Cheniere Energy, Inc. · NYSE:LNG
Cheniere Energy — Investor Presentation (December 2019)
44 slides from Cheniere Energy's investor presentation, Dec 10, 2019
Slide 1: Corporate Presentation December 2019
CHENIERE ENERGY, INC. CHENIERE ENERGY, INC. NYSE American: LNG Corporate Presentation December 2019
Slide 2: Safe Harbor Statements
Safe Harbor Statements Forward-Looking Statements This presentation contains certain statements that are, or may be deemed to be, “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amend
Slide 3: Company Overview
CHENIERE ENERGY, INC. COMPANY OVERVIEW
Slide 4: 2019 Highlights
2019 Highlights Execution Growth Financial Corpus Christi Liquefaction Increased Run-Rate Production and Guidance Positive Final Investment Decision Old New Train 1 Completed February ($ billions, production mtpa per Train) DFCD Achieved June Sabine Pass Train 6 Production (20-year avg.) 4.4 - 4.9 4
Slide 5: Vision: To Provide Clean, Secure, and Affordable Energy to the World
Vision: To Provide Clean, Secure, and Affordable Energy to the World Customer Focus Liquefaction Platform Growth Leverage expansive infrastructure footprint, Focus on long-term relationships with 13 operating expertise, and increasing balance long-term customer contracts in effect and 7 sheet streng
Slide 6: Building an Industry Leading U.S. LNG Export Platform
Building an Industry Leading U.S. LNG Export Platform Sabine Pass Liquefaction Project ~30 mtpa(1) Liquefaction Capacity ▪ Trains 1-5 operating, contracts with long-term buyers commenced ▪ Train 6 under construction, est. completion 1H 2023 Corpus Christi LNG Terminal ~15 mtpa(1) Liquefaction Capaci
Slide 7: Integrated Platform Creates Commercial Advantage
Integrated Platform Creates Commercial Advantage Market leading position along the value chain GAS SUPPLY LIQUEFACTION PORTFOLIO OPTIMIZATION Strong relationships, scale and diversity Best-in-class operations, economically- Commercial flexibility and global market difficult to replicate advantaged e
Slide 8: Stable, Contracted Cash Flows from Creditworthy Customers
Stable, Contracted Cash Flows from Creditworthy Customers ▪ “Take or pay” style long-term agreements with ~$5.5bn of annual fixed fees(1) ▪ All counterparties rated as investment grade by at least two of the three major agencies (S&P, Moody’s, Fitch) or deemed creditworthy by lenders ▪ Average portf
Slide 9: Cheniere LNG Exports More Than Cargoes
Cheniere LNG Exports More Than 850 Cargoes (~60 Million Tonnes) Exported from our Liquefaction Projects London, U.K. Washington, DC Beijing, China Tokyo, Japan Houston, TX Singapore Cheniere LNG Exports by Destination Region MT 10 8 6 4 2 0 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Sources: Ch
Slide 10: Cheniere: A Top Global LNG Supplier and Operator
Cheniere: A Top Global LNG Supplier and Operator Became the 4th Largest Global LNG Supplier in 2019 Construction Time: FID to Project Startup Volumes for projects existing and under construction Seven trains brought online ahead of schedule and within budget mtpa Months with a 42-44 month constructi
Slide 11: Competitive Differentiators Drive Continued Growth
Competitive Differentiators Drive Continued Growth Over 9 mtpa of long-term deals executed since early 2018 Capitalizing on competitive strengths to provide a differentiated product and underwrite new liquefaction capacity Transaction Features: Liquefaction Capacity ✓ Early Volumes ✓ Delivered Volum
Slide 12: Integrated Production Marketing (IPM) Transactions
Integrated Production Marketing (IPM) Transactions Continued Innovation Driving Commercial Success: FOB + DES + IPM How IPM Works Core Principles ▪ Producers will sell natural gas to Cheniere (Corpus Christi) on a ▪ Provides producers long-term, reliable market ensuring gas flows long-term basis ▪ P
Slide 13: Positioned for Growth in Corpus Christi Stage 3
Positioned for Growth in Corpus Christi Stage 3 Corpus Christi Stage 3 ▪ FERC approval received November 2019 ▪ ~10 mtpa incremental liquefaction capacity ▪ Seven midscale liquefaction trains ▪ Stage 3 to share significant infrastructure with Stages 1 & 2 ▪ Final Investment Decision (FID) targeted i
Slide 14: Cheniere Investment Thesis
Cheniere Investment Thesis Premier LNG provider with substantial asset platform and proven track record of execution Full-service LNG offering enables solutions tailored to customer needs Significant, stable, long-term cash flows from take-or-pay style agreements with creditworthy counterparties Pot
Slide 15: Liquefaction Projects Update
LIQUEFACTION PROJECTS UPDATE
Slide 16: Leading Project Partners
Leading Project Partners Sabine Pass Liquefaction Project Corpus Christi Liquefaction Terminal Reliable Proven Partners Creditworthy Counterparties 16 Note: SPA counterparties exclude SPAs with Cheniere Marketing which have not been assigned to a specific Train or project.
