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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2022
or
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from            to            
Commission file number 001-33366
Cheniere Energy Partners, L.P.
(Exact name of registrant as specified in its charter)
Delaware20-5913059
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
700 Milam Street, Suite 1900
Houston, Texas 77002
(Address of principal executive offices) (Zip Code)
(713) 375-5000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: 
Title of each classTrading SymbolName of each exchange on which registered
Common Units Representing Limited Partner InterestsCQPNYSE American
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ☒   No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes  ☒   No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes     No ☒
As of April 29, 2022, the registrant had 484,027,123 common units outstanding.




CHENIERE ENERGY PARTNERS, L.P.
TABLE OF CONTENTS







i

DEFINITIONS

As used in this quarterly report, the terms listed below have the following meanings: 

Common Industry and Other Terms
ASUAccounting Standards Update
Bcfbillion cubic feet
Bcf/dbillion cubic feet per day
Bcf/yrbillion cubic feet per year
Bcfebillion cubic feet equivalent
DOEU.S. Department of Energy
EPCengineering, procurement and construction
FASBFinancial Accounting Standards Board
FERCFederal Energy Regulatory Commission
FTA countriescountries with which the United States has a free trade agreement providing for national treatment for trade in natural gas
GAAPgenerally accepted accounting principles in the United States
Henry Hubthe final settlement price (in USD per MMBtu) for the New York Mercantile Exchange’s Henry Hub natural gas futures contract for the month in which a relevant cargo’s delivery window is scheduled to begin
IPM agreementsintegrated production marketing agreements in which the gas producer sells to us gas on a global LNG index price, less a fixed liquefaction fee, shipping and other costs
LIBORLondon Interbank Offered Rate
LNGliquefied natural gas, a product of natural gas that, through a refrigeration process, has been cooled to a liquid state, which occupies a volume that is approximately 1/600th of its gaseous state
MMBtumillion British thermal units; one British thermal unit measures the amount of energy required to raise the temperature of one pound of water by one degree Fahrenheit
mtpamillion tonnes per annum
non-FTA countriescountries with which the United States does not have a free trade agreement providing for national treatment for trade in natural gas and with which trade is permitted
SECU.S. Securities and Exchange Commission
SPALNG sale and purchase agreement
TBtu
trillion British thermal units; one British thermal unit measures the amount of energy required to raise the temperature of one pound of water by one degree Fahrenheit
Trainan industrial facility comprised of a series of refrigerant compressor loops used to cool natural gas into LNG
TUAterminal use agreement



1

Abbreviated Legal Entity Structure

The following diagram depicts our abbreviated legal entity structure as of March 31, 2022, including our ownership of certain subsidiaries, and the references to these entities used in this quarterly report:
cqp-20220331_g1.jpg
Unless the context requires otherwise, references to “CQP,” “the Partnership,” “we,” “us” and “our” refer to Cheniere Energy Partners, L.P. and its consolidated subsidiaries, including SPLNG, SPL and CTPL. 



2



PART I.     FINANCIAL INFORMATION

ITEM 1.    CONSOLIDATED FINANCIAL STATEMENTS
CHENIERE ENERGY PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per unit data)
(unaudited)

Three Months Ended March 31,
20222021
Revenues
LNG revenues$2,488 $1,669 
LNG revenues—affiliate757 214 
Regasification revenues68 67 
Other revenues15 13 
Total revenues3,328 1,963 
Operating costs and expenses
Cost of sales (excluding items shown separately below)2,562 948 
Cost of sales—affiliate5 42 
Operating and maintenance expense170 149 
Operating and maintenance expense—affiliate38 34 
Operating and maintenance expense—related party12 10 
General and administrative expense3 2 
General and administrative expense—affiliate23 21 
Depreciation and amortization expense153 139 
Total operating costs and expenses2,966 1,345 
Income from operations362 618 
Other expense
Interest expense, net of capitalized interest(203)(217)
Loss on modification or extinguishment of debt (54)
Total other expense(203)(271)
Net income$159 $347 
Basic and diluted net income (loss) per common unit$(0.11)$0.64 
Weighted average number of common units outstanding used for basic and diluted net income (loss) per common unit calculation484.0 484.0 

The accompanying notes are an integral part of these consolidated financial statements.

