CHENIERE ENERGY PARTNERS, L.P. Information Regarding Forward-Looking Statements
This quarterly report contains certain statements that are, or may be deemed to be, "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). All statements, other than statements of historical or present facts or conditions, included herein or incorporated herein by reference are "forward-looking statements." Included among "forward-looking statements" are, among other things:
•statements regarding our ability to pay distributions to our unitholders;
•statements regarding our expected receipt of cash distributions from SPLNG, SPL or CTPL;
•statements that we expect to commence or complete construction of our proposed LNG terminal, liquefaction facility, pipeline facility or other projects, or any expansions or portions thereof, by certain dates, or at all; •statements regarding future levels of domestic and international natural gas production, supply or consumption or future levels of LNG imports into or exports fromNorth America and other countries worldwide or purchases of natural gas, regardless of the source of such information, or the transportation or other infrastructure or demand for and prices related to natural gas, LNG or other hydrocarbon products;
•statements regarding any financing transactions or arrangements, or our ability to enter into such transactions;
•statements regarding our future sources of liquidity and cash requirements;
•statements relating to the construction of our Trains, including statements concerning the engagement of any EPC contractor or other contractor and the anticipated terms and provisions of any agreement with any EPC or other contractor, and anticipated costs related thereto;
•statements regarding any SPA or other agreement to be entered into or performed substantially in the future, including any revenues anticipated to be received and the anticipated timing thereof, and statements regarding the amounts of total LNG regasification, natural gas liquefaction or storage capacities that are, or may become, subject to contracts;
•statements regarding counterparties to our commercial contracts, construction contracts and other contracts;
•statements regarding our planned development and construction of additional Trains, including the financing of such Trains;
•statements that our Trains, when completed, will have certain characteristics, including amounts of liquefaction capacities;
•statements regarding our business strategy, our strengths, our business and operation plans or any other plans, forecasts, projections, or objectives, including anticipated revenues, capital expenditures, maintenance and operating costs and cash flows, any or all of which are subject to change;
•statements regarding legislative, governmental, regulatory, administrative or other public body actions, approvals, requirements, permits, applications, filings, investigations, proceedings or decisions;
•statements regarding the COVID-19 pandemic and its impact on our business and operating results, including any customers not taking delivery of LNG cargoes, the ongoing creditworthiness of our contractual counterparties, any disruptions in our operations or construction of our Trains and the health and safety of Cheniere's employees, and on our customers, the global economy and the demand for LNG; and
•any other statements that relate to non-historical or future information.
All of these types of statements, other than statements of historical or present
facts or conditions, are forward-looking statements. In some cases,
forward-looking statements can be identified by terminology such as "may,"
"will," "could," "should," "achieve," "anticipate," "believe," "contemplate,"
"continue," "estimate," "expect," "intend," "plan," "potential," "predict,"
"project," "pursue," "target," the negative of such terms or other comparable
terminology. The forward-looking statements contained in this quarterly report
are largely based on our expectations, which reflect estimates and assumptions
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made by our management. These estimates and assumptions reflect our best judgment based on currently known market conditions and other factors. Although we believe that such estimates are reasonable, they are inherently uncertain and involve a number of risks and uncertainties beyond our control. In addition, assumptions may prove to be inaccurate. We caution that the forward-looking statements contained in this quarterly report are not guarantees of future performance and that such statements may not be realized or the forward-looking statements or events may not occur. Actual results may differ materially from those anticipated or implied in forward-looking statements as a result of a variety of factors described in this quarterly report and in the other reports and other information that we file with theSEC , including those discussed under "Risk Factors" in our annual report on Form 10-K for the fiscal year endedDecember 31 , 202 1 . All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these risk factors. These forward-looking statements speak only as of the date made, and other than as required by law, we undertake no obligation to update or revise any forward-looking statement or provide reasons why actual results may differ, whether as a result of new information, future events or otherwise.
Introduction
The following discussion and analysis presents management's view of our business, financial condition and overall performance and should be read in conjunction with our Consolidated Financial Statements and the accompanying notes. This information is intended to provide investors with an understanding of our past performance, current financial condition and outlook for the future.
