Annual report pursuant to Section 13 and 15(d)

Property, Plant and Equipment

v3.8.0.1
Property, Plant and Equipment
 12 Months Ended
Dec. 31, 2017
Property, Plant and Equipment [Abstract]  
Property, Plant and Equipment
PROPERTY, PLANT AND EQUIPMENT
 
Property, plant and equipment, net consists of LNG terminal costs and fixed assets and other, as follows (in millions):
 
 
December 31,
 
 
2017
 
2016
LNG terminal costs
 
 
 
 
LNG terminal
 
$
12,687

 
$
7,978

LNG terminal construction-in-process
 
11,932

 
12,995

LNG site and related costs
 
86

 
41

Accumulated depreciation
 
(882
)
 
(555
)
Total LNG terminal costs, net
 
23,823

 
20,459

Fixed assets and other
 
 

 
 

Computer and office equipment
 
14

 
13

Furniture and fixtures
 
19

 
17

Computer software
 
92

 
85

Leasehold improvements
 
41

 
43

Land
 
59

 
61

Other
 
16

 
22

Accumulated depreciation
 
(86
)
 
(65
)
Total fixed assets and other, net
 
155

 
176

Property, plant and equipment, net
 
$
23,978

 
$
20,635



Depreciation expense during the years ended December 31, 2017, 2016 and 2015 was $354 million, $173 million and $82 million, respectively.

We realized offsets to LNG terminal costs of $320 million and $214 million in the years ended December 31, 2017 and 2016, respectively, that were related to the sale of commissioning cargoes because these amounts were earned or loaded prior to the start of commercial operations of the respective Train of the SPL Project, during the testing phase for its construction.

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.