Cheniere Energy Partners, Lp · NYSE:CQP
Cheniere Energy Partners, Lp — UBS 2010 MLP One-on-One Conference
32 slides from Cheniere Energy Partners, Lp's conference presentation, Sep 1, 2010
Slide 1: UBS 2010 MLP One-on-One Conference
Cheniere Energy Partners, L.P. UBS 2010 MLP One-on-One Conference
Slide 2: Forward Looking 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 and Section 21E of the Securities Exchange Act of 1933, as amended. All statements, other than statements of
Slide 3: Cheniere Overview
Cheniere Overview Cheniere Energy Cheniere Energy, Inc. NYSE Amex US: LNG Partners, L.P. NYSE Amex US: CQP 88.6% (LP interest) 2.0% (GP interest) Cheniere LNG Holdings, LLC Sabine Pass LNG, § 90.6% Ownership of CQP L.P. (SPLNG) § 4 Bcf/d Regasification Terminal, Fully Contracted Cheniere Marketing §
Slide 4: Sabine Pass LNG
Sabine Pass LNG Cheniere Energy Partners, L.P. 100% Aerial view of Sabine Pass LNG Terminal § Vaporization – ~4.3 Bcf/d peak send-out § Storage – 5 tanks x 160,000 cm (16.9 Bcfe) § Berthing / Unloading – Two docks – LNG carriers up to 266,000 cm – Four dedicated tugs § Land – 853 acres in Cameron Pa
Slide 5: Creole Trail Pipeline
Creole Trail Pipeline Cheniere Energy, Inc. 100% § Provides optimal market access for LNG from the Sabine Pass terminal § First 94 miles complete and in-service, additional 58 miles permitted §Size: – 2.0 Bcf/d §Diameter: – 42-inch diameter §Cost: – ~$560 million first 94 miles §Initial interconnect
Slide 6: Contracted Capacity - TUAs
Contracted Capacity - TUAs Summary of 20-year Terminal Use Agreements (4) Total Gas & Power N.A. Chevron USA Cheniere Energy Investments Capacity 1.0 Bcf/d 1.0 Bcf/d 2.0 Bcf/d Fees (1) Reservation Fee (2) $0.28/MMBTU $0.28/MMBTU $0.28/MMBTU Opex Fee (3) $0.04/MMBTU $0.04/MMBTU $0.04/MMBTU 2010 Full-
Slide 7: Organizational Structure
Organizational Structure TUA Assignment and new VCRA NYSE Amex US: LNG 100% Ownership Interest Cheniere Cheniere LNG Marketing, LLC Holdings, LLC 88.6% LP Interest 100% of 2% GP Interest NYSE Amex US: CQP VCRA Public Unit holders 100% Ownership Interest Cheniere Energy Investments, LLC TUA 100% Owne
Slide 8: Cheniere and CQP Restructure Marketing Arrangement
Cheniere and CQP Restructure Marketing Arrangement* Transaction Summary § CMI assigned its 2.0 Bcf/d TUA with Sabine Pass LNG to direct subsidiary of CQP, Cheniere Energy Investments, LLC (“Investments”) § Investments makes TUA payments to Sabine Pass LNG effective 7/1/2010 § CMI / Investments enter
Slide 9: Liquefaction Project
CHENIERE Liquefaction Project
Slide 10: Expanding Operations - Liquefaction Project
Expanding Operations - Liquefaction Project* Compelling Proposition Sabine Pass to become bi-directional import/export facility § Market fundamentals create opportunity to expand into exports § Export services provide customers with an attractively priced option to access U.S. natural gas supply § S
Slide 11: Market Fundamentals Drive Liquefaction Project
Market Fundamentals Drive Liquefaction Project § The U.S. has become the largest producer of natural gas in the world and production costs rank among the lowest – Productive capacity at $6.50/MMBtu could reach 95 Bcf/d by 2020 § U.S. natural gas demand not likely to keep pace with incremental supply
Slide 12: U.S. Unconventional Reserves
U.S. Unconventional Reserves Basins Proximate to Premium Markets and Major Pipelines 1,167 Tcf 366 Tcf US Proved Reserves Sources: EIA (US map graphic, pipelines and LNG terminals placed by Cheniere) Advanced Resources Intl (Lower 48 Unconventional Recoverable Reserves), ARI shale estimates updated
Slide 13: Sabine Pass LNG Proposed Liquefaction Project - Overview
Sabine Pass LNG Proposed Liquefaction Project - Overview § Leveraging existing assets – Large acreage position (853 acres) • Can readily accommodate 4 liquefaction trains (up to 2 Bcf/d capacity) – Existing infrastructure • 2 docks, 4 dedicated tugs • LNG storage tanks (5 x 160,000 cm) • Power gener
Slide 14: Low Cost Liquefaction Facilities
Low Cost Liquefaction Facilities Proven Technology ConocoPhillips-Bechtel - Global Liquefaction Collaboration Cost 450 400 350 300 250 200 150 100 50 0 Qatargas Nigeria RasGas ELNGT1 Oman ALNGT1 ALNGT1-3 ELNGT1-2 $/Ton per Annum ConocoPhillips-Bechtel trains Source: ConocoPhillips-Bechtel