Our discussion and analysis includes the following subjects:
• Overview
• Overview of Significant Events
• Results of Operations
• Liquidity and Capital Resources
• Summary of Critical Accounting Estimates
• Recent Accounting Standards
Overview
We are a publicly tradedDelaware limited partnership formed by Cheniere in 2006. We provide clean, secure and affordable LNG to integrated energy companies, utilities and energy trading companies around the world. We aspire to conduct our business in a safe and responsible manner, delivering a reliable, competitive and integrated source of LNG to our customers. LNG is natural gas (methane) in liquid form. The LNG we produce 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. Natural gas is a cleaner-burning, abundant and affordable source of energy. When LNG is converted back to natural gas, it can be used instead of coal, which reduces the amount of pollution traditionally produced from burning fossil fuels, like sulfur dioxide and particulate matter that enters the air we breathe. Additionally, compared to coal, it produces significantly fewer carbon emissions. By liquefying natural gas, we are able to reduce its volume by 600 times so that we can load it onto special LNG carriers designed to keep the LNG cold and in liquid form for efficient transport overseas. We own the natural gas liquefaction and export facility inCameron Parish, Louisiana atSabine Pass (the "Sabine Pass LNG Terminal "), one of the largest LNG production facilities in the world, which has six operational Trains, with Train 6 achieving substantial completion onFebruary 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 with aggregate capacity of approximately 17 Bcfe, 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. We also own a 94-mile pipeline through our subsidiary, CTPL, that interconnects theSabine Pass LNG Terminal with a number of large interstate pipelines (the "Creole Trail Pipeline"). 23 -------------------------------------------------------------------------------- Table of Contents Our customer arrangements provide us with significant, stable and long-term cash flows. We contract our anticipated production capacity under SPAs, in which our customers are generally required to pay a fixed fee with respect to the contracted volumes irrespective of their election to cancel or suspend deliveries of LNG cargoes, and under IPM agreements, in which the gas producer sells gas on a global LNG index price, less a fixed liquefaction fee, shipping and other costs. Our long-term customer arrangements form the foundation of our business and provide us with significant, stable, long-term cash flows. We have contracted approximately 80% of the total production capacity from theLiquefaction Project with approximately 16 years of weighted average remaining life as ofMarch 31, 2022 . InMarch 2022 , theDOE authorized the export of an additional 152.64 Bcf/yr of domestically produced LNG by vessel from theSabine Pass LNG Terminal throughDecember 31, 2050 to non-FTA countries, that were previously authorized for FTA countries only. For further discussion of the contracted future cash flows under our revenue arrangements, see the liquidity and capital resources disclosures in our annual report on Form 10-K for the fiscal year en dedDecember 31, 2021 . We remain focused on operational excellence and customer satisfaction. Increasing demand for LNG has allowed us to expand our liquefaction infrastructure in a financially disciplined manner. We have increased available liquefaction capacity at ourLiquefaction Project as a result of debottlenecking and other optimization projects. We hold a significant land position at theSabine Pass LNG Terminal , which provides opportunity for further liquefaction capacity expansion. The development of this site or other projects, including infrastructure projects in support of natural gas supply and LNG demand, will require, among other things, acceptable commercial and financing arrangements before we can make a final investment decision ("FID"). Additionally, we are committed to the responsible and proactive management of our most important environmental, social and governance ("ESG") impacts, risks and opportunities. Cheniere published its 2020 Corporate Responsibility ("CR") report, which details our strategy and progress on ESG issues, as well as our efforts on integrating climate considerations into our business strategy and taking a leadership position on increased environmental transparency, including conducting a climate scenario analysis and our plan to provide LNG customers with Cargo Emission Tags. InApril 2022 , Cheniere announced a collaboration with natural gas midstream companies, methane detection technology providers and leading academic institutions to implement quantification, monitoring, reporting and verification of greenhouse gas emissions at natural gas gathering, processing, transmission and storage systems specific to our supply chain. Cheniere's CR report is available at cheniere.com/IMPACT. Information on our website, including the CR report, is not incorporated by reference into this Quarterly Report on Form 10-Q.
