Annual report pursuant to Section 13 and 15(d)

Property, Plant and Equipment

v3.6.0.2
Property, Plant and Equipment
 12 Months Ended
Dec. 31, 2016
Property, Plant and Equipment [Abstract]  
Property, Plant and Equipment
PROPERTY, PLANT AND EQUIPMENT
 
Property, plant and equipment consists of LNG terminal costs and fixed assets and other, as follows (in thousands):
 
 
December 31,
 
 
2016
 
2015
LNG terminal costs
 
 
 
 
LNG terminal
 
$
7,973,741

 
$
2,487,759

LNG terminal construction-in-process
 
12,995,056

 
13,875,204

LNG site and related costs, net
 
40,951

 
33,512

Accumulated depreciation
 
(554,672
)
 
(413,545
)
Total LNG terminal costs, net
 
20,455,076

 
15,982,930

Fixed assets and other
 
 

 
 

Computer and office equipment
 
12,513

 
12,153

Furniture and fixtures
 
17,393

 
17,101

Computer software
 
85,164

 
69,340

Leasehold improvements
 
47,129

 
40,136

Land
 
60,582

 
60,612

Other
 
21,960

 
49,376

Accumulated depreciation
 
(64,523
)
 
(37,741
)
Total fixed assets and other, net
 
180,218

 
210,977

Property, plant and equipment, net
 
$
20,635,294

 
$
16,193,907



Depreciation expense during the years ended December 31, 2016, 2015 and 2014 was $172.6 million, $82.4 million and $64.2 million, respectively.

During the year ended December 31, 2016, we realized offsets to LNG terminal costs of $214.3 million that was related to the sale of commissioning cargoes because this amount was earned prior to the start of commercial operations, during the testing phase for the construction of Trains 1 and 2 of the SPL Project.

LNG Terminal Costs

The Sabine Pass LNG terminal is depreciated using the straight-line depreciation method applied to groups of LNG terminal assets with varying useful lives. The identifiable components of the Sabine Pass LNG terminal with similar estimated useful lives have a depreciable range between 6 and 50 years, as follows:
Components
 
Useful life (yrs)
LNG storage tanks
 
50
Natural gas pipeline facilities
 
40
Marine berth, electrical, facility and roads
 
35
Regasification processing equipment
 
30
Sendout pumps
 
20
Liquefaction processing equipment
 
6-50
Other
 
15-30

Fixed Assets and Other

Our fixed assets and other are recorded at cost and are depreciated on a straight-line method based on estimated lives of the individual assets or groups of assets.