Cheniere Energy, Inc. · NYSE:LNG
Cheniere Energy — Investor Presentation (June 2010)
27 slides from Cheniere Energy's investor presentation, Jun 28, 2010
Slide 1: Cheniere Energy, Inc. Corporate Presentation
CHENIERE ENERGY Cheniere Energy, Inc. Corporate Presentation June 2010
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 Business Segments
Cheniere Business Segments Cheniere Energy, Inc. (“Cheniere”) Terminals Pipelines Marketing (“CMI”) Sabine Pass LNG (SPLNG) Creole Trail P/L (100%) 2 Bcf/d Capacity at SPLNG** (90.6%)* Approved Approved JPMorgan Arrangement Permits: Creole Trail LNG Permits: Creole Trail P/L Phase II Corpus Christi
Slide 4: Sabine Pass LNG
Sabine Pass LNG Cheniere Energy, Inc. 90.6% Aerial view of Sabine Pass LNG § 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 Parish, LA § Access
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 intercon
Slide 6: 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 7: 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 8: 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 9: 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 10: 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 11: 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 12: 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 $102 million of 9.75% term loan § Assigned CMI TUA to CQP subsidiary and en
Slide 13: JPMorgan Arrangement
JPMorgan Arrangement § Cheniere and JPMorgan joined LNG marketing efforts § CMI provides all services related to: – sourcing deals and negotiating contracts, purchasing, transporting, receiving, storing, regasifying and selling cargoes of LNG and regasified LNG on an exclusive basis § JPM provides c
Slide 14: Cheniere and CQP Restructure Marketing Arrangement
Cheniere and CQP Restructure Marketing Arrangement* Transaction Summary § CMI assigned its 2.0 Bcf/d TUA with Sabine Pass LNG to direct subsidiary of CQP, Cheniere Energy Investments, LLC (“Investments”) § Investments will make TUA payments to Sabine Pass LNG effective 7/1/2010 § CMI / Investments e
Slide 15: Organizational Structure
Organizational Structure TUA Assignment and new VCRA NYSE Amex US: LNG 100% Ownership Interest Cheniere LNG Holdings, LLC Cheniere Marketing, LLC 88.6% LP Interest 100% of 2% GP Interest NYSE Amex US: CQP VCRA Public Unit 9.4% LP Interest holders 100% Ownership Interest Cheniere Energy Investments,
Slide 16: Estimated Future Cash Flows
Estimated Future Cash Flows Cheniere Energy, Inc. ($ in Annualized* MM) 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 $45 - outfl
Slide 17: Estimated Future Cash Flows
Estimated Future Cash Flows Cheniere Energy Partners ($ in Annualized* MM) 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 18: 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 19: Appendix
CHENIERE Appendix
Slide 20: LNG Supply and Demand Trends
LNG Supply and Demand Trends Bcf/d(e) 24.2 15 7 2 Source: Poten
Slide 21: YoY Change in LNG Supply Trends
YoY Change in LNG Supply Trends Well-below Average for Second Year Schedule slippage, Skikda underperformance Explosion FMs, Maintenance Source: GIIGNL, Cheniere Research, 2009e
Slide 22: YoY Changes in LNG Supply and Demand
YoY Changes in LNG Supply and Demand Export Variance 09 v 08 Import Variance 09 v 08 MTPA MTPA Supply growth masked by production losses by traded markets Source: Poten
Slide 23: 2009 'Anomaly'
2009 ‘Anomaly’ Europe Oversupplied but LNG Imports Up Recession induced demand reduction ~4 Bcf/d Med - 1.5% (-7 cargoes, despite addition of Rovigo in Italy) NWE + 109 % (+145 cargoes) Source: Note: NWE = UK, BE, + Waterborne Montoir
Slide 24: Spot LNG By Destination Region
Spot LNG By Destination Region Loose Gradual Tightening Loose Traded Liquid Markets Source: GIIGNL, Cheniere Research , 2009e
Slide 25: North America Onshore Regasification Capacity By 2010
North America Onshore Regasification Capacity By 2010 15.8 Bcf/d North American Atlantic Basin Terminal Capacity Holder Baseload Sendout capacity @ 65% utilization = 10.3 Bcf/d (MMcf/d) Canaport 1,000 Canaport Irving, Repsol Everett - Suez 700 Cove Point 1,800 BP, Statoil, Shell Everett Elba Island
Slide 26: Cheniere Energy Investor Relations
CHENIERE ENERGY Cheniere Energy Investor Relations Katie Pipkin, Vice President (713) 375-5110 - katie.pipkin@cheniere.com Christina Cavarretta, Manager (713) 375-5104 - christina.cavarretta@cheniere.com
Slide 27: Slide 27