Overview of Significant Events
Our significant events since
Strategic
•In
•Cheniere Marketing, LLC entered into agreements to novate to SPL SPAs entered into withENN LNG (Singapore) Pte Ltd. and a subsidiary of Glencore plc, with effective dates ofJanuary 1, 2023 andFebruary 17, 2022 , respectively, aggregating approximately 21 million tonnes of LNG to be delivered between 2023 and 2035. •Our Board of Directors approved the entry by SPL into (i) an agreement to novate to SPL an IPM agreement betweenCheniere Corpus Christi Liquefaction Stage III, LLC ("CCL Stage III"), a wholly owned subsidiary of Cheniere (as purchaser), andTourmaline Oil Marketing Corp. , a subsidiary of Tourmaline Oil Corp (as supplier), to purchase 140,000 MMBtu per day of natural gas at a price based on the Platts Japan Korea Marker ("JKM"), for a term of approximately 15 years beginning in early 2023 (the "Tourmaline IPM") and (ii) a free on board SPA withCheniere Marketing International LLP to sell LNG associated with the natural gas to be supplied under the IPM agreement. The agreement to assign the Tourmaline IPM agreement from CCL Stage III to SPL was executed and the assignment was effective onMarch 15, 2022 . 24
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Operational
•As of
•On
Financial •InFebruary 2022 , we announced the initiation of quarterly distributions to be comprised of a base amount plus a variable amount, which began with the distribution related to the first quarter of 2022. The common unit distribution with respect to the first quarter of 2022 is comprised of a base amount equal to$0.775 ($3.10 annualized), and a variable amount equal to the remaining available cash per unit or$0.275 , which takes into consideration, among other things, amounts reserved for annual debt repayment and capital allocation goals, anticipated capital expenditures to be funded with cash, and cash reserves to provide for the proper conduct of the business.
Results of Operations
The following charts summarize the total revenues and total LNG volumes loaded from ourLiquefaction Project during the three months endedMarch 31, 2022 and 2021:
[[Image Removed: cqp-20220331_g2.jpg]][[Image Removed: cqp-20220331_g3.jpg]]
(1) The three months ended
affiliate's facility.
Net income
Three Months Ended March 31,
(in millions, except per share data) 2022 2021 Variance
Net income $ 159 $ 347 $ (188)
Basic and diluted net income (loss) per
common unit (0.11) 0.64 (0.75)
Net income decreased by $188 million during the three months ended March 31,
2022 from the comparable period in 2021, primarily a result of a loss on the
derivative liability associated with the Tourmaline IPM agreement following its
assignment to SPL from CCL Stage III in March 2022 . See Overview of Significant
Events for further discussion of the assignment. The associated loss following
the assignment was primarily attributed to SPL's lower credit risk profile
relative to that of CCL Stage III, resulting in a higher derivative liability
given reduced risk of SPL's own nonperformance.
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We enter into derivative instruments to manage our exposure to commodity-related
marketing and price risk. Derivative instruments are reported at fair value on
our Consolidated Financial Statements. In some cases, the underlying
transactions being economically hedged are accounted for under the accrual
method of accounting, whereby revenues and expenses are recognized only upon
delivery, receipt or realization of the underlying transaction. Because the
recognition of derivative instruments at fair value has the effect of
recognizing gains or losses relating to future period exposure, and given the
significant volumes, long-term duration and volatility in price basis for
certain of our derivative contracts, use of derivative instruments may result in
continued volatility of our results of operations based on changes in market
pricing, counterparty credit risk and other relevant factors, notwithstanding
the operational intent to mitigate risk exposure over time.
Revenues
Three Months Ended March 31,
(in millions, except volumes) 2022 2021 Variance
LNG revenues $ 2,488 $ 1,669 $ 819
LNG revenues-affiliate 757 214 543
Regasification revenues 68 67 1
Other revenues 15 13 2
Total revenues $ 3,328 $ 1,963 $ 1,365
LNG volumes recognized as revenues (in TBtu) (1) 372 325 47
(1)The three months ended
Total revenues increased by approximately$1.4 billion during the three months endedMarch 31, 2022 , from the comparable period in 2021, primarily due to increased revenues per MMBtu as a result of increases inHenry Hub prices and, to a lesser extent, higher volumes of LNG delivered between the periods as a result of production from Train 6 of theLiquefaction Project , which achieved substantial completion onFebruary 4, 2022 . Prior to substantial completion of a Train, amounts received from the sale of commissioning cargoes from that Train are offset against LNG terminal construction-in-process, because these amounts are earned or loaded during the testing phase for the construction of that Train. During the three months endedMarch 31, 2022 , we realized offsets to LNG terminal costs of$148 million , corresponding to 13 TBtu that were related to the sale of commissioning cargoes from theLiquefaction Project . We did not realize any offsets to LNG terminal costs during the three months endedMarch 31, 2021 .