Slide 17: Operational Excellence Drives Asset Optimization
Operational Excellence Drives Asset Optimization Maintenance optimization, production optimization, and debottlenecking opportunities have led to higher expected run-rate production levels Trains Operational Run-Rate Adjusted Nominal Liquefaction Capacity Per Train Range 3 April 4.3 4.6 MTPA MTPA 20
Slide 18: Sabine Pass Liquefaction Update
Sabine Pass Liquefaction Update Total Investment: ~$22B Liquefaction Operations ✓ 5 Trains in operation ✓ Increased production via maintenance optimization and debottlenecking ✓ ~800 cargoes produced and exported Growth ✓ Train 6 positive FID May 2019 ▪ Expected completion 1H 2023 ▪ Project completi
Slide 19: Corpus Christi Liquefaction Update
Corpus Christi Liquefaction Update Total Investment: ~$16B Liquefaction Operations ✓ 2 Trains in Operation ✓ Increased production via maintenance optimization and debottlenecking ✓ >50 cargoes produced and exported Growth ✓ Train 3 under construction ▪ Expected completion 1H 2021 ▪ Project completio
Slide 20: LNG Market Update
LNG MARKET UPDATE
Slide 21: Current LNG Market Dynamics
Current LNG Market Dynamics YoY LNG Supply Growth per Quarter Europe Continued Absorbing Market Oversupply MT MT LNG Imports: Europe 14 9 12 4Q18 – 3Q19 Avg. 10 6 8 1Q16 – 3Q18 Avg. 6 4 3 2 5-Yr Range 0 2018 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2019 0 2016 2017 2018 2019 Jan Feb Mar Apr May
Slide 22: Supply Growth Continued Pressure on Market Pricing
Supply Growth Continued Pressure on Market Pricing 2019 Incremental Global LNG Supply/Demand Year over Year Supply / Demand Variance 3Q 2018 vs. 3Q 2019 MT MT 14 14 Global Supply LNG Demand LNG Supply 12 Asia Demand 10 12 2.3 8 6 4 (0.7) 9.75 2 10 2.6 0 (1.2) Other -2 1Q 2018 2Q 2018 3Q 2018 4Q 2018
Slide 23: Europe Continuing to Absorb LNG Supply Growth
Europe Continuing to Absorb LNG Supply Growth LNG Imports in Europe Gas Storage in Europe Gas Power Generation in Europe MT 9 % of Full aGWh/d Germany France Italy Spain 100 2000 8 75 1500 7 50 1000 5-Yr Range 25 2019 500 6 2018 0 0 5 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Q3 2018 Q3 2019 T
Slide 24: Asian LNG Demand Markets
Asian LNG Demand Markets Asia LNG Imports China Coal-Fired Power Capacity China Gas-Fired Power Capacity MT GW GW 25 Coal Capacity Gas Capacity 1200 Coal Share in Power Capacity Mix 70% 100 Gas Share in Power Capacity Mix 5.0% 90 4.5% 1000 60% 80 4.0% 20 50% 70 3.5% 800 60 3.0% 40% 15 600 50 2.5% 30
Slide 25: Henry Hub Pricing Attractive as Domestic Production Grows
Henry Hub Pricing Attractive as Domestic Production Grows Top Global LNG Suppliers Projected Growth by Basin Through December 2020 MT (YTD through 3Q19) Bcf/d 2 70 60 58 1.4 60 1 0.8 0.7 50 40 0 30 26 22 19 20 16 (0.4) 10 (1) 10 (1.1) 0 (2) Qatar Australia USA Russia Malaysia Nigeria Trinidad Permia
Slide 26: >100 MTPA of Incremental LNG Supply Required by 2030
