Cheniere Energy Partners, L.P. - Form 8-K Summary
Business Context and Reporting Period
This Current Report on Form 8-K was filed by Cheniere Energy Partners, L.P. on January 30, 2012. The filing discloses the entry into a Material Definitive Agreement regarding the sale of liquefied natural gas (LNG).
Key Financial Metrics
The filing text does not provide current revenue, profit, cash flow, margins, debt, or liquidity figures. This report focuses exclusively on the terms of a new commercial agreement.
Material Changes and Agreement Details
On January 30, 2012, Sabine Pass Liquefaction, LLC (a subsidiary of Cheniere Partners) signed an LNG Sale and Purchase Agreement (SPA) with Korea Gas Corporation (KOGAS). Key terms include:
- Volume: Annual contract quantity of 182,500,000 MMBtu (approximately 3.5 million tonnes per annum).
- Pricing: $3.00 fixed plus 115% of the NYMEX Henry Hub natural gas futures settlement price for the delivery month. The fixed portion is subject to annual inflation adjustments of 11.5%.
- Term: 20-year term commencing on the date of first commercial delivery from the third liquefaction train, with an option for KOGAS to extend for up to 10 additional years.
- Take-or-Pay: KOGAS may suspend delivery but remains obligated to pay the fixed portion of the price for suspended quantities.
Conditions, Risks, and Contingencies
The obligations under the SPA are contingent upon several conditions being satisfied or waived:
- Receipt of all regulatory approvals for construction and operation of the third liquefaction train in Cameron Parish, Louisiana.
- Securing necessary financing arrangements.
- A positive final investment decision by Sabine Liquefaction.
- Effective regulatory authorizations for U.S. LNG exports.
Termination Rights: Either party may terminate if conditions are not met by June 30, 2013 (unless extended by agreement). KOGAS may terminate if commercial operations do not commence within 180 days of the designated start date or if force majeure events reduce availability by 50% or more over a 36-month period. Sabine Liquefaction may terminate if KOGAS fails to take 50% of scheduled cargoes in a 12-month period or fails to provide required guarantees.
Investor Verification Checklist
- Verify the status of regulatory approvals for the third liquefaction train in Louisiana.
- Confirm the timeline for the final investment decision and financing arrangements.
- Monitor the June 30, 2013 deadline for satisfying conditions to commence the 20-year term.
- Review the full text of the SPA (Exhibit 10.1) for detailed exceptions and qualifications.