Also included in LNG revenues are sales of certain unutilized natural gas
procured for the liquefaction process and gains and losses from derivative
instruments, which include the realized value associated with a portion of
derivative instruments that settle through physical delivery. We recognized
revenues of
Operating costs and expenses
Three Months Ended March 31,
(in millions) 2022 2021 Variance
Cost of sales $ 2,562 $ 948 $ 1,614
Cost of sales-affiliate 5 42 (37)
Operating and maintenance expense 170 149 21
Operating and maintenance expense-affiliate 38 34 4 Operating and maintenance expense-related party 12 10 2 General and administrative expense 3 2 1 General and administrative expense-affiliate 23 21 2 Depreciation and amortization expense 153 139
14
Total operating costs and expenses$ 2,966 $ 1,345 $ 1,621 Total operating costs and expenses increased during the three months endedMarch 31, 2022 from the three months endedMarch 31, 2021 , primarily as a result of increased cost of sales. Cost of sales includes costs incurred directly for the production and delivery of LNG from theLiquefaction Project , to the extent those costs are not utilized for the commissioning process. Cost of sales increased during the three months endedMarch 31, 2022 from the comparable 2021 period primarily as a 26 -------------------------------------------------------------------------------- Table of Contents result of the increased cost of natural gas feedstock as a result of higher US natural gas prices and, to a lesser extent, from increased volume of LNG delivered. Cost of sales also includes change in fair value of commodity derivatives to secure natural gas feedstock for theLiquefaction Project , costs associated with the sale of certain unutilized natural gas procured for the liquefaction process, variable transportation and storage costs and other costs to convert natural gas into LNG. During the three months endedMarch 31, 2022 , cost of sales additionally included an unfavorable change in the valuation associated with the Tourmaline IPM agreement that was assigned to SPL inMarch 2022 , primarily as a result of credit risk as described in the Net income section above. Operating and maintenance expense (including affiliate and related party) primarily includes costs associated with operating and maintaining theLiquefaction Project . During the three months endedMarch 31, 2022 , operating and maintenance expense increased from the comparable period in 2021, primarily due to increased natural gas transportation and storage capacity demand charges, generally as a result of an additional Train in operation during the three months endedMarch 31, 2022 . Operating and maintenance (including affiliates) also includes third party service and maintenance, insurance, regulatory costs and other operating costs. Other income (expense) Three Months Ended March 31, (in millions) 2022 2021 Variance Interest expense, net of capitalized interest$ 203 $ 217 $ (14) Loss on modification or extinguishment of debt - 54 (54) Total other expense$ 203 $ 271 $ (68) Interest expense, net of capitalized interest, decreased during the three months endedMarch 31, 2022 from the comparable period in 2021 primarily as a result of the reduction of outstanding debt between the periods, which was offset by the reduction in the portion of total interest costs eligible for capitalization as construction of Train 6 of theLiquefaction Project , which achieved substantial completion onFebruary 4, 2022 . During the three months endedMarch 31, 2022 and 2021, we incurred$224 million and$247 million of total interest cost, respectively, of which we capitalized$21 million and$30 million , respectively. Loss on modification or extinguishment of debt decreased during the three months endedMarch 31, 2022 from the comparable period in 2021 due to the recognition of debt extinguishment costs relating to the payment of early redemption fees and premiums and write off of unamortized debt issuance costs with the redemption of the 5.250% Senior Notes due 2025 (the "2025 CQP Senior Notes"). 27 -------------------------------------------------------------------------------- Table of Contents Liquidity and Capital Resources The following information describes our ability to generate and obtain adequate amounts of cash to meet our requirements in the short term and the long term. In the short term, we expect to meet our cash requirements using operating cash flows and available liquidity, consisting of cash and cash equivalents, restricted cash and cash equivalents and available commitments under our credit facilities. In the long term, we expect to meet our cash requirements using operating cash flows and other future potential sources of liquidity, which may include debt offerings by us or our subsidiaries and equity offerings by us. The table below provides a summary of our available liquidity (in millions). Future material sources of liquidity are discussed below. March 31, 2022 Cash and cash equivalents $ 1,156
Restricted cash and cash equivalents designated for the
136
Available commitments under our credit facilities (1):
832
CQP Credit Facilities executed in 2019 750
Total available commitments under our credit facilities 1,582
Total available liquidity $ 2,874
(1)Available commitments represent total commitments less loans outstanding and
letters of credit issued under each of our credit facilities as of March 31,
2022. See Note 9 -Debt of our Notes to Consolidated Financial
Statements for additional information on our credit facilities and other debt
instruments.