Slide 15: Commercial Structure
Commercial Structure Estimated Terms for LNG Sales Agreements Capacity fee includes regasification and liquefaction services - provides customer option to import or export Estimated cost to purchase U.S. supply: Ê Capacity Fee: $1.40/MMBtu to $1.75/MMBtu § “Take or Pay”, permits lifting or unloading
Slide 16: Delivered Costs Compare Favorably to European Price Estimates
Delivered Costs Compare Favorably to European Price Estimates § Assuming continued increase in U.S. natural gas production, unconventional gas economics effectively cap Henry Hub at mid-range of $6.50/MMBtu § If oil remains above $65/Bbl, Sabine Pass LNG is cheaper than oil- indexed pipeline gas in
Slide 17: Regulatory Process
Regulatory Process Strong support from local and state agencies § Dual regulatory tracks with the DOE and FERC – DOE regulates imports and exports of natural gas – FERC coordinates federal and state review of proposals to build LNG terminals § Key regulatory and legislative issues – NEPA empowers FE
Slide 18: Financial
CHENIERE Financial
Slide 19: Estimated Future Cash Flows
Estimated Future Cash Flows Cheniere Energy Partners ($ in MM) Annualized* Receipts § TUA Customers $251 § Fuel Retainage, Tugs, Other 7 Disbursements § Operating Expenses $34 § Management Fees 8 § Debt Service 165 Distributable Cash Available $51 Distributions to GP and LP Unitholders $46 Note: Not
Slide 20: Cheniere Energy, Inc.
CHENIERE Cheniere Energy, Inc.
Slide 21: 2010 Financial Developments
2010 Financial Developments Cheniere Energy, Inc. § Entered into marketing arrangement with JPMorgan – Reduced working capital requirements for cargo purchases/sales § Sold 30% equity in Freeport to pay down debt – Paid down $102 million of 9.75% term loan § Assigned CMI TUA to CQP subsidiary and en
Slide 22: JPMorgan Arrangement
JPMorgan Arrangement § Cheniere and JPMorgan joined LNG marketing efforts § CMI provides all services related to: – Sourcing deals and negotiating contracts, purchasing, transporting, receiving, storing, regasifying and selling cargoes of LNG and regasified LNG on an exclusive basis § JPM provides c
Slide 23: Estimated Future Cash Flows
Estimated Future Cash Flows Cheniere Energy, Inc. ($ in MM) Annualized* Receipts § Distributions from CQP (Common/GP) $20 § Management fees from CQP 8-19** Disbursements § G&A, net marketing 25-35 § Pipeline & tug services 10 § Other, incl adv tax payments 3-5 § Debt service 34 Net cash outflow $45
Slide 24: LNG Market Update
CHENIERE LNG Market Update
Slide 25: LNG Production
LNG Production An additional 5.5 Bcf/d was produced over 2009, a 24% increase YoY in first half of 2010 MT 25.0 2008 20.0 2010 2009 15.0 10.0 5.0 - Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: Poten, Waterborne for 2010 data
Slide 26: Historical Gas and LNG Demand by Region
Historical Gas and LNG Demand by Region (Bcf/d) 2007 2008 2009 2010 Source: Waterborne LNG, EIA
Slide 27: Firm Liquefaction Capacity Additions
Firm Liquefaction Capacity Additions Liquefaction Capacity Additions by Region Bcf/d 3.0 Middle East Gulf Asia Pacific 2.5 Atlantic Basin 2.0 1.5 1.0 0.5 - Source: Cheniere Research
Slide 28: Appendix
CHENIERE Appendix
Slide 29: North America Onshore Regasification Capacity
North America Onshore Regasification Capacity 17.1 Bcf/d North American Atlantic Basin Terminal Capacity Holder Baseload Sendout (MMcf/d) capacity @ 65% utilization = 11.1 Bcf/d Canaport Repsol 1,000 Canaport Everett Suez 700 Cove Point BP, Statoil, Shell 1,800 Elba Island Everett BG, Marathon, Shel
Slide 30: Organizational Structure
Organizational Structure NYSE Amex US: LNG $205 mm 2.25% Convertible Senior Unsecured Notes due 2012 100% Ownership Interest $298 mm 9.75% Term Loan due 2012 Cheniere LNG Holdings, LLC $247 mm 12.0% Convertible Senior Secured Loans due 2018 88.6% LP Interest 100% of 2% GP Interest NYSE Amex US: CQP
Slide 31: Contacts
CHENIERE ENERGY Cheniere Energy Contacts Katie Pipkin, Vice President Finance & Investor Relations (713) 375-5110 - katie.pipkin@cheniere.com Christina Burke, Manager Investor Relations (713) 375-5104 - christina.burke@cheniere.com
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