Cheniere Energy, Inc. · NYSE:LNG
Cheniere Energy — Investor Presentation (May 2006)
23 slides from Cheniere Energy's investor presentation, May 2006
Slide 1: Cheniere Energy, Inc. Corporate Presentation May 2006
CHENIERE ENERGY, INC. *Sabine Pass LNG L.P. *Corpus Christi LNG L.P. *Creole Trail LNG L.P. *Freeport LNG L.P. Cheniere 100% Cheniere 100% Cheniere 100% Cheniere 30% Limited Partner Corporate Presentation May 2006 *Artist’s Rendition
Slide 2: Safe Harbor Act
Safe Harbor Act 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 and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements, other than sta
Slide 3: New Supply Must Come from New Areas…
New Supply Must Come from New Areas… Arctic Gas “We've “We've got got to to make make sure sure that that we we have have enough enough natural natural gas gas to to meet meet our our home home heating heating andand industrial industrial needs. needs. And And one one ofof “Our “Our limited limited
Slide 4: Cheniere LNG Receipt Network
Cheniere LNG Receipt Network Creole Trail 3.3 Bcf/d • 3 Deep water channels Midwest Northeast • 6 Unloading Docks & Canada • 13 Storage Tanks (43 Bcf equivalent) • 9.9 Bcf/d Regas Sabine Pass 4.0 Bcf/d Capacity Southeast • 274 Miles of pipeline • 42 - 48” diameter Gulf Coast • 20 Bcf/d interconnect
Slide 5: Timing of Operations
Timing of Operations 2008 2009 2010 2011 Freeport 1.5 1.5 1.5 1.5 Sabine Pass 2.6 4.0 4.0 4.0 Corpus Christi -- -- 2.6 2.6 Creole Trail -- -- -- 3.3 Total Bcf/d 4.1 5.5 8.1 11.4 Certain Key Considerations • Regulatory – no delays in schedules currently anticipated • Commercial – Cheniere’s ability t
Slide 6: Projected Liquefaction Capacity 2010
Projected Liquefaction Capacity 2010 Existing Liquefaction Under Construction or Proposed Liquefaction 2010 Liquefaction Capacity Atlantic 2004 LNG Imports Atlantic Basin Basin 14.5 14.5 Bcf/d Bcf/d 2004 2004 N. N. America America 2004 2004 Europe Europe 2.0 2.0 Bcf/d Bcf/d 4.0 Bcf/d 4.0 Bcf/d ME ME
Slide 7: Liquefaction Growth
Liquefaction Growth Global liquefaction capacity in 2004 was 19 Bcf/d Liquefaction in 2010 is estimated to be 41 Bcf/d Growth in liquefaction is 22 Bcf/d Where will it go? 7
Slide 8: Asia Pacific LNG demand growth
Asia Pacific* ~7 Bcf/d needed for demand growth by 2010 Regional Regional Demand Demand by by Country Country (2004) (2004) Consumption Pipeline Import 2004 = 20 Bcf/d Capacity 2010 = 27 Bcf/d Eventually Large LNG Import Capacity Incremental Korea Korea 2004 = 32 Bcf/d LNG Need 33 Japan Japan 2010 =
Slide 9: Europe LNG demand growth
Europe* ~12 Bcf/d needed for demand growth for 2010 Consumption Pipeline Import Capacity Regional Regional Demand Demand by by Country Country (2004) (2004) 2004 = 45 Bcf/d 2004 = 26 Bcf/d 2010 = 57 Bcf/d 2010 = 32 Bcf/d LNG Import Capacity Incremental 2004 = 6 Bcf/d LNG Need 2010 = 10 Bcf/d 2010 =
Slide 10: World LNG Supply-Demand 2010
World LNG Supply-Demand 2010 Existing Liquefaction Under Construction or Proposed Liquefaction 2010 Liquefaction Capacity 2010 Consumption Atlantic Atlantic Basin Basin 14.5 Bcf/d 14.5 Bcf/d 2010 2010 Europe Europe Asia Asia Pacific Pacific 66 -- 88 Bcf/d Bcf/d ME ME Gulf Gulf 14.2 14.2 Bcf/d Bcf/d
Slide 11: Demand Seasonality
Demand Seasonality • Competitive winter markets • Complementary summer markets 35 30 25 Bcf/d 20 15 10 5 0 3 3 03 03 03 3 3 03 03 3 3 3 l-0 -0 -0 r-0 -0 -0 -0 n- n- b- g- p- ov ar Ju ec ct ay Ap Ja Ju Fe Au Se M O N D M Belgium, France & UK Gulf Coast (Bcf/d) 11 Source: IEA