Our liquidity position subsequent to March 31, 2022 is driven by future sources
of liquidity and future cash requirements. Future sources of liquidity are
expected to be composed of (1) cash receipts from executed contracts, under
which we are contractually entitled to future consideration, and (2) additional
sources of liquidity, from which we expect to receive cash although the cash is
not underpinned by executed contracts. Future cash requirements are expected to
be composed of (1) cash payments under executed contracts, under which we are
contractually obligated to make payments, and (2) additional cash requirements,
under which we expect to make payments although we are not contractually
obligated to make the payments under executed contracts.
Although material sources of liquidity and material cash requirements are
presented below from a consolidated standpoint, we and our subsidiary SPL
operate with independent capital structures. Certain restrictions under debt
instruments executed by our subsidiaries limit its ability to distribute cash,
including the following:
•SPL is required to deposit all cash received into restricted cash and cash
equivalents accounts under certain of their debt agreements. The usage or
withdrawal of such cash is restricted to the payment of liabilities related to
the Liquefaction Project and other restricted payments. The majority of the cash
held by SPL that is restricted to CQP relates to advance funding for operation
and construction of the Liquefaction Project ; and
•SPL is restricted by affirmative and negative covenants included in certain of its debt agreements in its ability to make certain payments, including distributions, unless specific requirements are satisfied.
Notwithstanding the restrictions noted above, we believe that sufficient flexibility exists to enable each independent capital structure to meet its currently anticipated cash requirements. The sources of liquidity at SPL primarily fund the cash requirements of SPL, and any remaining liquidity not subject to restriction, as supplemented by liquidity provided by SPLNG, is available to enable CQP to meet its cash requirements.
Supplemental Guarantor Information
The$1.5 billion of 4.500% Senior Notes due 2029, the$1.5 billion of 4.000% Senior Notes due 2031 and the$1.2 billion of 3.25% Senior Notes due 2032 (collectively, the "CQP Senior Notes"), are jointly and severally guaranteed by each of our subsidiaries other than SPL and, subject to certain conditions governing its guarantee,Sabine Pass LP (each a "Guarantor" and collectively, the "CQP Guarantors"). 28 -------------------------------------------------------------------------------- Table of Contents The CQP Guarantors' guarantees are full and unconditional, subject to certain release provisions including (1) the sale, disposition or transfer (by merger, consolidation or otherwise) of the capital stock or all or substantially all of the assets of the CQP Guarantors, (2) upon the liquidation or dissolution of a Guarantor, (3) following the release of a Guarantor from its guarantee obligations and (4) upon the legal defeasance or satisfaction and discharge of obligations under the indenture governing the CQP Senior Notes. In the event of a default in payment of the principal or interest by us, whether at maturity of the CQP Senior Notes or by declaration of acceleration, call for redemption or otherwise, legal proceedings may be instituted against the CQP Guarantors to enforce the guarantee. The rights of holders of the CQP Senior Notes against the CQP Guarantors may be limited under theU.S. Bankruptcy Code or state fraudulent transfer or conveyance law. Each guarantee contains a provision intended to limit the Guarantor's liability to the maximum amount that it could incur without causing the incurrence of obligations under its guarantee to be a fraudulent conveyance or transfer underU.S. federal or state law. However, there can be no assurance as to what standard a court will apply in making a determination of the maximum liability of the CQP Guarantors. Moreover, this provision may not be effective to protect the guarantee from being voided under fraudulent conveyance laws. There is a possibility that the entire guarantee may be set aside, in which case the entire liability may be extinguished. The following tables include summarized financial information of CQP ("Parent Issuer"), and the CQP Guarantors (together with the Parent Issuer, the "Obligor Group ") on a combined basis. Investments in and equity in the earnings of SPL and, subject to certain conditions governing its guarantee,Sabine Pass LP (collectively with SPL, the "Non-Guarantors"), which are not currently members of theObligor Group , have been excluded. Intercompany balances and transactions between entities in theObligor Group have been eliminated. Although the creditors of theObligor Group have no claim against the Non-Guarantors, theObligor Group may gain access to the assets of the Non-Guarantors upon bankruptcy, liquidation or reorganization of the Non-Guarantors