Cheniere Energy Partners (CQP) risk factors, FY2024 10-K

Risks Relating to Our Financial Matters

1. 01An inability to source capital to supplement our available cash resources and existing revolving credit facilities could cause us to have inadequate liquidity and could materially and adversely affect us
2. 02While substantially all of our long-term third party customer arrangements are executed with a creditworthy parent company or secured by a parent company guarantee or other form of collateral, we are nonetheless exposed to credit risk in the event of a customer default that requires us to seek recourse
3. 03We and our subsidiaries may be restricted under the terms of our and their indebtedness from making distributions under certain circumstances, which could materially and adversely affect our liquidity
4. 04Our use of derivative instruments, including our IPM agreements, to manage risks could adversely affect our earnings reported under GAAP and our liquidity
5. 05Restrictions in agreements governing us and our subsidiaries’ indebtedness may prevent us and our subsidiaries from engaging in certain beneficial transactions, which could materially and adversely affect us

Risks Relating to Our Operations and Industry

1. 06Catastrophic weather events or other disasters could result in an interruption of our operations, a delay in the construction of our Liquefaction Project, damage to our Liquefaction Project and increased insurance costs, all of which could adversely affect us
2. 07Disruptions to the third party supply of natural gas to our pipeline and facilities could have a material adverse effect on our business, contracts, financial condition, operating results, cash flow, liquidity and prospects
3. 08We may not be able to purchase or receive physical delivery of sufficient natural gas to satisfy our delivery obligations under the SPAs, which could have a material adverse effect on us
4. 09We are subject to significant construction and operating hazards and uninsured risks, one or more of which may create significant liabilities and losses for us
5. 10Cyclical or other changes in the demand for and price of LNG and natural gas may adversely affect our LNG business and the performance of our customers and could have a material adverse effect on our business, contracts, financial condition, operating results, cash flow, liquidity and prospects
6. 11Failure of exported LNG to be a long term competitive source of energy for international markets could adversely affect our customers and could materially and adversely affect our business, contracts, financial condition, operating results, cash flow, liquidity and prospects
7. 12We face competition based upon the international market price for LNG
8. 13Outbreaks of infectious diseases, such as COVID-19, at our facilities could adversely affect our operations or business

Risks Relating to Regulations

1. 14Our Creole Trail Pipeline and its FERC gas tariff are subject to FERC regulation. If we fail to comply with such regulation, we could be subject to substantial penalties and fines
2. 15Existing and future safety, environmental and similar laws and governmental regulations could result in increased compliance costs or additional operating costs or construction costs and restrictions
3. 16Pipeline safety and compliance programs and repairs may impose significant costs and liabilities on us

Risks Relating to Our Relationship with Our General Partner

1. 17We are entirely dependent on Cheniere, who owns our general partner, for key personnel, and the unavailability of skilled workers or Cheniere’s failure to attract and retain qualified personnel could adversely affect us. In addition, changes in our general partner’s executive officers could affect our business results
2. 18Our general partner and its affiliates have conflicts of interest and limited fiduciary duties, which may permit them to favor their own interests to the detriment of us and our unitholders

Risks Relating to an Investment in Us and Our Common Units

1. 19Our partnership agreement limits our general partner’s fiduciary duties to our unitholders and restricts the remedies available to our unitholders for actions taken by our general partner that might otherwise constitute breaches of fiduciary duty
2. 20Holders of our common units have limited voting rights and are not entitled to elect our general partner or its directors, which could reduce the price at which our common units trade
3. 21Any change of our general partner or the replacement of the board of directors or officers of our partnership, which can occur without the consent of our unitholders, can impact our future operations and have an adverse impact on the trading price of our common units
4. 22Our unitholders may not have limited liability if a court finds that unitholder action constitutes control of our business
5. 23Our unitholders may have liability to repay distributions wrongfully made

Risks Relating to Tax Matters

1. 24A successful IRS contest of the federal income tax positions that we take, may adversely impact the market for our common units, and the costs of any contest will be borne by our unitholders and our general partner
2. 25Our unitholders may be required to pay taxes on their share of our taxable income even if they do not receive any cash distributions from us
3. 26Tax gain or loss on the disposition of our common units could be different than expected
4. 27Tax-exempt entities face unique tax issues from owning common units that may result in adverse tax consequences to them
5. 28Our unitholders will likely be subject to state and local taxes and return filing requirements as a result of an investment in our common units
6. 29We have adopted certain valuation methodologies in determining a unitholder’s allocations of income, gain, loss and deduction. The IRS may challenge these methodologies or the resulting allocations, and such a challenge could adversely affect the value of our common units
7. 30Additions or changes in tax laws and regulations could potentially affect our financial results or liquidity