Cheniere Energy begins LNG exports, continues to build out Sabine Pass, Corpus Christi projects

Sabine Pass LNG terminal.

Sabine Pass LNG terminal will have 6 trains, Corpus Christi LNG Terminal will have 3 trains

Cheniere Energy, Inc. says it continues to transition from a development to an operating company, as the company reported a net loss of $298.4 million ($1.31 per share, basic and diluted), for the three months ended June 30.

Jack Fusco, Cheniere Energy CEO.

That compared to a net loss of $118.5 million, or $0.52 per share (basic and diluted), for the comparable 2015 period. For the six months ended June 30, Cheniere reported a net loss of $619.3 million, or $2.71 per share (basic and diluted), compared to a net loss of $386.2 million, or $1.71 per share (basic and diluted), for the comparable 2015 period.

“On the financial front, we continued to manage our debt maturity profile by successfully issuing bonds to prepay a portion of the outstanding borrowings under credit facilities for both the Sabine Pass Liquefaction Project and the CCL Project,” said Jack Fusco, Cheniere’s newly appointed president and CEO in a press release.

“During the quarter we took over care, custody, and control of Train 1 of the Sabine Pass Liquefaction Project and commenced commercial sales of LNG. After substantial completion, we exported 5 cargoes of LNG under our contract with BG Gulf Coast LNG, LLC (Shell) as of the end of the second quarter. Commissioning activities at Train 2 continue with first LNG achieved in late July, and our remaining Trains under construction continue on time and on budget.”

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Sabine Pass Liquefaction Project Update

Cheniere is developing up to six trains, each with an expected nominal production capacity of approximately 4.5 million tonnes per annum (“mtpa”) of LNG, at the Sabine Pass LNG terminal adjacent to the existing regasification facilities.

Construction on Trains 1 and 2 began in August 2012, and as of June 30, 2016, the overall project completion percentage for Trains 1 and 2 was approximately 99.4%, which is ahead of the contractual schedule. Train 1 achieved substantial completion in May 2016. Each Train is expected to achieve substantial completion upon the completion of construction, commissioning and the satisfaction of certain tests. The commissioning process on Train 2 has commenced, and based on the current construction schedule, Cheniere Partners expects substantial completion of Train 2 to be achieved in late September 2016.
Construction on Trains 3 and 4 began in May 2013, and as of June 30, 2016, the overall project completion percentage for Trains 3 and 4 was approximately 87.4%, which is ahead of the contractual schedule. Based on the current construction schedule, Cheniere Partners expects Trains 3 and 4 to reach substantial completion in 2017.
Construction on Train 5 began in June 2015, and as of June 30, 2016, the overall project completion percentage for Train 5 was approximately 38.3%, which is ahead of the contractual schedule. Engineering, procurement, subcontract work and Bechtel direct hire construction were approximately 77.0%, 58.0%, 37.8% and 2.0% complete, respectively. Based on the current construction schedule, Cheniere Partners expects Train 5 to reach substantial completion in 2019.
Train 6 is currently under development, with all necessary regulatory approvals in place. Cheniere Partners expects to make a final investment decision and commence construction on Train 6 upon, among other things, entering into an engineering, procurement, and construction contract, entering into acceptable commercial arrangements, and obtaining adequate financing.

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Corpus Christi LNG Terminal Update

Cheniere is developing up to three trains, each with an expected nominal production capacity of approximately 4.5 mtpa of LNG, near Corpus Christi, Texas.

Construction on Trains 1 and 2 began in May 2015, and as of June 30, 2016, the overall project completion percentage for Trains 1 and 2 was approximately 36.6%, which is ahead of the contractual schedule. Engineering, procurement and construction were approximately 98.4%, 50.6% and 8.8% complete, respectively. Based on the current construction schedule, we expect Trains 1 and 2 to reach substantial completion in 2019.
Train 3 is under development, with all necessary regulatory approvals in place. We have entered into an LNG Sale and Purchase Agreement (“SPA”) for approximately 0.8 mtpa of LNG volumes that commence with Train 3 and expect to commence construction upon entering into additional SPAs and obtaining adequate financing.

Additionally, Cheniere is developing Trains 4 and 5 adjacent to the CCL Project and have initiated the regulatory approval process with respect to those trains.