Cheniere Energy Partners, L.P. Profiili
Cheniere Energy Partners, L.P. provides clean, secure and affordable liquefied natural gas (LNG) to integrated energy companies, utilities, and energy trading companies around the world.
The LNG the company produces is shipped all over the world, turned back into natural gas (called ‘regasification’) and then transported via pipeline to homes and businesses and used as an energy source that is essential for heating, cooking and other industrial uses.
The natural gas liquefaction and export facility at Sabine Pass, Louisiana (the ‘Sabine Pass LNG terminal’), one of the largest LNG production facilities in the world, is located in Cameron Parish, Louisiana; and has natural gas liquefaction facilities consisting of six operational Trains, with Train 6, which achieved substantial completion on February 4, 2022, for a total production capacity of approximately 30 mtpa (million tonnes per annum) of LNG (the ‘Liquefaction Project’). The Sabine Pass LNG terminal also has operational regasification facilities that include five LNG storage tanks with aggregate capacity of approximately 17 Bcfe (billion cubic feet equivalent), two existing marine berths and one under construction that can each accommodate vessels with nominal capacity of up to 266,000 cubic meters and vaporizers with regasification capacity of approximately 4 Bcf/d (billion cubic feet per day). The company also owns a 94-mile pipeline through its subsidiary, CTPL, which interconnects the Sabine Pass LNG terminal with a number of large interstate pipelines (the ‘Creole Trail Pipeline’).
The company’s primary business strategy is to develop, construct and operate assets supported by long-term, fixed fee contracts. It plans to implement its strategy by safely, efficiently and reliably operating and maintaining its assets, including its Trains; procuring natural gas and pipeline transport capacity to its facility; commencing commercial delivery for its long-term SPA (LNG sale and purchase agreement) customers, of which the company had initiated for seven of eight third party long-term SPA customers as of December 31, 2021; maximizing the production of LNG to serve its customers; optimizing the Liquefaction Project by leveraging existing infrastructure; and strategically identifying actionable environmental solutions.
The Liquefaction Project is one of the largest LNG production facilities in the world. The company operates six Trains, including Train 6, which achieved substantial completion on February 4, 2022, and two marine berths, and are constructing a third marine berth. The SPL Project has a lump sum turnkey contract with Bechtel Oil, Gas and Chemicals, Inc. (Bechtel) for the EPC (engineering, procurement and construction) of Train 6.
Natural Gas Supply, Transportation and Storage
SPL has secured natural gas feedstock for the Sabine Pass LNG terminal through long-term natural gas supply agreements. Additionally, to ensure that SPL is able to transport natural gas feedstock to the Sabine Pass LNG terminal and manage inventory levels, it has entered into transportation precedent and other agreements to secure firm pipeline transportation and storage capacity from third-parties.
The Sabine Pass LNG terminal has operational regasification capacity of approximately 4 Bcf/d and aggregate LNG storage capacity of approximately 17 Bcfe. SPLNG has entered into two long-term, third party TUAs, under which SPLNG’s customers are required to pay fixed monthly fees, whether or not they use the approximately 2 Bcf/d of aggregate capacity they have reserved at the Sabine Pass LNG terminal. The remaining approximately 2 Bcf/d of capacity has been reserved under a TUA (terminal use agreement) by SPL.
The company’s customers are BG Gulf Coast LNG, LLC; GAIL (India) Limited; Korea Gas Corporation; Naturgy LNG GOM, Limited; and TotalEnergies Gas & Power North America, Inc.
The design, construction, operation, maintenance and expansion of the Sabine Pass LNG terminal, the import or export of LNG and the purchase and transportation of natural gas in interstate commerce through the Creole Trail Pipeline are highly regulated activities subject to the jurisdiction of the Federal Energy Regulatory Commission (FERC) pursuant to the Natural Gas Act of 1938, as amended (the ‘NGA’).
