Cheniere Energy, Inc. · NYSE:LNG
Cheniere Energy — Investor Presentation (October 2005)
28 slides from Cheniere Energy's investor presentation, October 2005
Slide 1: Cheniere Energy, Inc. Corporate Presentation October 2005
CHENIERE ENERGY, INC. *Freeport LNG L.P. *Corpus Christi LNG L.P. *Sabine Pass LNG L.P. *Creole Trail LNG L.P. (Cheniere 30% Limited Partner) (Cheniere 100%) (Cheniere 100%) (Cheniere 100%) Corporate Presentation October 2005 *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: Production vs Consumption (Tcf)
Production vs Consumption (Tcf) 30 Historical Forecast 25 8 Tcf or 20 22 Bcf/d 15 10 5 0 85 88 91 94 97 00 03 06 09 15 18 21 24 12 19 19 19 19 19 20 20 20 20 20 20 20 20 Domestic Production 20 Consumption Cheniere estimate based on 2% annual average decline in production, 1% annual average growth in
Slide 4: Domestic Production
Domestic Production Bcf/d US Lower 48 Dry Gas Production Forecast Bcm/d 53 1.48 51 Estimate ------------------------------------------------- > 1.42 49 1.37 47 1.31 45 $5.00 @ 2010 1.26 43 40 Bcf/d 1.20 41 1.14 39 1.09 $6/Mcf (89% Rig Utilization) 37 1.03 $5/Mcf (83% Rig Utilization) 35 $4/Mcf (77%
Slide 5: New Supply Must Come from New Areas
New Supply Must Come from New Areas… ““What What we we need need to to do do is is get get Arctic Gas in in place, place, as as soon soon as as wewe can, can, the the capability capability of of fairly fairly “Our “Our limited limited capacity capacity to to substantial substantial imports imports t
Slide 6: What Is Liquefied Natural Gas (LNG)?
What Is Liquefied Natural Gas (LNG)? LNG is natural gas that has been super-cooled to -260°F and changed from gas to liquid Liquefaction reduces volume by 600-to-1 Stored cold in insulated containers at near atmospheric pressure Safe to store and transport LNG is colorless, odorless, non-c
Slide 7: Projected Liquefaction Capacity 2010
Projected Liquefaction Capacity 2010 Existing Liquefaction Under Construction, Committed, or Proposed Liquefaction ME ME Gulf Gulf Asia Asia Pacific Pacific Atlantic Atlantic Basin Basin 12.5 12.5 Bcf/d Bcf/d 14.2 14.2 Bcf/d Bcf/d 14.5 14.5 Bcf/d Bcf/d 2004 2004 Consumption Consumption 2004 2004 Con
Slide 8: LNG Value Chain
LNG Value Chain Supply Liquefaction Shipping Regasification Total CAPEX (Estimated for 1 Bcf/d) $1.5 B $2.0 B $1.0 – 2.0 B $0.5 B $5.0 – 6.0 B Per Unit Cost ($/Mcf) South America $0.50 – 0.75 $0.80 $0.40 $0.30 – 0.50 $2.00 – 2.45 Africa $0.25 – 0.75 $0.80 – 1.00 $0.90 – 1.00 $0.30 – 0.50 $2.25 – 3.2
Slide 9: Current and Future LNG Fleet
Current and Future LNG Fleet 122 vessels for delivery 2005-2009 – World fleet 304 by 2009 Committed Shipping Investment greater than $23 Billion through 2009 Increasing number of ships uncommitted to a trade Membrane Containment Moss Spheres World Fleet 1995 90 2001 128 Source: LNG Shipping Solution
Slide 10: Status of Industry
Status of Industry In the next three years: Liquefaction growth of 13.4 Bcf/d, representing 78% increase over next 3 years Shipping growth of 105 vessels, representing 61% increase over next 3 years The supply-demand gap in the U.S. continues to make this market the prime target for LNG produc
Slide 11: U.S. LNG Import Facilities
U.S. LNG Import Facilities Baseload Existing Terminals Owner Sendout Expansion Status Total (MMcf/d) (MMcfd) (MMcfd) Everett Tractebel - DOMAC 700 Complete Operational 700 Cove Point Dominion - Cove Point LNG 750 Operatonal 750 CP - Expansion Dominion - Cove Point LNG 1,050 Permit required 1,050 Eve
Slide 12: Terminal Siting Best Practices
Terminal Siting Best Practices 9 Deepwater port access and compatibility with shipping traffic; 9 Safety, especially suitability of acreage for safety exclusion zones; 9 Pipeline takeaway capacity; 9 Acceptance by local communities; 9 Coordination of federal and state agencies; 12
Slide 13: Proposed LNG Facilities
Proposed LNG Facilities Onshore Sites Offshore Sites Source: Federal Energy Regulatory Commission 13
Slide 14: Actual Applications
