Cheniere Energy, Inc. · NYSE:LNG
Cheniere Energy — Bank of America Energy Conference November 2008
23 slides from Cheniere Energy's conference presentation, Nov 13, 2008
Slide 1: Bank of America Energy Conference November 2008
Bank of America Energy Conference November 2008 CHENIERE
Slide 2: Forward-looking statements
2 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 statements of his
Slide 3: Cheniere Energy Business Segments
3 Cheniere Energy Marketing Pipelines Terminals Sabine Pass LNG (SPLNG) (90.6%) Freeport LNG (30%) Approved Permits: Creole Trail LNG Corpus Christi LNG Creole Trail P/L (100%) Approved Permits: Creole Trail P/L Phase II Corpus Christi P/L Development Projects: Southern Trail P/L Frontera 2.0 Bcf/d
Slide 4: Recent Developments
4 Recent Developments Exited our domestic gas business and two LNG vessel time charter party agreements in April 2008 Our international LNG marketing effort remains in place Entered into our first LNG Throughput Agreement with JP Morgan Secured $395 million in new financing Cheniere has sufficient l
Slide 5: Freeport LNG Development, L.P.
5 Freeport LNG Development, L.P. Cheniere Energy, Inc. 30% Freeport LNG Terminal Site August 2008 *Cash distributions expected beginning in 2009. Sold – Terminal Use Agreement (TUA) Capacity Estimated Annual Distribution to Cheniere* ($MM) Conoco 0.90 Bcf/d Dow 0.50 Bcf/d ~ $15 Mitsubishi 0.15 Bcf/d
Slide 6: Sabine Pass LNG – Best in Class Asset
6 Vaporization ~4.3 Bcf/d peak send-out Storage 5 tanks x 160,000 cm (16.8 Bcfe) Berthing / Unloading Two docks LNG carriers up to 266,000 cm Four dedicated tugs LNG Export Permits Pending Land 853 acres in Cameron Parish, LA Accessibility – Deep Water Ship Channel Sabine River Channel dredged to 40
Slide 7: Creole Trail Pipeline
7 Size: 2.0 Bcf/d Diameter: 42-inch diameter Capex: ~$560 million first 94 miles Initial interconnects: 4.1 Bcf/d of interconnect capacity 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, add
Slide 8: Estimated Future Cash Flows
8 Estimated Future Cash Flows Receipts Freeport $10-20 Distributions from CQP 255 Management fees 19 Annualized* ($ in MM) Disbursements CMI TUA @ Sabine Pass $252 G&A 30-40 Pipeline & tug services 10-20 Other, incl adv tax payments 3-5 Debt service 46 Net cash outflow $50 - 70 Estimates represent a
Slide 9: Historical Gas and LNG Demand by Region
9 Historical Gas and LNG Demand by Region Source: Waterborne LNG, EIA 2005 2006 2007 2008 OECD Piped Imports from Norway, Netherlands, Algeria, Russia Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 0 10 20 30 40 European LNG Imports 0 2 4 6 8 10 North America LNG Imports 0 1 2 3 4 5 6 Asian LNG Imp
Slide 10: LNG Liquefaction and Consumption by Region
10 LNG Liquefaction and Consumption by Region Source: GIIGNL, WoodMac, Cheniere Research Atlantic Basin ~11 Bcf/d ME Gulf 13 Bcf/d Asia Pacific 13 Bcf/d 2007 Europe 5.3 Bcf/d 2007 15 Bcf/d 2007 NA 2.5 Bcf/d 5 15 25 35 45 37 23 24 26 29 35 Bcf/d Liquefaction Capacity Firm 2010 Liquefaction Capacity 2
Slide 11: World Liquefaction Capacity
11 World Liquefaction Capacity ~+10 Bcf/d of incremental capacity projected by end of 2010 Source: Cheniere Energy Research, +10 Bcf/d includes capacity coming on line in Q408 YE08 ~29 Bcf/d capacity AB AP MEG 08Q3 08Q4 09Q1 09Q2 09Q3 09Q4 10Q1 10Q2 10Q3 10Q4 11Q1 11Q2 11Q3 11Q4 12Q1 12Q2 12Q3 12Q4
Slide 12: European Suppliers Expanding Pipeline Capacity
12 Simultaneously, European Suppliers are Undertaking a Significant Expansion of Pipeline Capacity New Pipeline Existing Pipeline Expansion Source: BP Statistical Review; GIIGNL; Cheniere Research Consumption 2006: 50 Bcf/d Production 2006: 26 Bcf/d Piped Gas Import Trades 2006: 27 Bcf/d Total Incre