>100 MTPA of Incremental LNG Supply Required by 2030 Global LNG Supply LNG Projected Demand Growth by Region 2018 to 2030 mtpa Over 230 mtpa of Demand Growth Projected mtpa 600 LNG Trade 60 Forecast 52 NewSupply +100 LK 500 50 mtpa 49 2018 to 2030 BD CAGR: 4.8% 40 40 43 400 PH Supply: Existing and U
Slide 27: Financial Update
CHENIERE ENERGY, INC. FINANCIAL UPDATE
Slide 28: Third Quarter 2019 Results Summary
Third Quarter 2019 Results Summary Results HighlightsThree Primary Financial Priorities for 2019 ($ millions, except per share and LNG data) 3Q 2019 2Q 2019 YTD 2019 YTD 2018 73% of LNG volumes recognized in income in 3Q 2019 Revenues $2,170 $2,292 $6,723 $5,604 from our projects sold under long-ter
Slide 29: 2019 and 2020 Full Year Guidance
2019 and 2020 Full Year Guidance ThreeFull Year Primary 2019 FinancialGuidance Priorities for 2019 Three2020 Outlook Primary Financial Priorities for 2019 ($ billions, except per unit data) Stable operations with seven Trains in service through the entire year Consolidated Adjusted EBITDA $2.9 - $3.
Slide 30: Balance Sheet Management and Capital Allocation Update
Balance Sheet Management and Capital Allocation Update ThreeKey Achievements Primary Financial Priorities for 2019 ThreeProject Primary-Level Debt Financial Maturities Priorities for 2019 CQP issued $1.5B 4.50% Senior Notes due 2029 CCH/CEI To term out CQP term loan balance and for general corporate
Slide 31: Run-Rate Guidance
Run-Rate Guidance 9 Trains (2023) SPL T1-6, ($bn, except per share and per unit amounts or unless otherwise noted) CCL T1-3 CEI Consolidated Adjusted EBITDA $5.2 - $5.6 Less: Distributions to CQP Non-Controlling Interest ($0.9) - ($1.0) Less: CQP Interest Expense / SPL Interest Expense / Other ($1.1
Slide 32: Run-Rate Guidance: Impact of Stage 3 at Corpus Christi
Run-Rate Guidance: Impact of Stage 3 at Corpus 9 Trains 9 Trains 9 Trains +9 CCL Trains Stage + CCL 3 Stage 3 (2023) (2023) (2026) (2026) SPL T1-6, SPL T1-6, SPL T1-6, SPL T1-6, + CCL Stage+ 3CCL(2) Stage 3 (2) ($bn, except ($bn,per share except and per per share unit amountsand per unit or unless a
Slide 33: CEI Financial Priorities
CEI Financial Priorities Reinvest and return capital remain focus ▪ Focused on accretive growth opportunities at Corpus Christi, starting with Stage 3 ▪ Projected returns via share repurchases is benchmark against which capital allocation decisions are measured Long-term sustainable balance sheet pa
Slide 34: Capital Allocation Backdrop
Capital Allocation Backdrop Unprecedented period of investment ($mm) Annual EBITDA ramping Accretive brownfield opportunities remain priority $30 ~$25BN Invested to Date $6,000 ~5 Mtpa $25 $5,000 ~20 Mtpa $20 ~$3BN $4,000 $15 Remaining Investment $3,000 $10 ~35 $2,000 $5 Mtpa Cumulative spend ($bn)
Slide 35: Capital Allocation Priorities