Actual Applications 2 Onshore facilities under construction – 4.1 Bcf/d 6 Onshore applications approved by FERC – 9.7 Bcf/d 5 Onshore applications filed w/ FERC – 6.2 Bcf/d Onshore Under Construction Freeport LNG (TX) Sabine Pass – (LA) FERC Approved Cameron LNG (LA) Corpus Christi – (TX) Ingleside
Slide 15: Coastal States Gas Consumption
Coastal States Gas Consumption 2003 0.7 0.2 0.7 3.1 3.1 1.2 1.9 1.7 0.7 6.1 0.6 0.4 0.7 1.0 1.0 In Bcf/d 3.4 3.4 11.2 Top 5 Coastal Consumers 1.9 1.9 TX, CA, LA, NY, FLA Source: EIA, NG Monthly, April 2005 15
Slide 16: U.S. Gas Pipeline System
U.S. Gas Pipeline System Gulf Coast-centered transmission system reaches all US markets 16
Slide 17: North America Regasification Capacity
North America Regasification Capacity 2010 1.5 Bcf/d 0.7 Bcf/d 1.5 Bcf/d 0.8 Bcf/d 1.0 Bcf/d Existing Facilities New Terminals 10 - 12 Bcf/d 17 Cheniere Estimate
Slide 18: Cheniere LNG Receipt Network
Cheniere LNG Receipt Network • 4 Deepwater Ports • 7 Unloading Docks Sabine Pass • 12-14 Storage Tanks 2.6 – 4.0 Bcf/d (40 Bcf equivalent) Creole Trail • 10-11.4 Bcf/d Regas Freeport (30%) 3.3 Bcf/d 1.5 Bcf/d Capacity Under Construction Under Construction Corpus Christi 2.6 Bcf/d 18
Slide 19: Target Market Access – 29 Bcf/d
Target Market Access – 29 Bcf/d 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 Gulf Gulf Coast Coast Markets Markets Markets Markets 4.6 4.6 Bcf/d Bcf/d 4.9 4.9 Bcf/d Bcf/d Mexican Mexican Markets Cheniere Cheniere LN
Slide 20: Key Development Factors
Key Development Factors US Gulf Coast: access to local and national markets, existing pipeline infrastructure and optionality Low cost regas provider: – Large sites: able to build within existing U.S. safety code – Large terminals: economies of scale and room for expansion – Proximity to large t
Slide 21: Sabine - Under Construction
Sabine - Under Construction 21
Slide 22: Freeport Construction
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Slide 23: Project Overviews
Project Overviews Freeport Sabine Pass Corpus Christi Creole Trail Capex ($MM)1 $750 - $800 $750 – $850 $650 – $750 $850 – $950 Initial Capacity 1.5 Bcf/d 2.6 Bcf/d 2.6 Bcf/d 3.3 Bcf/d Storage Capacity 6.7 Bcfe 10.1 Bcfe 10.1 Bcfe 13.5 Bcfe Berths 1 dock 2 docks 2 docks 2 docks Tanks 2 tanks 3 tanks
Slide 24: Business Structure
Business Structure Other Businesses • J&S Cheniere • E&P $2.2 billion equity market cap1 Freeport LNG Sabine Pass LNG Corpus Christi LNG Creole Trail LNG 30% 100% 100% 100% Phase I Capacity Phase I capacity Marketing capacity Marketing capacity sold out sold out2 Evaluating financing Eva
Slide 25: Financing Completed and Pro Forma Capitalization
Financing Completed and Pro Forma Capitalization Financings 1/04 $ 15 million 2.2 million shares @ $6.75 per share 12/04 $300 million 10 million shares @ $30.00 per share 2/05 $822 million Project financing @ 6% to 6.6% on $700 million LIBOR + 1.25% to 1.65% on $122 million 7/05 $325 million Senior
Slide 26: Terminal Use Agreements (TUAs)
Terminal Use Agreements (TUAs) Sabine TUA monthly payment amounts of $0.32/MMbtu plus retain 2% of the LNG delivered for use as fuel at the facility 20 years or longer Take-or-pay contract terms Investment grade tenants Estimate TUA Annual Revenue TUA TUA Capacity Fee Calculated Revenue Stat
Slide 27: Current Marketing Efforts
Current Marketing Efforts Sabine Pass Negotiation and Expansion Chevron: 300 MMcf/d @ $0.32 / MMbtu Existing Customers: 1 Bcf/d @ $0.24 / MMbtu Potential Revenues $129 million Sabine Pass Indexed Gas Purchase – Example 1 Bcf/d Gulf Coast delivery at 83% of Henry Hub price Potential Revenues 17% of $
Slide 28: Long-Term Model
Long-Term Model $MM Freeport 15 Contracted TUAs 215 Optioned & Subject to Negotiation 129 TUAs Under Marketing Efforts 250 $609 Potential Indexed Gas Purchases - 1 Bcf/d $260 Total Potential Revenues $869 Excess Capacity for Cheniere Future Business Development (Bcf/d) 3.9 NOTE: These revenue object
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