3

CHENIERE ENERGY PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in millions, except unit data)

March 31,December 31,
20222021
ASSETS(unaudited) 
Current assets  
Cash and cash equivalents$1,156 $876 
Restricted cash and cash equivalents136 98 
Trade and other receivables, net of current expected credit losses434 580 
Accounts receivable—affiliate290 232 
Accounts receivable—related party 1 
Advances to affiliate150 141 
Inventory149 176 
Current derivative assets24 21 
Other current assets93 87 
Other current assets—affiliate2  
Total current assets2,434 2,212 
Property, plant and equipment, net of accumulated depreciation16,915 16,830 
Operating lease assets96 98 
Debt issuance costs, net of accumulated amortization11 12 
Derivative assets30 33 
Other non-current assets, net172 173 
Total assets$19,658 $19,358 
LIABILITIES AND PARTNERS' EQUITY (DEFICIT) 
Current liabilities
Accounts payable$24 $21 
Accrued liabilities1,159 1,073 
Accrued liabilities—related party5 4 
Due to affiliates32 67 
Deferred revenue116 155 
Deferred revenue—affiliate 1 
Current operating lease liabilities8 8 
Current derivative liabilities256 16 
Total current liabilities1,600 1,345 
Long-term debt, net of premium, discount and debt issuance costs17,184 17,177 
Operating lease liabilities87 89 
Derivative liabilities2,999 11 
Other non-current liabilities—affiliate18 18 
Partners' equity (deficit)
Common unitholders’ interest (484.0 million units issued and outstanding at both March 31, 2022 and December 31, 2021)
(1,870)1,024 
General partner’s interest (2% interest with 9.9 million units issued and outstanding at March 31, 2022 and December 31, 2021)
(360)(306)
Total partners' equity (deficit)(2,230)718 
Total liabilities and partners' equity (deficit)$19,658 $19,358 

The accompanying notes are an integral part of these consolidated financial statements.

4

CHENIERE ENERGY PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF PARTNERS’ EQUITY (DEFICIT)
(in millions)
(unaudited)

Three Months Ended March 31, 2022
Common Unitholders’ InterestGeneral Partner’s InterestTotal Partners’ Deficit
UnitsAmountUnitsAmount
Balance at December 31, 2021484.0 $1,024 9.9 $(306)$718 
Net income— 157 — 2 159 
Non-cash distribution (see Note 14)
— (2,712)— — (2,712)
Distributions
Common units, $0.700/unit
— (339)— — (339)
General partner units— — — (56)(56)
Balance at March 31, 2022484.0 $(1,870)9.9 $(360)$(2,230)

Three Months Ended March 31, 2021
Common Unitholders’ InterestGeneral Partner’s InterestTotal Partners’ Equity
UnitsAmountUnitsAmount
Balance at December 31, 2020484.0 $714 9.9 $(175)$539 
Net income— 340 — 7 347 
Distributions
Common units, $0.655/unit
— (316)— — (316)
General partner units— — — (35)(35)
Balance at March 31, 2021484.0 $738 9.9 $(203)$535 
The accompanying notes are an integral part of these consolidated financial statements.

