Cheniere Energy, Inc. · NYSE:LNG
Cheniere Energy — Investor Presentation (November 2009)
32 slides from Cheniere Energy's investor presentation, Nov 20, 2009
Slide 1: Cheniere Energy Corporate Presentation
CHENIERE ENERGY Cheniere Energy Corporate Presentation November
Slide 2: Safe Harbor Act
Safe Harbor Act 1 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 s
Slide 3: Cheniere Business Segments
Cheniere Business Segments Cheniere Energy Marketing 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 B
Slide 4: Freeport LNG Terminal Use Agreement Capacity and Distributions
Sold - Terminal Use Agreement (TUA) Capacity (Bcf/d) Estimated Annual Distribution to Cheniere* Conoco Dow Mitsubishi 0.90 0.50 0.15 ~ $15MM Freeport LNG Development, L.P. Cheniere Energy, Inc. 30% *Quarterly cash distributions commenced in 1Q09 and are subject to Freeport board approval. April
Slide 5: Sabine Pass LNG
TUA Capacity 2010 Full-Year Payments ($ in MM) Total LNG USA Chevron USA Cheniere Marketing 1.0 Bcf/d 1.0 Bcf/d 2.0 Bcf/d $123 $128 $252 3 Sabine Pass LNG Cheniere Energy, Inc. 90.6% Aerial view of Sabine Pass LNG August 2009 § Vaporization – ~4.3 Bcf/d peak send-out § Storage – 5 tanks x 160,000 cm
Slide 6: Creole Trail Pipeline
Creole Trail Pipeline Cheniere Energy, Inc. 100% § Size: – 2.0 Bcf/d § Diameter: – 42-inch diameter § Cost: – ~$560 million first 94 miles § Initial interconnects: – 4.1 Bcf/d of interconnect capacity § Provides optimal market access for LNG from the Sabine Pass terminal § First 94 miles complete an
Slide 7: Strategic Focus
Strategic Focus § Commercial - monetize 2 Bcf/d regas capacity at Sabine Pass receiving terminal held by Cheniere Marketing – International LNG marketing efforts – Seek long-term TUAs, LNG purchase/sale agreements – Purchase spot cargoes available in the Gulf of Mexico § Financial - manage liquidity
Slide 8: Estimated Future Cash Flows Cheniere Energy, Inc.
Estimated Future Cash Flows Cheniere Energy, Inc. Annualized* ($ in MM) Disbursements § Cheniere Marketing TUA @ Sabine Pass $252 § G&A 30-40 § Pipeline & tug services 10 § Other, incl adv tax payments 3-5 § Debt service 44 $50 - *Estimates represent a summary of internal forecasts, are based on cur
Slide 9: Estimated Future Cash Flows Cheniere Energy Partners
Estimated Future Cash Flows Cheniere Energy Partners Annualized* ($ in MM) Disbursements § Operating Expenses $34 § Management Fees 19 § Debt Service 165 $285 *Estimates represent a summary of internal forecasts, are based on current assumptions and are subject to change. Actual performance may diff
Slide 10: Current Global Issues for LNG and Natural Gas
Current Global Issues for LNG and Natural Gas § The world has abundant reserves of natural gas, but will they be produced? § The current global gas oversupply is expected to last at least 2 to 4 years § The growth of LNG production capacity will provide a bridge between the continents – Flexible LNG
Slide 11: Global Prices & Linkage Implications
Global Prices & Linkage Implications Source: PIRA Energy Group, Petroleum Association of Japan (JCC) Note: 6 MMBtu per 1 Oil Barrel JCC = Japanese Crude Cocktail • Convergence of spot prices • Disconnect from crude
Slide 12: Global Natural Gas Supply & Demand
Bcf/d Bcf/d Global Natural Gas Supply & Demand Rapid reserve and demand growth Since World Gas Demand: +94% World Gas Reserves:+140% Source: EIA 2009 (Historical World Reserves & Demand)
Slide 13: Global Potential for Unconventional Gas Production is Huge
Global Potential for Unconventional Gas Production is Huge “[Ultimately recoverable remaining resources of] Non- conventional gas resources - including coalbed methane, tight gas sands and gas shales - are much larger, amounting perhaps to over 900 tcm (31,000 Tcf), with 25% in the US and Canada com
Slide 14: Liquefaction Capacity Growing Sharply
Liquefaction Capacity Growing Sharply Source: Cheniere Research
Slide 15: Expected Incremental Capacity
Expected Incremental Capacity • Slippage in startup of commercial deliveries: QG II T4, Tangguh, Yemen Source: Cheniere Research
Slide 16: Russia and U.S. Account for Nearly 40% of Natural Gas Production
Russia and U.S. Account for Nearly 40% of Natural Gas Production Source: BP Statistical Review 2009
Slide 17: How Will Current Market Conjuncture Affect Pricing Mechanisms?