In order to site, construct and operate the Sabine Pass LNG terminal, the company received and is required to maintain authorizations from the FERC under Section 3 of the NGA, as well as other material governmental and regulatory approvals and permits.
The FERC issued its final Order Granting Section 3 Authority (Order) in April 2012 approving the company’s application for an order under Section 3 of the NGA authorizing the siting, construction and operation of Trains 1 through 4 of the Liquefaction Project (and related facilities).
The Creole Trail Pipeline, which interconnects with the Sabine Pass LNG terminal, holds a certificate of public convenience and necessity from the FERC under Section 7 of the NGA.
In addition, the company’s FERC orders require it to comply with certain ongoing conditions, reporting obligations and maintain other regulatory agency approvals throughout the life of the company’s LNG terminal and Creole Trail Pipeline. For example, throughout the life of the company’s LNG terminal and the Creole Trail Pipeline, it is subject to regular reporting requirements to the FERC, the Department of Transportation’s (DOT) Pipeline and Hazardous Materials Safety Administration (PHMSA), and applicable federal and state regulatory agencies regarding the operation and maintenance of the company’s facilities.
The company’s LNG terminal and the Creole Trail Pipeline are subject to regulation by PHMSA. Construction and operation of the Sabine Pass LNG terminal requires additional permits, orders, approvals and consultations to be issued by various federal and state agencies, including the DOT, the U.S. Army Corps of Engineers (USACE), the U.S. Department of Commerce, National Marine Fisheries Service, the U.S. Department of the Interior, the U.S. Fish and Wildlife Service, the U.S. Environmental Protection Agency (the ‘EPA’), the U.S. Department of Homeland Security, and the Louisiana Department of Environmental Quality (LDEQ).
The USACE issues its permits under the authority of the Clean Water Act (CWA) (Section 404) and the Rivers and Harbors Act (Section 10). The EPA administers the Clean Air Act (CAA) and has delegated authority to the LDEQ to issue the Title V Operating Permit (the ‘Title V Permit’) and the Prevention of Significant Deterioration Permit (the ‘PSD Permit’). These two permits are issued by the LDEQ for the Sabine Pass LNG terminal and CTPL.
The Dodd-Frank Wall Street Reform and Consumer Protection Act (the ‘Dodd-Frank Act’) amended the Commodity Exchange Act to provide for federal regulation of the over-the-counter derivatives market and entities, such as the company, which participate in those markets.
In addition, separate from the Dodd-Frank Act, the company’s use of futures and options on commodities is subject to the Commodity Exchange Act and CFTC (Commodity Futures Trading Commission) regulations, as well as the rules of futures exchanges on which any of these instruments are executed.
The Sabine Pass LNG terminal is subject to the federal CAA and comparable state and local laws. The siting and construction of the Sabine Pass LNG terminal within the coastal zone is subject to the requirements of the Coastal Zone Management Act (CZMA).
The Sabine Pass LNG terminal is subject to the federal CWA and analogous state and local laws. The CWA is administered by the EPA, the USACE and by the states (in Louisiana, by the LDEQ). The CWA regulatory programs, including the Section 404 dredge and fill permitting program and Section 401 water quality certification program carried out by the states, are frequently the subject of shifting agency interpretations and legal challenges, which at times can result in permitting delays.
The federal Resource Conservation and Recovery Act (RCRA) and comparable state statutes govern the generation, handling and disposal of solid and hazardous wastes and require corrective action for releases into the environment. When such wastes are generated in connection with the operations of the company’s facilities, it is subject to regulatory requirements affecting the handling, transportation, treatment, storage, and disposal of such wastes.
The company’s assets are generally held by its subsidiaries. The company conducts most of its business through these subsidiaries, including the development, construction, and operation of its LNG terminal business.
Cheniere Energy Partners, L.P., a publicly traded Delaware limited partnership, was founded in 2003. The company was incorporated in 2006.