5

CHENIERE ENERGY PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(unaudited)

 Three Months Ended March 31,
20222021
Cash flows from operating activities  
Net income$159 $347 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense153 139 
Amortization of debt issuance costs, premium and discount7 8 
Loss on modification or extinguishment of debt 54 
Total losses on derivative instruments, net525 2 
Net cash provided by (used for) settlement of derivative instruments(9)20 
Other4 3 
Changes in operating assets and liabilities:
Trade and other receivables, net of current expected credit losses88 (56)
Accounts receivable—affiliate(74)86 
Advances to affiliate(8)18 
Inventory25 4 
Accounts payable and accrued liabilities13 24 
Accrued liabilities—related party1 (1)
Due to affiliates(20)(20)
Deferred revenue(39)(36)
Other, net(24)(6)
Other, net—affiliate(1)2 
Net cash provided by operating activities800 588 
Cash flows from investing activities  
Property, plant and equipment(87)(146)
Net cash used in investing activities(87)(146)
Cash flows from financing activities  
Proceeds from issuances of debt 1,500 
Redemptions and repayments of debt (1,500)
Debt issuance and other financing costs (19)
Debt extinguishment costs (40)
Distributions to owners(395)(351)
Other 3 
Net cash used in financing activities(395)(407)
Net increase in cash, cash equivalents and restricted cash and cash equivalents318 35 
Cash, cash equivalents and restricted cash and cash equivalents—beginning of period974 1,307 
Cash, cash equivalents and restricted cash and cash equivalents—end of period$1,292 $1,342 

Balances per Consolidated Balance Sheet:
March 31,
2022
Cash and cash equivalents$1,156 
Restricted cash and cash equivalents136 
Total cash, cash equivalents and restricted cash and cash equivalents$1,292 
The accompanying notes are an integral part of these consolidated financial statements.

6

CHENIERE ENERGY PARTNERS, L.P. AND SUBSIDIARIES 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)


NOTE 1—NATURE OF OPERATIONS AND BASIS OF PRESENTATION

We own the natural gas liquefaction and export facility in Cameron Parish, Louisiana at Sabine Pass (the “Sabine Pass LNG Terminal”) which has six operational Trains, with Train 6 achieving substantial completion on February 4, 2022, for a total production capacity of approximately 30 mtpa of LNG (the “Liquefaction Project”). The Sabine Pass LNG Terminal also has operational regasification facilities that include five LNG storage tanks, vaporizers and two marine berths, with an additional marine berth that is under construction. We also own a 94-mile pipeline through our subsidiary, CTPL, that interconnects the Sabine Pass LNG Terminal with a number of large interstate pipelines (the “Creole Trail Pipeline”).

As of March 31, 2022, Cheniere owned 48.6% of our limited partner interest in the form of 239.9 million of our common units. Cheniere also owns 100% of our general partner interest and our incentive distribution rights (“IDRs”).

Basis of Presentation

The accompanying unaudited Consolidated Financial Statements of CQP have been prepared in accordance with GAAP for interim financial information and in accordance with Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the Consolidated Financial Statements and accompanying notes included in our annual report on Form 10-K for the fiscal year ended December 31, 2021. Reclassifications that are not material to our Consolidated Financial Statements, if any, are made to prior period financial information to conform to the current year presentation.

Results of operations for the three months ended March 31, 2022 are not necessarily indicative of the results of operations that will be realized for the year ending December 31, 2022.

We are not subject to either federal or state income tax, as our partners are taxed individually on their allocable share of our taxable income.

Recent Accounting Standards

ASU 2020-04

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This guidance primarily provides temporary optional expedients which simplify the accounting for contract modifications to existing debt agreements expected to arise from the market transition from LIBOR to alternative reference rates. The optional expedients were available to be used upon issuance of this guidance but we have not yet applied the guidance because we have not yet modified any of our existing contracts for reference rate reform. Once we apply an optional expedient to a modified contract and adopt this standard, the guidance will be applied to all subsequent applicable contract modifications until December 31, 2022, at which time the optional expedients are no longer available.

NOTE 2—UNITHOLDERS’ EQUITY
 
The common units represent limited partner interests in us. The holders of the units are entitled to participate in partnership distributions and exercise the rights and privileges available to limited partners under our partnership agreement. Our partnership agreement requires that, within 45 days after the end of each quarter, we distribute all of our available cash (as defined in our partnership agreement). Generally, our available cash is our cash on hand at the end of a quarter less the amount of any reserves established by our general partner. All distributions paid to date have been made from accumulated operating surplus as defined in the partnership agreement.

