Commitments and Contingencies |
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| Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Commitments
We have various future commitments under executed contracts that include unconditional purchase obligations and other commitments which do not meet the definition of a liability as of December 31, 2023 and thus are not recognized as liabilities in our Consolidated Financial Statements.
EPC Contract
CCL has a lump sum turnkey contract with Bechtel Energy Inc. (“Bechtel”) for the engineering, procurement and construction of the Corpus Christi Stage 3 Project. The total contract price of the EPC contract is approximately $5.7 billion, inclusive of amounts incurred under change orders through December 31, 2023. As of December 31, 2023, we had approximately $2.9 billion remaining obligations under this contract.
Natural Gas Supply, Transportation and Storage Service Agreements
SPL and CCL have physical natural gas supply contracts to secure natural gas feedstock for the SPL Project and the CCL Project, respectively. As of December 31, 2023, the remaining fixed terms of these contracts ranged up to 15 years, with renewal options for certain contracts and some of which commence upon the satisfaction of certain events or states of affairs.
Additionally, SPL and CCL have natural gas transportation and storage service agreements for the SPL Project and the CCL Project, respectively. The initial fixed terms of the natural gas transportation agreements range up to 20 years, with renewal options for certain contracts and some of which commence upon the satisfaction of certain events or states of affairs. The initial fixed term of the natural gas storage service agreements ranges up to 10 years.
As of December 31, 2023, the obligations of SPL and CCL under natural gas supply, transportation and storage service agreements for contracts in which contractual conditions were met or are currently expected to be met were as follows (in billions):
(1)Pricing of natural gas supply agreements is based on estimated forward prices and basis spreads as of December 31, 2023. Pricing of IPM agreements is based on global gas market prices less fixed liquefaction fees and certain costs incurred by us. Global gas market prices are based on estimates as of December 31, 2023 to the extent forward prices are not available and assume the highest price in cases of price optionality available under the agreement. Some of our contracts may not have been negotiated as part of arranging financing for the underlying assets providing the natural gas supply, transportation and storage services.
(2)Includes $0.8 billion under natural gas supply agreements with unsatisfied contractual conditions.
(3)Includes $1.0 billion under natural gas transportation and storage service agreements with unsatisfied contractual conditions.
Other Agreements
We have certain fixed commitments under SPL’s partial TUA assignment agreement with TotalEnergies and other agreements of $1.4 billion. See Note 13—Revenues for further discussion of the partial TUA assignment.
We have approximately $3.8 billion of legally binding minimum payments primarily for vessel charters executed as of December 31, 2023 that will commence in future periods with fixed minimum lease terms of up to 15 years. See Note 12—Leases for further discussion of our leases, including leases for vessel charters that have not yet commenced as of December 31, 2023.
Environmental and Regulatory Matters
Our LNG terminals and pipelines are subject to extensive regulation under federal, state and local statutes, rules, regulations and laws. These laws require that we engage in consultations with appropriate federal and state agencies and that we obtain and maintain applicable permits and other authorizations. Failure to comply with such laws could result in legal proceedings, which may include substantial penalties. We believe that, based on currently known information, compliance with these laws and regulations will not have a material adverse effect on our results of operations, financial condition or cash flows.
Legal Proceedings
We are, and may in the future be, involved as a party to various legal proceedings, which are incidental to the ordinary course of business. We regularly analyze current information and, as necessary, provide accruals for probable liabilities on the eventual disposition of these matters. We recognize legal costs in connection with legal and regulatory matters as they are incurred. While the results of these litigation matters and claims cannot be predicted with certainty, we believe the reasonably possible losses from such matters, individually and in the aggregate, are not material. Additionally, we believe the probable final outcome of such matters will not have a material impact on our operating results, financial position or cash flows.
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