addition, $76.3 million of restricted cash was used by Sabine Pass LNG in the first quarter of 2009 to fund the distribution to us.
As of March 31, 2009, we had $169.9 million of cash and cash equivalents and $170.1 million of restricted cash and cash equivalents and U.S. Treasury securities. The $169.9 million of cash and cash equivalents is held in our subsidiary Sabine Pass LNG. The restricted cash and cash equivalents and U.S. Treasury securities were designated for the following purposes: $137.3 million for interest payments related to the Senior Notes and $32.8 million held in a distribution reserve account for quarterly distribution payments.
Sabine Pass LNG has issued an aggregate principal amount of $2,215.5 million of Senior Notes consisting of $550.0 million of 7 1/4% Senior Secured Notes due 2013 and $1,665.5 million of 7 1/2% Senior Secured Notes due 2016. Interest on the Senior Notes is payable semi-annually in arrears on May 30 and November 30 of each year. The Senior Notes are secured on a first-priority basis by a security interest in all of Sabine Pass LNGs equity interests and substantially all of its operating assets. Under the Sabine Pass Indenture governing the Senior Notes, except for permitted tax distributions, Sabine Pass LNG may not make distributions until certain conditions are satisfied. There must be on deposit in an interest payment account an amount equal to one-sixth of the semi-annual interest payment multiplied by the number of elapsed months since the last semi-annual interest payment. In addition, there must be on deposit in a permanent debt service reserve fund an amount equal to one semi-annual interest payment of approximately $82.4 million. Distributions are permitted only after satisfying the foregoing funding requirements, a fixed charge coverage ratio test of 2:1 and other conditions specified in the Sabine Pass Indenture. During the three months ended March 31, 2009, Sabine Pass LNG made a distribution of $76.3 million to us after satisfying all the applicable conditions in the Sabine Pass Indenture.
Our consolidated net income was $13.6 million for the three months ended March 31, 2009 compared to a net loss of $14.5 million for the three months ended March 31, 2008. The increase in consolidated net income was the result of commencement of revenues under the Cheniere Marketing TUA beginning October 1, 2008. Sabine Pass LNG had $62.5 million of LNG TUA revenue from Cheniere Marketing in the first quarter of 2009.
On behalf of Sabine Pass LNG, Cheniere Marketing has entered into exchange cleared NYMEX natural gas swaps accounted for as derivatives. The NYMEX natural gas swaps were entered into to hedge the exposure to variability in expected future cash flows related to commissioning cargoes purchased by Cheniere Marketing in 2008 that are expected to be sold as part of the testing phase of the commissioning process. As of March 31, 2009, Cheniere Marketing, on behalf of Sabine Pass LNG, had entered into a total of 3,125,000 MMBtu of NYMEX natural gas swaps through October 31, 2009 for which it will receive fixed prices of $3.75 to $7.42 per MMBtu. At March 31, 2009, the value of the derivatives was an asset of $1.5 million.
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