Although common unitholders are not obligated to fund losses of the Partnership, its capital account, which would be considered in allocating the net assets of the Partnership were it to be liquidated, continues to share in losses.

The general partner interest is entitled to at least 2% of all distributions made by us. In addition, the general partner holds IDRs, which allow the general partner to receive a higher percentage of quarterly distributions of available cash from
7

CHENIERE ENERGY PARTNERS, L.P. AND SUBSIDIARIES 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(unaudited)
operating surplus as additional target levels are met, but may transfer these rights separately from its general partner interest. The higher percentages range from 15% to 50%, inclusive of the general partner interest.
As of March 31, 2022, our total securities beneficially owned in the form of common units were held 48.6% by Cheniere, 41.4% by CQP Target Holdco L.L.C. (“CQP Target Holdco”) and other affiliates of Blackstone Inc. (“Blackstone”) and Brookfield Asset Management Inc. (“Brookfield”) and 8.0% by the public. All of our 2% general partner interest was held by Cheniere. CQP Target Holdco’s equity interests are 50.00% owned by BIP Chinook Holdco L.L.C., an affiliate of Blackstone and 50.00% owned by BIF IV Cypress Aggregator (Delaware) LLC, an affiliate of Brookfield. The ownership of CQP Target Holdco, Blackstone and Brookfield are based on their most recent filings with the SEC.

NOTE 3—RESTRICTED CASH AND CASH EQUIVALENTS
 
Restricted cash and cash equivalents consist of funds that are contractually or legally restricted as to usage or withdrawal and have been presented separately from cash and cash equivalents on our Consolidated Balance Sheets. As of March 31, 2022 and December 31, 2021, we had $136 million and $98 million of restricted cash and cash equivalents, respectively.

Pursuant to the accounts agreement entered into with the collateral trustee for the benefit of SPL’s debt holders, SPL is required to deposit all cash received into reserve accounts controlled by the collateral trustee. The usage or withdrawal of such cash is restricted to the payment of liabilities related to the Liquefaction Project and other restricted payments.

NOTE 4—TRADE AND OTHER RECEIVABLES, NET OF CURRENT EXPECTED CREDIT LOSSES

Trade and other receivables, net of current expected credit losses consisted of the following (in millions):
March 31,December 31,
20222021
SPL trade receivables$411 $546 
Other receivables23 34 
Total trade and other receivables, net of current expected credit losses$434 $580 

NOTE 5—INVENTORY

Inventory consisted of the following (in millions):
March 31,December 31,
20222021
Materials$89 $86 
LNG33 45 
Natural gas25 43 
Other2 2 
Total inventory$149 $176 

NOTE 6—PROPERTY, PLANT AND EQUIPMENT, NET OF ACCUMULATED DEPRECIATION
 
Property, plant and equipment, net of accumulated depreciation consisted of the following (in millions):
March 31,December 31,
20222021
LNG terminal  
LNG terminal and interconnecting pipeline facilities$19,432 $16,973 
LNG terminal construction-in-process524 2,746 
Accumulated depreciation(3,044)(2,893)
Total LNG terminal, net of accumulated depreciation16,912 16,826 
Fixed assets  
Fixed assets28 29 
Accumulated depreciation(25)(25)
Total fixed assets, net of accumulated depreciation3 4 
Property, plant and equipment, net of accumulated depreciation$16,915 $16,830 
8

CHENIERE ENERGY PARTNERS, L.P. AND SUBSIDIARIES 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(unaudited)

The following table shows depreciation expense and offsets to LNG terminal costs (in millions):
Three Months Ended March 31,
20222021
Depreciation expense$152 $138 
Offsets to LNG terminal costs (1)148  
(1)We recognize offsets to LNG terminal costs related to the sale of commissioning cargoes because these amounts were earned or loaded prior to the start of commercial operations of the respective Trains of the Liquefaction Project during the testing phase for its construction.