due to its investment in these entities. However, such claims to the assets of the Non-Guarantors would be subordinated to the any claims by the Non-Guarantors' creditors, including trade creditors. Summarized Balance Sheets (in millions) March 31, December 31, 2022 2021 ASSETS Current assets Cash and cash equivalents $ 1,156 $ 876 Accounts receivable from Non-Guarantors 25 49 Other current assets 49 53 Current assets-affiliate 145 137 Current assets with Non-Guarantors 1 1 Total current assets 1,376 1,116 Property, plant and equipment, net of accumulated depreciation 2,401 2,422 Other non-current assets, net 116 119 Total assets $ 3,893 $ 3,657 LIABILITIES Current liabilities Due to affiliates $ 147 $ 167 Deferred revenue from Non-Guarantors 22 22 Other current liabilities 109 95 Total current liabilities 278 284
Long-term debt, net of premium, discount and debt issuance costs
4,155 4,154
Other non-current liabilities 86 87
Non-current liabilities-affiliate 15 15
Total liabilities $ 4,534 $ 4,540
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Table of Contents Summarized Statement of Income (in millions) Three Months Ended March 31, 2022 Revenues $ 85 Revenues from Non-Guarantors 133 Total revenues 218 Operating costs and expenses 48 Operating costs and expenses-affiliate
49
Total operating costs and expenses 97 Income from operations 120 Net income 75 Sources and Uses of Cash The following table summarizes the sources and uses of our cash, cash equivalents and restricted cash and cash equivalents for the three months endedMarch 31, 2022 and 2021 (in millions). The table presents capital expenditures on a cash basis; therefore, these amounts differ from the amounts of capital expenditures, including accruals, which are referred to elsewhere in this report. Additional discussion of these items follows the table. Three Months Ended March 31, 2022 2021 Net cash provided by operating activities $ 800$ 588 Net cash used in investing activities (87) (146) Net cash used in financing activities (395) (407) Net increase in cash and cash equivalents and restricted cash and cash equivalents $ 318$ 35 Operating Cash Flows Our operating cash net inflows during the three months endedMarch 31, 2022 and 2021 were$800 million and$588 million , respectively. The$212 million increase in operating cash inflows in 2022 compared to 2021 was primarily related to increases in cash payments on LNG delivered due to increases in price per MMBtu and volume delivered, partially offset by higher operating cash outflows primarily due to higher natural gas feedstock costs.
Investing Cash Flows
Cash outflows for property, plant and equipment were primarily for the
construction costs for Train 6 of the
Financing Cash Flows
During the three months endedMarch 31, 2021 , we issued an aggregate principal amount of$1.5 billion of the 2031 CQP Senior Notes and incurred$19 million of debt issuance costs related to this issuance. The proceeds of this issuance, together with cash on hand, were used to redeem all the outstanding 2025 CQP Senior Notes, and we paid$40 million of debt extinguishment costs, mainly related to premiums associated with this redemption. We did not have any debt activity during the three months endedMarch 31, 2022 . 30 -------------------------------------------------------------------------------- Table of Contents Cash Distributions to Unitholders 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). 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. The following provides a summary of distributions paid by us during the three months endedMarch 31, 2022 and 2021: Total Distribution (in millions) Period Covered by Distribution Per General Partner Incentive Date Paid Distribution Common Unit Common Units Units Distribution Rights October 1 - December 31, February 14, 2022 2021 $ 0.700$ 339 $ 8 $ 47 October 1 - December 31, February 12, 2021 2020 0.655 316 7 27 In addition, Tug Services distributed$1 million during each of the three months endedMarch 31, 2022 and 2021 to Cheniere Terminals in accordance with their terminal marine service agreement, which is recognized as part of the distributions to our general partner interest holders. OnApril 25, 2022 , we declared a cash distribution of$1.050 per common unit to unitholders of record as ofMay 5, 2022 and the related general partner distribution to be paid onMay 13, 2022 . These distributions consist of a base amount of$0.775 per unit and a variable amount of$0.275 per unit.
Summary of Critical Accounting Estimates
The preparation of Consolidated Financial Statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and the accompanying notes. There have been no significant changes to our critical accounting estimates from those disclosed in our annual report on Form 10-K for the fiscal ye arDecember 31, 2021 .
Recent Accounting Standards
For a summary of recently issued accounting standards, see Note
1 - Nature of Operations and Basis of Presentation of our Notes to Consolidated Financial Statements.
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