Business Context and Reporting Period
Company: Cheniere Energy Partners, L.P.
Filing Type: Form 8-K (Current Report)
Date of Report: March 22, 2013 (Event Date)
Reporting Period: Single event disclosure regarding a material definitive agreement.
Key Financial Metrics
This filing is a current report regarding a contractual agreement and does not contain audited financial statements, revenue, profit, cash flow, or debt metrics for the reporting period.
| Metric | Value |
|---|---|
| Contract Volume | 91,250,000 MMBtu annually (~1.75 million tonnes) |
| Contract Term | 20 years (with option to extend up to 10 years) |
| Pricing Formula | $3.00 fixed + 115% of Henry Hub futures price |
| Inflation Adjustment | 11.5% of the fixed portion adjusted annually |
Material Changes
The primary material change is the entry into a 20-year LNG Sale and Purchase Agreement (SPA) between Sabine Pass Liquefaction, LLC (a subsidiary of Cheniere Partners) and Centrica plc. This agreement secures a long-term offtake for the fifth liquefaction train at the Sabine Pass facility.
Outlook, Risks, and Contingencies
- Conditions Precedent: The obligations to proceed with the fifth liquefaction train are contingent upon:
- Receipt of all regulatory approvals for construction and operation.
- Securing necessary financing arrangements.
- A positive final investment decision (FID).
- Effective regulatory authorizations for U.S. LNG exports.
- Issuance of an unconditional notice to proceed.
- Timeline: First commercial delivery is designated within 180 days after the 50th month following the satisfaction of conditions. If conditions are not met by June 30, 2015, either party may terminate.
- Termination Risks:
- Force Majeure: Centrica may terminate if force majeure events aggregate 24+ months in a 36-month period, reducing availability by 50% or more.
- Performance: Termination rights exist if 50% of scheduled cargoes are not made available or taken within a 12-month period.
- Credit: Termination is permitted if Centrica or its guarantor fails to meet credit rating requirements or fails to deliver required guarantees.
- Bankruptcy: Either party may terminate upon the other's bankruptcy event.
Investor Verification Checklist
- Verify the status of regulatory approvals for the fifth liquefaction train in Cameron Parish, Louisiana.
- Confirm whether the necessary financing arrangements for the fifth train have been secured.
- Monitor the Final Investment Decision (FID) status for the fifth train.
- Review the credit rating of Centrica plc and its guarantor to ensure compliance with SPA requirements.
- Assess the timeline for the "unconditional notice to proceed" relative to the June 30, 2015, termination deadline.