Slide 13: European Natural Gas Demand Projection
13 European* Natural Gas Demand Projection Bcf/d Source: Historical: Cedigaz (2007), GIIGNL; Forecast: IEA WEO (2007), Cheniere Research Regional Demand by Country (2007) Europe-Med 15 W. Europe 18 U.K. 9 LNG Pipeline 70 60 50 40 30 20 10 0 2007 2010E Pipeline LNG 89% 90% 7 Bcf/d 5 Bcf/d Domestic Pr
Slide 14: Asia Pacific Natural Gas Demand Projection
14 Asia Pacific* Natural Gas Demand Projection Pipeline Bcf/d Source: Historical: Cedigaz (2007); Forecast: IEA WEO (2007), Cheniere Research 30 25 20 15 10 5 0 2007 2010 Oil Indexed Pipeline LNG Japan 9 15 Bcf/d Korea 3 China 7 Australia 3 India 4 Taiwan 1 18 Bcf/d LNG 56% LNG 62% Incremental LNG N
Slide 15: Projected LNG Flows in 2010
15 Projected LNG Flows in 2010 Existing Liquefaction Under Construction Proposed Liquefaction MEG LNG Reaching Atlantic Basin: 5-6 Bcf/d Total Atlantic Basin LNG Supply: 15-16 Bcf/d Atlantic Basin ~11 Bcf/d ME Gulf 13 Bcf/d Asia Pacific 13 Bcf/d 2010 Europe 6 - 8 Bcf/d 2010 Asia Pacific 18 Bcf/d 201
Slide 16: Potential Supply Scenario
16 Potential Supply Scenario Scenario based on 37 Bcf/d capacity coming on line by YE 2010 Source: Cheniere Research Production Bcf/d Nameplate Capacity 37 Delivered LNG 33 Capacity Factor 88% Consumption Europe 6 – 8 Asia Pacific 17 – 19 Mexico/ S. America 0.5 – 1 Total Non U.S./Canada Consumption
Slide 17: Domestic Implications
17 Domestic Implications The supply scenario is independent of world prices, and is driven by an unprecedented short-term expansion in liquefaction capacity If the unprecedented growth in unconventional domestic production continues, these two supply “waves” will collide head-on Would tend to reinfo
Slide 18: Conclusion
18 Conclusion Natural gas price? $6, $8, $10 We expect very volatile natural gas markets given the combination of nonconventional resources and LNG imports Increase in LNG imports could decrease domestic gas price, which discourages production Decrease in domestic gas price could lead to increase in
Slide 19: Appendix
CHENIERE Appendix
Slide 20: Organizational Structure
20 Organizational Structure Public Unitholders 9.4% LP Interest Cheniere Energy Investments, LLC Sabine Pass LNG-GP, Inc. Sabine Pass LNG, L.P. Sabine Pass LNG-LP, LLC 100% Ownership Interest 100% Ownership Interest 100% Ownership Interest 100% LP Interest Non-Economic GP Interest 100% Ownership Int
Slide 21: Condensed Balance Sheet
21 Condensed Balance Sheet Cheniere Energy Partners, L.P. Other Cheniere Energy, Inc. (1) Consolidated Cheniere Energy, Inc. (3) Unrestricted cash (2) $ - $ 128 $ 128 Restricted cash and securities 451 127 578 Property, plant and equipment 1,483 655 2,138 Goodwill and other assets 87 118 205 Total a
Slide 22: Expected Cash Flows Between LNG and CQP/Sabine
22 Expected Cash Flows Between LNG and CQP/Sabine Body: (1) Cheniere owns 90.6% of CQP through units held and expects to receive $1.70 per unit in distributions within 45 days of each quarter end (2) Cheniere has three operations/management contracts with Sabine Pass / CQP under which Cheniere will
Slide 23: Contracted Capacity – TUAs
23 Contracted Capacity – TUAs (1) Fees do not vary with the actual quantity of LNG processed; tax reimbursement not included in the fees. (2) No inflation adjustments. (3) Subject to annual inflation adjustment. (4) Subject to terminal completion. (5) Cheniere Marketing TUA payments for 2008 were $1
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