Cheniere Energy, Inc. · NYSE:LNG
Cheniere Energy — Investor Presentation (January 2004)
20 slides from Cheniere Energy's investor presentation, Jan 7, 2004
Slide 1: Forward Looking Statements
forward looking statements that no assurances that the company’s financial goals will be realized. Numerous uncertainties cause results to differ materially from those expressed in forward-looking statements made by Cheniere Energy, Inc. January 2004 belief, as well as assumptions made by, and infor
Slide 2: Market Data
2 181,000 Market Data American Stock Exchange: Ticker LNG Common shares outstanding: 16.6 million Market capitalization: $194 million* Daily trading volume (30-day): • • • • * Closing market price on December 31, 2003, was $11.70.
Slide 3: Organization
3 Organization 30% of Freeport LNG 66.66% of Corpus Christi 100% of Sabine Pass, Brownsville 9.3% Interest in Gryphon Exploration Company Cheniere Exploration Group Cheniere LNG, Inc. • • • E & P: – – LNG: – • •
Slide 4: Gryphon Exploration Overview
4 20,000 sq. miles + 10 Exploratory Wells 2 Development Wells 26 million cubic feet $ 175 million 48 Bcfe 250,000 Overview (1) (2) Gryphon - NPV-10 of Proved and Probable Reserves Proved and Probable Reserves 3D Seismic Data Set Net Leased Acreage Prospects Drilled 2003 Average Daily Production in S
Slide 5: Cheniere Exploration Group
5 Cheniere Exploration Group 7,000 sq. miles $1.4 million * $5.0 million * 9 exploratory wells, 1 development 8 successful wells 3D Seismic Data Proved Reserves NPV-10 of Proved Reserves 2003 Drilling Results *Estimated at Year-end 2003.
Slide 6: Cheniere LNG
A wholly owned subsidiary of Cheniere Energy, Inc. Cheniere LNG
Slide 7: Alan Greenspan quote on LNG import capacity
7 This nation’s] limited capacity to import liquified natural gas effectively restricts our access to the world’s abundant supplies of natural gas.” Alan Greenspan Federal Reserve Chairman May 21, 2003 Testimony before the Joint Economic Committee on the state of the US economy and future economic p
Slide 8: What is LNG?
• 8 • (-259°F) liquefies needed it when LNG? until transport times and is cooled vaporized 600 at vaporized is store when What stored pressure to and which reduced odorless safe air gas is and heated than non-toxic and be Natural Volume Colorless, and Shipped atmospheric Easy Can Lighter • • • • • •
Slide 9: US LNG market growth
• 9 • Mcf. U.S. per the new $3.50 in eight • – LNG to $2.50 countries for six 24 fast of in market range growing the a reserves necessitating in decade day, U.S. gas shipping next per the and Market in stranded the Bcf in 15 landed of capacity that to LNG Tcf 12 be 5,000 to can estimate grow LNG Ove
Slide 10: Existing US import facilities
10 Tractebel 500 MMcf/d Dominion 750 MMcf/d Everett—El Paso Cove Pt.—400 MMcf/d Elba Isl. – CMS 750 MMcf/d Trunkline -Cheniere Existing U.S. Import Facilities Texas - Legend Existing Capacities Proposed By Cheniere
Slide 11: Terminal Siting Best Practices
11 May 2003 Terminal Siting Best Practices* FERC Staff member Richard Foley, April 9, 2003 Commission LNG Express deepwater port access and compatibility with shipping traffic; safety, especially suitability of acreage for safety takeaway capacity in proximity to natural gas pipelines; acceptance by
Slide 12: Coastal States Gas Consumption
12 0.2 1.0 In Bcf/d 3.2 0.6 0.5 1.7 0.3 1.5 0.06 0.4 0.2 0.5 1.0 NH – CT – RI – MD –0.9 0.9 3.6 Coastal States Gas Consumption Most coastal states are niche markets 2001 2 Bcf/d into a niche market is problematic 11.5 TX, CA, LA, NY, FLA Source: EIA, NGA 2001 0.8 6.7 Top 5 Coastal Consumers 0.6
Slide 13: Extensive Pipeline Infrastructure
13 pipeline network bringing gas Existing Gas Storage New Gas Fired Generation PG&E Pipeline HPL Pipeline Texas Eastern Florida Gas Transco Trunkline Tennessee Midcon Egsi Extensive Pipeline Infrastructure The U.S. has an extensive from Texas and Louisiana to the Northeast. Texas has both extensive
Slide 14: Cheniere LNG terminal structure
• 14 • LNG study • 100% • Brownsville under sendout 100% docks Bcf/d • 2.6 • ü ü • LNG In-service • Pass • 40’channel tanks 07 • 1Q • Structure LNG Sabine ü ü • Cheniere sendout • Equity docks Bcf/d • 66.7% 2 2.6 • ü ü • LNG In-service Christi 45’channel tanks 07 • 1Q • Corpus ü ü • LNG sendout In-s
Slide 15: Pipeline Markets and network capacity
• 15 • Pipeline Markets • Network Sendout Capacity Flexibility Cost Interstate Local Optionality Reliability Liquidity Low Bcf/d Bcf/d Takeaway Bcf/d • Receipt 6.7 14 15 • • • LNG Pass Ports Sabine • Cheniere Tanks equivalent) Freeport Christi Deepwater Storage Bcf Corpus Brownsville • 8 (27 • • • D
Slide 16: Business Model
16 $450 MM 30 MM $ / MMbtu 35¢ Business Model Tenants pay fee per MMBTU for combined terminaling & vaporization services. Sufficient to justify construction Fixed Variable fee structure Operating Costs: Capacity Rates Terminals Operated as Tolling Facility – Long-Term Terminal Use Agreement – – Addi
Slide 17: Freeport LNG
17 ConocoPhillips, Dow None Provided by Conoco Application Submitted March 2003 Expected 1Q 2004 2007 30 Percent Limited Partner Freeport LNG Cheniere Participation: Major Users: Capacity Available: Financing: Permits: In Service Date: • • • • • •
Slide 18: Milestones
18 Milestones FEED completed November Application filed December 22, 2003 with FERC Capacity marketing, January 2004 Anticipated construction start, 2004 (Bechtel) Planned in-service, 2007 Corpus Christi, Sabine Pass – – – – –•
Slide 19: Strategic Position
19 Strategic Position minimum downtime flexible access Major stakes in three Gulf Coast LNG receiving terminals Gateways for 6.5 Bcf/d of gas to US markets Access to regasification capacity at three Gulf Coast locations ensures • • Lowest cost per Mcf of any receiving facilities By Decade’s End – –
Slide 20: Summary
20 Summary Dwayne Stone, Pres. Black & Veatch US needs access to the world’s abundant supplies of natural gas The US Gulf Coast is the best entry point for significant quantities of LNG Cheniere LNG sites are “exceptional” – Freeport capacity off the market Combined, the Cheniere LNG receipt network
Cheniere Energy — Investor Presentation (January 2004) on 6ix