NOTE 7—DERIVATIVE INSTRUMENTS

We have entered into commodity derivatives consisting of natural gas supply contracts, including those under SPL’s IPM agreement, for the commissioning and operation of the Liquefaction Project (“Physical Liquefaction Supply Derivatives”) and associated economic hedges (“Financial Liquefaction Supply Derivatives,” and collectively with the Physical Liquefaction Supply Derivatives, the “Liquefaction Supply Derivatives”).

We recognize our derivative instruments as either assets or liabilities and measure those instruments at fair value. None of our derivative instruments are designated as cash flow or fair value hedging instruments, and changes in fair value are recorded within our Consolidated Statements of Income to the extent not utilized for the commissioning process, in which case it is capitalized.

The following table shows the fair value of our derivative instruments that are required to be measured at fair value on a recurring basis (in millions):
Fair Value Measurements as of
March 31, 2022December 31, 2021
Quoted Prices in Active Markets
(Level 1)
Significant Other Observable Inputs
(Level 2)
Significant Unobservable Inputs
(Level 3)
TotalQuoted Prices in Active Markets
(Level 1)
Significant Other Observable Inputs
(Level 2)
Significant Unobservable Inputs
(Level 3)
Total
Liquefaction Supply Derivatives asset (liability)$(26)$(13)$(3,162)$(3,201)$2 $(13)$38 $27 
We value our Liquefaction Supply Derivatives using a market-based approach or option-based approach incorporating present value techniques, as needed, using observable commodity price curves, when available, and other relevant data.

The fair value of our Physical Liquefaction Supply Derivatives is predominantly driven by observable and unobservable market commodity prices and, as applicable to our natural gas supply contracts, our assessment of the associated events deriving fair value including, but not limited to, evaluation of whether the respective market exists from the perspective of market participants as infrastructure is developed.

We include a portion of our Physical Liquefaction Supply Derivatives as Level 3 within the valuation hierarchy as the fair value is developed through the use of internal models which incorporate significant unobservable inputs. In instances where observable data is unavailable, consideration is given to the assumptions that market participants would use in valuing the asset or liability. This includes assumptions about market risks, such as future prices of energy units for unobservable periods, liquidity and volatility.

9

CHENIERE ENERGY PARTNERS, L.P. AND SUBSIDIARIES 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(unaudited)
The Level 3 fair value measurements of natural gas positions within our Physical Liquefaction Supply Derivatives could be materially impacted by a significant change in certain natural gas and international LNG prices. The following table includes quantitative information for the unobservable inputs for our Level 3 Physical Liquefaction Supply Derivatives as of March 31, 2022:
Net Fair Value Liability
(in millions)
Valuation ApproachSignificant Unobservable InputRange of Significant Unobservable Inputs / Weighted Average (1)
Physical Liquefaction Supply Derivatives$(3,162)Market approach incorporating present value techniquesHenry Hub basis spread
$(1.578) - $0.215 / $(0.004)
Option pricing modelInternational LNG pricing spread, relative to Henry Hub (2)
104% - 459% / 206%
(1)Unobservable inputs were weighted by the relative fair value of the instruments.
(2)Spread contemplates U.S. dollar-denominated pricing.

Increases or decreases in basis or pricing spreads, in isolation, would decrease or increase, respectively, the fair value of our Physical Liquefaction Supply Derivatives.

The following table shows the changes in the fair value of our Level 3 Physical Liquefaction Supply Derivatives (in millions):
Three Months Ended March 31,
20222021
Balance, beginning of period$38 $(21)
Realized and mark-to-market losses:
Included in cost of sales(53)(12)
Purchases and settlements:
Purchases (1)(3,141)1 
Settlements(6)(4)
Balance, end of period$(3,162)$(36)
Change in unrealized losses relating to instruments still held at end of period$(53)$(12)
(1)Includes any assignments during the period.

