Cheniere Energy Partners, L.P.

Volumes loaded and recognized from the Liquefaction Project

Net income

Net income declined by $41 million during the three months ended March 31, 2025 as compared to the same period of 2024. The decline was attributable to an $84 million unfavorable change in fair value of agreements accounted for as derivative instruments, partially offset by a $32 million increase in LNG revenues, net of cost of sales and excluding derivatives, and a $12 million decrease in interest expense, net of capitalized interest. The unfavorable change in fair value of agreements accounted for as derivative instruments was due to certain factors, including geopolitical and trade uncertainties, weather, transportation and storage, which generally resulted in widening market-based locational price differentials for U.S. natural gas deliveries and persistent global LNG and natural gas index price volatility.

The following is an additional discussion of the significant drivers of the variance in net income by line item:

Revenues

The $694 million increase in revenues during the three months ended March 31, 2025 as compared to the same period of 2024 was primarily attributable to a $733 million increase from higher pricing per MMBtu as a result of increased Henry Hub pricing, partially offset by a $63 million decrease from lower production volume largely due to having one less operating day during the three months ended March 31, 2025 as a result of 2024 being a leap year and increased operating and maintenance activities compared to the same period of 2024.

Operating costs and expenses

The $743 million increase in operating costs and expenses during the three months ended March 31, 2025 as compared to the same period of 2024 was primarily attributable to a $643 million increase in cost of natural gas feedstock, largely due to the increase in U.S. natural gas prices, and an $83 million decrease in gains from changes in fair value of agreements accounted for as derivative instruments included in cost of sales, as further described above under Net income.

Significant factor affecting our results of operations

Derivative instruments, which we use to manage certain risks, are reported at fair value in our Consolidated Financial Statements. For commodity derivative instruments, including those related to our IPM agreements, the underlying LNG sales being economically hedged are accounted for under the accrual method of accounting, whereby revenues expected to be derived from the future LNG sales are recognized only upon delivery or realization of the underlying transaction. Notwithstanding the operational intent to mitigate risk exposure over time, the recognition of derivative instruments at fair value has the effect of recognizing gains or losses relating to future period exposure, and given the significant volumes, long-term duration and volatility in price basis for certain of our derivative contracts, the use of derivative instruments may result in continued volatility of our results of operations based on changes in market pricing, counterparty credit risk and other relevant factors that may be outside of our control. For example, as described in Note 6—Derivative Instruments of our Notes to Consolidated Financial Statements, the fair value of the Liquefaction Supply Derivatives incorporates, as applicable, market participant-based assumptions pertaining to certain contractual uncertainties, including those related to the availability of market information for delivery points, which may require future development of infrastructure, as well as the timing of satisfaction of certain events or development of infrastructure to support natural gas gathering and transport. We may recognize changes in fair value through earnings that could significantly impact our results of operations if and when such uncertainties are resolved.