Annual report pursuant to Section 13 and 15(d)

LNG Inventory

v2.4.0.8
LNG Inventory
 12 Months Ended
Dec. 31, 2013
Inventory Disclosure [Abstract]  
LNG Inventory
LNG INVENTORY
 
LNG inventory is recorded at cost and is subject to lower of cost or market ("LCM") adjustments at the end of each period.  LNG inventory cost is determined using the average cost method. Our LCM adjustments primarily related to LNG inventory purchased to maintain the cryogenic readiness of the regasification facilities at the Sabine Pass LNG terminal that are recorded in LNG terminal operating expense on our Consolidated Statements of Operations. Recoveries of losses resulting from interim period LCM adjustments are recorded when market price recoveries occur on the same inventory in the same fiscal year.  These recoveries are recognized as gains in later interim periods with such gains not exceeding previously recognized losses.  As of December 31, 2013, we had 2,676,000 MMBtu of LNG inventory recorded at $10.6 million, and as of December 31, 2012, we had 2,298,000 MMBtu of LNG inventory recorded at $7.0 million on our Consolidated Balance Sheets. During the years ended December 31, 2013, 2012 and 2011, we recognized $26.9 million, $20.4 million and $11.0 million, respectively, as a result of LCM adjustments primarily related to LNG inventory purchased to maintain the cryogenic readiness of the regasification facilities at the Sabine Pass LNG terminal.