uploads/2015/07/CQP-TIMELINE1.png

Cheniere Energy Partners’ Important 2Q15 Developments

By

Updated

Key Development: FID on Train 5

Cheniere Energy Partners (CQP) announced on June 30 that it made a final investment decision, or FID, on the construction of Train 5 of its Sabine Pass liquefaction project. To fund this construction, CQP has entered into four credit facilities. These will replace its existing credit facilities, and the company will incur a debt up to ~$4.6 billion. According to a press release, these credit facilities take care of the development’s financing needs, construction costs, and other costs of placing the first five liquefaction trains of the Sabine Pass liquefaction project into service.

Below is a timeline of when these trains will commence service.

CQP TIMELINE

Article continues below advertisement

Trains 1 and 2

Construction on Trains 1 and 2 began in August 2012. Per Cheniere Energy Partners’ (CQP) recent press release in June, both the trains were ~90.8% complete as of May 31, 2015. Cheniere Energy Partners expects Train 1 to come online later this year.

Trains 3 and 4

Construction began in May 2013 for Trains 3 and 4. As per the June press release, both these trains were ~67.7% complete as of May 31, 2015. Cheniere Energy Partners expects Train 3 to come online in late 2016. It expects Train 4 to come online in late 2017

Trains 1–4 are fully contracted. Major customers include Total (TOT) and Chevron (CVX). CVX is a component of the iShares US Energy ETF (IYE). It makes up 11% of this ETF. It also makes up ~13% of the Energy Select Sector SPDR ETF (XLE)

Article continues below advertisement

Trains 5 and 6

Construction commenced on Train 5 in June. Regarding Train 6, the company said it had received all regulatory approvals to construct and operate the train.

Sales and purchase agreements

CQP has entered into six third-party LNG sales and purchase agreements, or SPAs, with third parties for Trains 1-5. These agreements total 19.75 million metric tonnes per annum, or mtpa, of LNG capacity. They will start in 2015, when the first LNG train commences. Each train will have a production capacity of approximately 4.5 mtpa of LNG. Train 1, which commences operations at the end of this year, will have an annual contract quantity of 286,500,000 MMBtu, or million British thermal units, of LNG.

Trains 2–4 will have an annual contract quantity of 182,500,000 MMBtu of LNG. Train 5 will have an annual contract quantity of 196,000,000 MMBtu of LNG.

You can read more about these SPAs in our Overview of Cheniere’s sale and purchase contracts.

Advertisement

More From Market Realist