All counterparty derivative contracts provide for the unconditional right of set-off in the event of default. We have elected to report derivative assets and liabilities arising from our derivative contracts with the same counterparty on a net basis. The use of derivative instruments exposes us to counterparty credit risk, or the risk that a counterparty will be unable to meet its commitments in instances when our derivative instruments are in an asset position. Additionally, counterparties are at risk that we will be unable to meet our commitments in instances where our derivative instruments are in a liability position. We incorporate both our own nonperformance risk and the respective counterparty’s nonperformance risk in fair value measurements. In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we have considered the impact of any applicable credit enhancements, such as collateral postings, set-off rights and guarantees.

Liquefaction Supply Derivatives

SPL has entered into primarily index-based Liquefaction Supply Derivatives. The remaining minimum terms of the physical natural gas supply contracts range up to 15 years, some of which commence upon the satisfaction of certain conditions precedent. The terms of the Financial Liquefaction Supply Derivatives range up to approximately two years.

The forward notional amount for our Liquefaction Supply Derivatives was approximately 5,550 TBtu and 5,194 TBtu as of March 31, 2022 and December 31, 2021, respectively, excluding notional amounts associated with extension options that were uncertain to be taken as of March 31, 2022.

10

CHENIERE ENERGY PARTNERS, L.P. AND SUBSIDIARIES 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(unaudited)
Fair Value and Location of Derivative Assets and Liabilities on the Consolidated Balance Sheets

The following table shows the fair value and location of our Liquefaction Supply Derivatives on our Consolidated Balance Sheets (in millions):
Fair Value Measurements as of (1)
Consolidated Balance Sheets LocationMarch 31, 2022December 31, 2021
Current derivative assets$24 $21 
Derivative assets30 33 
Total derivative assets54 54 
Current derivative liabilities(256)(16)
Derivative liabilities(2,999)(11)
Total derivative liabilities(3,255)(27)
Derivative asset (liability), net$(3,201)$27 
(1)Does not include collateral posted with counterparties by us of $32 million and $7 million, which are included in other current assets in our Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021, respectively.

The following table shows the effect and location of our Liquefaction Supply Derivatives recorded on our Consolidated Statements of Income (in millions):
Loss Recognized in Consolidated Statements of Income
 Consolidated Statements of Income Location (1)
Three Months Ended March 31,
20222021
Cost of sales$(525)$(2)
(1)Does not include the realized value associated with derivative instruments that settle through physical delivery. Fair value fluctuations associated with commodity derivative activities are classified and presented consistently with the item economically hedged and the nature and intent of the derivative instrument.

Consolidated Balance Sheets Presentation

Our derivative instruments are presented on a net basis on our Consolidated Balance Sheets as described above. The following table shows the fair value of our derivatives outstanding on a gross and net basis (in millions):
Liquefaction Supply Derivatives
As of March 31, 2022
Gross assets$74 
Offsetting amounts(20)
Net assets$54 
Gross liabilities$(3,266)
Offsetting amounts11 
Net liabilities$(3,255)
As of December 31, 2021
Gross assets$79 
Offsetting amounts(25)
Net assets$54 
Gross liabilities$(33)
Offsetting amounts6 
Net liabilities$(27)

11

CHENIERE ENERGY PARTNERS, L.P. AND SUBSIDIARIES 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(unaudited)
NOTE 8—ACCRUED LIABILITIES
 
Accrued liabilities consisted of the following (in millions):
March 31,December 31,
20222021
Accrued natural gas purchases$692 $786 
Interest costs and related debt fees215 180 
LNG terminal and related pipeline costs240 101 
Other accrued liabilities12 6 
Total accrued liabilities $1,159 $1,073 

