Cheniere(US:CQP)2023-02-22 16:00Liquefaction Project Capacity and Contracts - Approximately 85% of the total production capacity from the Liquefaction Project is contracted under SPAs and IPM agreements, with a weighted average remaining life of about 15 years as of December 31, 2022[15]. - The company has increased available liquefaction capacity at its Liquefaction Project through debottlenecking and optimization projects, focusing on financial discipline[16]. - The company has secured long-term natural gas supply agreements, including an IPM agreement, to ensure feedstock for the Sabine Pass LNG Terminal[22]. - The FERC has authorized the company to increase the total LNG production capacity of the terminal to reflect enhancements during engineering and operational experience[38]. - Long-term sales contracts cover approximately 85% of total production capacity, with an average remaining life of 15 years[602]. LNG Terminal Operations - The Sabine Pass LNG Terminal has received FERC approval for a total natural gas volume of 1,661.94 Bcf/yr for both FTA and non-FTA countries, equivalent to 33 mtpa[22]. - The operational regasification capacity of the Sabine Pass LNG Terminal is approximately 4 Bcf/d, with an aggregate LNG storage capacity of around 17 Bcfe[23]. - The Sabine Pass LNG Terminal has a regasification capacity of approximately 4 Bcf/d, with fixed monthly fees from TotalEnergies totaling approximately $125 million annually[533]. Financial Performance - LNG revenues for the year ended December 31, 2022, were $11,506 million, a 50% increase from $7,640 million in 2021[512]. - Total revenues from contracts with customers reached $17,205 million in 2022, up from $9,435 million in 2021, representing an 82% growth[512]. - Net income for the year ended December 31, 2022, was $2,498 million, up $868 million from $1,630 million in 2021[554]. - The increase in net income was primarily due to a $1.4 billion rise in LNG revenues and a $765 million lump sum fee from Chevron related to a Termination Agreement[554]. - Total revenues increased by $7,772 million to $17,206 million in 2022, compared to $9,434 million in 2021[553]. Regulatory and Environmental Compliance - The company is subject to extensive regulatory requirements, which may increase construction and operational costs, and non-compliance could result in penalties[27]. - The company is subject to various federal, state, and local environmental regulations, which may impose substantial penalties for non-compliance[54]. - The Inflation Reduction Act of 2022 includes a charge on methane emissions starting at $900 per metric ton in 2024, increasing to $1,500 per metric ton in 2026 and beyond[62]. - The company expects to incur capital expenditures for air pollution control equipment to maintain or obtain necessary permits and approvals[60]. - Cheniere joined the Oil and Gas Methane Partnership 2.0 in October 2022, focusing on methane emissions reporting and mitigation[78]. Market Demand and Trends - Global demand for LNG is expected to increase by approximately 53%, from 388.5 mtpa in 2021 to 595.7 mtpa in 2030, and to 677.8 mtpa in 2040[71]. - Significant investments are being made globally in natural gas projects, with over 80 mtpa of import capacity planned in Europe to secure access to LNG and displace Russian gas imports[70]. - Global LNG demand grew by approximately 5% in 2022, adding 19.5 million tonnes to the overall market[550]. - LNG imports into Europe and Turkey increased by 45.9 million tonnes, or 61% year-over-year in 2022[550]. - The average settlement price for the Dutch Title Transfer Facility (TTF) was $40.9/MMBtu in 2022, a 184% increase from 2021[550]. Debt and Financial Obligations - Total debt as of December 31, 2022, is $16.332 billion, a decrease from $17.332 billion in 2021[522]. - Total liabilities increased to $4,587 million in 2022 from $4,540 million in 2021, a rise of 1.0%[599]. - Total obligations under natural gas supply, transportation, and storage service agreements as of December 31, 2022, amounted to $28.5 billion[584]. - The company has fixed commitments under services and other agreements totaling $1.0 billion with third parties and $1.3 billion with affiliates[585]. - The company has $1.6 billion in available commitments under credit facilities to meet liquidity needs[608]. Cash Flow and Liquidity - The company reported $904 million in cash and cash equivalents as of December 31, 2022, with total available liquidity of $2,618 million[562]. - The company expects to meet its long-term cash requirements through operating cash flows and potential debt or equity offerings[562]. - Declared distributions for 2022 totaled $2,982 million, with $2,057 million allocated to limited partner common units[579]. - Cash distribution of $1.07 per common unit was declared on January 27, 2023, consisting of a base amount of $0.775 and a variable amount of $0.295[575]. Operational Costs and Expenses - Operating costs and expenses rose by $6,949 million to $13,826 million in 2022, driven by a $5.5 billion increase in cost of sales[553]. - The company incurred $757 million in derivative losses related to the Tourmaline IPM agreement, impacting net income negatively[556]. - Cash paid for interest on debt was $777 million in 2022, down from $812 million in 2021[614]. Miscellaneous - The company has no employees and relies on its general partner and subsidiaries for management and operational support[81]. - The company has not incurred material direct capital expenditures related to climate change but aims to manage environmental impacts proactively[79]. - The company operates with independent capital structures, with certain restrictions under debt instruments limiting cash distributions[591]. - No changes or disagreements with accountants on accounting and financial disclosure reported[619].