How Will Current Market Conjuncture Affect the Evolution of these Pricing Mechanisms? Source: IGU- Natural Gas Industry Study to 2030
Slide 18: Asia Pacific Natural Gas Demand Projection
Oil Indexed Japan 9 15 Bcf/d Korea 3 China 7 Australia 3 India 4 Taiwan 1 16 Bcf/d Bcf/d Asia Pacific* Natural Gas Demand Projection Bcf/d Source: Historical: Cedigaz (2007); Forecast: Cheniere Research Pipeline LNG LNG 56% LNG 50% Incremental LNG Need = ~1 Bcf/d Consumption = 27 Bcf/d = 32 Bcf/d *
Slide 19: New Asia Pipelines
New Asia Pipelines Major projects boost access to indigenous reserves Krishna Godavari Basin Turkmenistan- China Pipeline +3 Bcf/d CBM India KJV Pipeline +2.8 Bcf/d China West- East #2 Pipeline +2.9 Bcf/d CBM CBM Central Asia Tcf Proved* Russia 1,600 Tcf Proved Source: Cheniere Research, BP Statisti
Slide 20: European Suppliers Expanding Pipeline Capacity
European Suppliers are Undertaking a Significant Expansion of Pipeline Capacity
Slide 21: Projected LNG Flows in 2010
Atlantic Basin ~11 Bcf/d ME Gulf 13 Bcf/d Asia Pacific 13 Bcf/d Europe 5-7 Bcf/d Asia Pacific 16 Bcf/d Projected LNG Flows in 2010 Global LNG Supply of ~30 Bcf/d Existing Liquefaction Under Construction Proposed Liquefaction Liquefaction Capacity Consumption Source: Cheniere Research MEG LNG to Atla
Slide 22: North America
North America § Critical role of US in global gas market Questions: § Can the US absorb the LNG? § Will LNG become a part of the US energy mix? § What are the implications for oil & gas linkage in the US & globally?
Slide 23: US Unconventional Production Basins Proximate to Premium Markets
US Unconventional Production Basins Proximate to Premium Markets and Major Pipelines Sources: EIA (US map graphic, pipelines and LNG terminals placed by Cheniere). Advanced Resources Intl (Lower 48 Unconventional Recoverable Reserves) Depicted Pipelines: Rockies Express, Texas Eastern, Trunkline, Tr
Slide 24: US Gas Rig Count, Production & Prices
US Gas Rig Count, Production & Prices Drilling has Collapsed with Price, Oversupply + 2.7 Bcf/d YE ’08 Rigs - -58% from ’08 Peak Gas Prices -80% from ’08 Peak Annual average Lower 48 Production (Bcf/d)
Slide 25: Lower Wellhead Production & Gas Rig Count
Lower 48 Wellhead Production & Gas Rig Count Productive Capacity will Fall Sharply as Drilling is Curtailed Lower 48 Dry Gas Production Lower 48 Gas Rig Count Source: Lippman Consulting, EIA, Baker Hughes, Cheniere Research
Slide 26: Conclusions
Conclusions § North America is about to join the global gas market § Unconventional reserves and the growth of the LNG trade are challenging the conventional business models § Questions: – Can the oil linked model survive? – Which gas price index would replace it? – What is the gas price required to
Slide 27: Appendix
Appendix
Slide 28: Organizational Structure
3 Organizational Structure Public Unit holders 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 29: Expected Cash Flows Between LNG and CQP/Sabine
Expected Cash Flows Between LNG and CQP/Sabine (1) (2) (3) (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 wi
Slide 30: Condensed Balance Sheet
- Condensed Balance Sheet Cheniere Energy Other Cheniere Consolidated Unrestricted cash $ $ $ Restricted cash and securities (2) Property, plant and equipment 1,605 2,238 Goodwill and other assets Total assets Deferred revenue and other liabilities $ (41) $ $ Long-term debt 2,182 3,029 Non-Controlli
Slide 31: Contracted Capacity - TUAs
Contracted Capacity - TUAs 6 (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. Summary of 20-year Terminal Use Agreements Total LNG Chevron USA Cheniere Marketing Capac
Slide 32: Historical LNG Imports by Region (Bcf/d)
Historical LNG Imports by Region (Bcf/d) Source: Waterborne LNG, EIA
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