NOTE 9—DEBT
 
Debt consisted of the following (in millions):
March 31,December 31,
20222021
SPL:
Senior Secured Notes:
5.625% due 2023
$1,500 $1,500 
5.75% due 2024
2,000 2,000 
5.625% due 2025
2,000 2,000 
5.875% due 2026
1,500 1,500 
5.00% due 2027
1,500 1,500 
4.200% due 2028
1,350 1,350 
4.500% due 2030
2,000 2,000 
4.27% weighted average rate due 2037
1,282 1,282 
Total SPL Senior Secured Notes13,132 13,132 
$1.2 billion Working Capital Revolving Credit and Letter of Credit Reimbursement Agreement (“2020 SPL Working Capital Facility”)
  
Total debt - SPL13,132 13,132 
CQP:
Senior Notes:
4.500% due 2029
1,500 1,500 
4.000% due 2031
1,500 1,500 
3.25% due 2032
1,200 1,200 
Total CQP Senior Notes4,200 4,200 
CQP Credit Facilities executed in 2019 (“2019 CQP Credit Facilities”)
  
Total debt - CQP4,200 4,200 
Total debt17,332 17,332 
Unamortized premium, discount and debt issuance costs, net(148)(155)
Total long-term debt, net of premium, discount and debt issuance costs$17,184 $17,177 

12

CHENIERE ENERGY PARTNERS, L.P. AND SUBSIDIARIES 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(unaudited)
Credit Facilities

Below is a summary of our credit facilities outstanding as of March 31, 2022 (in millions):
2020 SPL Working Capital Facility
2019 CQP Credit Facilities
Total facility size$1,200 $750 
Less:
Outstanding balance  
Letters of credit issued368  
Available commitment$832 $750 
Priority rankingSenior securedSenior secured
Interest rate on available balance
LIBOR plus 1.125% - 1.750% or base rate plus 0.125% - 0.750%
LIBOR plus 1.25% - 2.125% or base rate plus 0.25% - 1.125%
Weighted average interest rate of outstanding balancen/an/a
Commitment fees on undrawn balance0.20%0.49%
Maturity dateMarch 19, 2025May 29, 2024

Restrictive Debt Covenants

The indentures governing our senior notes and other agreements underlying our debt contain customary terms and events of default and certain covenants that, among other things, may limit us and our restricted subsidiaries’ ability to make certain investments or pay dividends or distributions. We and SPL are restricted from making distributions under agreements governing our and SPL’s indebtedness generally until, among other requirements, deposits are made into any required debt service reserve accounts and a historical debt service coverage ratio and projected debt service coverage ratio of at least 1.25:1.00 is satisfied.

As of March 31, 2022, we and SPL were in compliance with all covenants related to our respective debt agreements.

Interest Expense

Total interest expense, net of capitalized interest consisted of the following (in millions):
Three Months Ended March 31,
20222021
Total interest cost$224 $247 
Capitalized interest(21)(30)
Total interest expense, net of capitalized interest$203 $217 

Fair Value Disclosures

The following table shows the carrying amount and estimated fair value of our debt (in millions):
March 31, 2022December 31, 2021
 Carrying
Amount
Estimated
Fair Value
Carrying
Amount
Estimated
Fair Value
Senior notes — Level 2 (1)$16,050 $16,507 $16,050 $17,496 
Senior notes — Level 3 (2)1,282 1,297 1,282 1,466 
(1)The Level 2 estimated fair value was based on quotes obtained from broker-dealers or market makers of these senior notes and other similar instruments.
(2)The Level 3 estimated fair value was calculated based on inputs that are observable in the market or that could be derived from, or corroborated with, observable market data, including interest rates based on debt issued by parties with comparable credit ratings to us and inputs that are not observable in the market.