Slide 12: North American Receiving Capacity
North American Receiving Capacity Can North America receive 16 to 19 Bcf/d? - Gas consumption constraint - Regasification 12
Slide 13: Production and Imports vs. Consumption
Production and Imports vs. Consumption Replacement production + growth = 21 Bcf/d (at $6.00 per MMBtu) 80 70 9 Bcf/d Bcf/d 60 LNG Canadian Imports 12 Bcf/d 50 Lower-48 Production 40 00 01 02 03 04 05 06 07 08 09 10 20 20 20 20 20 20 20 20 20 20 20 Source: Lower-48, IHS 2005; Canadian imports & consu
Slide 14: North America Gas Demand & LNG Import Facilities
North America Gas Demand & LNG Import Facilities LNG LNG Import Import Capacity Capacity -- 2010 2010 Bcf/d Bcf/d Bcf/d Bcf/d Demand Demand by by Country Country and and Region Region (2004) (2004) Existing Existing Facilities Facilities 3.4 3.4 Expansion Expansion of of existing existing 1.4 1.4 Ne
Slide 15: Observations
Observations Capacity utilization probably under 75% U.S. will not receive sufficient gas at $6.00/MMBtu so prices will remain higher on average European seasonality will increase volatility and reduce utilization rates NYMEX will increasingly be a benchmark price globally 15
Slide 16: Cheniere's LNG Receiving Portfolio
Cheniere’s LNG Receiving Portfolio In this context, what is the optimal business model for Cheniere’s capacity? 16
Slide 17: Three Major Business Groups
Three Major Business Groups Cheniere Terminal Group – Asset and cash flow foundation – Non-regulated fee based Cheniere Pipeline Group – Downstream liquidity and optionality – Regulated fee based Cheniere LNG Marketing – Commercialization vehicle for retained capacity – Transaction based 17
Slide 18: Cheniere Terminal Group
Cheniere Terminal Group Freeport LNG L.P. – 30 % Capacity Revenue to Cheniere Sold – Terminal Use Agreement (TUA) Conoco 1.0 Bcf/d $15 Dow 0.5 Bcf/d Revenue to Cheniere @ Cheniere Energy – 100% Capacity $0.32 MMBtu ($MM) Sold – Terminal Use Agreement Total, S.A. 1.0 Bcf/d $125 Chevron 1.0 Bcf/d $125
Slide 19: Cheniere Pipeline Group
Cheniere Pipeline Group Purpose: to service terminals and connect to grid Capacity: approximately 155 miles of pipelines from Sabine Pass, Creole Trail, and Corpus Christi (20 Bcf/d of interconnected capacity) CapEx: $800 million to $1 billion over 5 years Rates: regulated – estimate $120 -
Slide 20: Cheniere LNG Marketing
Cheniere LNG Marketing Overall function: – Connects North American demand and global supply – Provides producers LNG monetization service – Provides consumers global natural gas procurement service Developing portfolio of LNG HH Indexed Purchase Agreements and Natural Gas Sale Agreements Cheni
Slide 21: Commercial Opportunity
Commercial Opportunity Cheniere Terminal Group – Approximately $2 billion of CapEx – Annual revenue potential $800 million – $1 billion – No commodity price exposure Cheniere Pipeline Group – Approximately $1 billion of CapEx – Annual revenue potential $120 - $150 million – Crucial to balance of
Slide 22: Target Market Access
Target Market Access Northeast Northeast Midwest Midwest Markets Markets Markets Markets 5.7 5.7 Bcf/d Bcf/d 11.8 11.8 Bcf/d Bcf/d Southeast Southeast Markets Markets 4.6 4.6 Bcf/d Bcf/d Gulf Gulf Coast Coast Markets Markets 4.9 4.9 Bcf/d Bcf/d Mexican Mexican Markets Markets 1.7 Cheniere Cheniere L
Slide 23: North America's Premier LNG Receiving Company
North America’s Premier LNG Receiving Company