Capital Allocation Priorities 1 Continue to pursue accretive growth projects ▪ “Tie goes to growth” ▪ Fund SPL Train 6 and pursue attractive debottlenecking opportunities ▪ Equity fund 50% of Corpus Christi Stage 3 once commercialized (2020 FID Targeted) 2 De-lever consolidated enterprise ▪ Aim for
Slide 36: Growth Investment Considerations To Reach FID
Growth Investment Considerations To Reach FID ThreeInvestment Primary Framework Financial Principles Priorities for 2019 Unlevered Contracting Deleveraging CEI Economics Economics ✓ Sign creditworthy ✓ Earn attractive ✓ Ensure sufficient ✓ FID projects that contracts to underpin unlevered returns at
Slide 37: Balance Sheet Strategy
Balance Sheet Strategy Target mid-to-high 4X consolidated debt-to-EBITDA to achieve investment grade credit ratings ▪ Focus on simple consolidated credit metrics (Debt / EBITDA) for corporate entities CEI and CQP ▪ Plan to migrate a portion of project level debt to corporate levels to de-lever proje
Slide 38: Balance Sheet Strategy (Cont'd.)
Balance Sheet Strategy (Cont’d.) ThreeDebt Maturity Primary Stacks Financial Priorities for 2019 ($bn) CCH/CEI ($bn) SPL/CQP $10.0 $10.0 CQP - Senior Bullet Notes CEI and CCH Convertible Notes SPL - Senior Bullet Notes $8.0 CCH - Credit Facility $8.0 SPL - Amortizing Notes $6.0 CCH - Senior Bullet N
Slide 39: Capital Return Strategy
Capital Return Strategy $1.0 billion share repurchase program authorized ▪ 3-year program began in late 2Q 2019 ▪ Total of ~2.5 million shares repurchased for $159MM through 3Q 2019 ▪ Flexible to company and tax-efficient to shareholders Actual share repurchase timing and amount dependent on: ▪ Expe
Slide 40: Appendix
ynat=s APPENDIX
Slide 41: Cheniere's Climate and Sustainability Principles
Cheniere’s Climate and Sustainability Principles Aiming to achieve a resilient, sustainable business model is a key part of our foundation Science Operational Excellence We promote and follow peer-reviewed We design and operate our facilities to reduce science to assess our impacts, anchor our envir
Slide 42: Cheniere Debt Summary
Cheniere Debt Summary Cash Balance: ~$2.5B(1) Cheniere CCH Holdco II, LLC Cheniere Energy, Inc. $1.6B Senior Secured Convertible Notes Cheniere Energy, Inc. due 2025 $1.4B PIK Convertible Notes due 2021 (4.875%) (NYSE American: LNG) $0.63B Convertible Notes due 2045 (4.250%) Cheniere Corpus Christi
Slide 43: Reconciliation to Non-GAAP Measures
Reconciliation to Non-GAAP Measures Consolidated Adjusted EBITDA Regulation G Reconciliations This presentation contains non-GAAP financial measures. Consolidated Adjusted EBITDA, Distributable Cash Flow, Distributable Cash Flow per Share, and The following table reconciles our Consolidated Adjusted
Slide 44: Investor Relations Contacts
CHENIERE ENERGY, INC. INVESTOR RELATIONS CONTACTS Randy Bhatia Vice President, Investor Relations – (713) 375-5479, randy.bhatia@cheniere.com Megan Light Director, Investor Relations – (713) 375-5492, megan.light@cheniere.com
Cheniere Energy — Investor Presentation (December 2019) on 6ix