The estimated fair value of our credit facilities approximates the principal amount outstanding because the interest rates are variable and reflective of market rates and the debt may be repaid, in full or in part, at any time without penalty.
13

CHENIERE ENERGY PARTNERS, L.P. AND SUBSIDIARIES 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(unaudited)

NOTE 10—REVENUES FROM CONTRACTS WITH CUSTOMERS

The following table represents a disaggregation of revenue earned from contracts with customers (in millions):
Three Months Ended March 31,
20222021
LNG revenues$2,488 $1,669 
LNG revenues—affiliate757 214 
Regasification revenues68 67 
Other revenues15 13 
Total revenues$3,328 $1,963 

Contract Assets and Liabilities

The following table shows our contract assets, net of current expected credit losses, which are classified as other current assets and other non-current assets, net on our Consolidated Balance Sheets (in millions):
March 31,December 31,
20222021
Contract assets, net of current expected credit losses$1 $1 

The following table reflects the changes in our contract liabilities, which we classify as deferred revenue on our Consolidated Balance Sheets (in millions):
Three Months Ended March 31, 2022
Deferred revenue, beginning of period$155 
Cash received but not yet recognized in revenue116 
Revenue recognized from prior period deferral(155)
Deferred revenue, end of period$116 

The following table reflects the changes in our contract liabilities to affiliate, which we classify as deferred revenue—affiliate and other non-current liabilities—affiliate on our Consolidated Balance Sheets (in millions):
Three Months Ended March 31, 2022
Deferred revenue—affiliate, beginning of period$3 
Cash received but not yet recognized in revenue3 
Revenue recognized from prior period deferral(3)
Deferred revenue—affiliate, end of period$3 

Transaction Price Allocated to Future Performance Obligations

Because many of our sales contracts have long-term durations, we are contractually entitled to significant future consideration which we have not yet recognized as revenue. The following table discloses the aggregate amount of the transaction price that is allocated to performance obligations that have not yet been satisfied:
March 31, 2022December 31, 2021
Unsatisfied
Transaction Price
(in billions)
Weighted Average Recognition Timing (years) (1)Unsatisfied
Transaction Price
(in billions)
Weighted Average Recognition Timing (years) (1)
LNG revenues$51.2 8$49.3 9
LNG revenues—affiliate2.0 32.1 3
Regasification revenues1.8 41.9 4
Total revenues$55.0 $53.3 
(1)The weighted average recognition timing represents an estimate of the number of years during which we shall have recognized half of the unsatisfied transaction price.

14

CHENIERE ENERGY PARTNERS, L.P. AND SUBSIDIARIES 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(unaudited)
We have elected the following exemptions which omit certain potential future sources of revenue from the table above:
(1)We omit from the table above all performance obligations that are part of a contract that has an original expected duration of one year or less.
(2)The table above excludes substantially all variable consideration under our SPAs and TUAs. We omit from the table above all variable consideration that is allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct good or service that forms part of a single performance obligation when that performance obligation qualifies as a series. The amount of revenue from variable fees that is not included in the transaction price will vary based on the future prices of Henry Hub throughout the contract terms, to the extent customers elect to take delivery of their LNG, and adjustments to the consumer price index. Certain of our contracts contain additional variable consideration based on the outcome of contingent events and the movement of various indexes. We have not included such variable consideration in the transaction price to the extent the consideration is considered constrained due to the uncertainty of ultimate pricing and receipt. Approximately 67% and 51% of our LNG revenues from contracts included in the table above during the three months ended March 31, 2022 and 2021, respectively, were related to variable consideration received from customers. 100% of our LNG revenues—affiliate from contracts included in the table above during both the three months ended March 31, 2022 and 2021 were related to variable consideration received from customers. During the three months ended March 31, 2022 and 2021, approximately 6% and 3%, respectively, of our regasification revenues were related to variable consideration received from customers.

We may enter into contracts to sell LNG that are conditioned upon one or both of the parties achieving certain milestones such as reaching a final investment decision on a certain liquefaction Train, obtaining financing or achieving substantial completion of a Train and any related facilities. These contracts are considered completed contracts for revenue recognition purposes and are included in the transaction price above when the conditions are considered probable of being met.

NOTE 11—RELATED PARTY TRANSACTIONS
 
Below is a summary of our related party transactions as reported on our Consolidated Statements of Income (in millions):
Three Months Ended March 31,
20222021
LNG revenues—affiliate
Cheniere Marketing Agreements$