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Cheniere Energy Partners’ Historical Revenues: Key Analysis

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Jul. 17 2015, Published 3:36 p.m. ET

2Q15 Estimates

For the second quarter of 2015, analysts are expecting Cheniere Energy Partners’ (CQP) revenues to come in at $68.1 million.

Between 1Q13 and 1Q15, CQP’s quarterly revenues have mostly been in line with—if not above—market expectations.

In this period, the company’s quarterly revenues have increased by 2.2%. However, from 1Q14 to 1Q15, its quarterly revenues barely increased by ~0.5%.

The 2Q15 revenue estimate of $68.1 million is 0.8% higher than the previous quarter’s revenues and 1% higher than the corresponding quarter’s revenues last year.

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Steady revenues

CQP’s revenues are relatively steady because of the long-term commercial contracts it entered into with Total Gas & Power, a subsidiary of Total SA (TOT), and Chevron (CVX). Under these contracts, or terminal use agreements (TUAs), the companies have reserved regasification capacities of approximately 1 Bcf/d (billion cubic feet per day) each at the Sabine Pass LNG Terminal, which is owned by CQP. Under this agreement, both companies are obligated to make monthly payments to Sabine Pass LNG amounting to approximately ~$253 million annually for 20 years, beginning in 2009. This steady flow of payments is a major reason for CQP’s steady revenues. The remaining 2 Bcf/d of the 4bcf/d regasification facility has been reserved under a TUA by Sabine Pass Liquefaction, which is owned by CQP. Under this agreement, Sabine Pass Liquefaction is obligated to make monthly payments to Sabine Pass LNG amounting to approximately $250 million annually for 20 years after SPL delivers its first commercial cargo at the liquefaction project.

Plus, Chienere’s revenues are expected to take off early next year, following the start of CQP’s Train 1 later this year.

CQP’s parent company, Cheniere Energy (LNG), and CVX are components of the iShares U.S. Energy ETF (IYE). They make up 12% of the ETF.

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