Cheniere Energy Partners, Lp · NYSE:CQP

Cheniere Energy Partners, Lp — Investor Presentation (June 2017)

51 slides from Cheniere Energy Partners, Lp's investor presentation, Jun 9, 2017

  1. Slide 1: Cheniere Energy, Inc. Corporate Presentation June 2017

    1 CHENIERE ENERGY, INC. CORPORATE PRESENTATION | June 2017

  2. Slide 2: Safe Harbor Statements

    2 Safe Harbor 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 of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as ame

  3. Slide 3: Cheniere Overview

    3 CHENIERE OVERVIEW

  4. Slide 4: Cheniere Investment Thesis

    4 Cheniere Investment Thesis  Full-service LNG offering, including gas procurement, transportation, liquefaction, and shipping enables flexible solutions tailored to customer needs  Positioned as premier LNG provider, with a proven track record and low-cost advantage through capacity expansion at

  5. Slide 5: Cheniere LNG Cargo Destinations

    5 Cheniere LNG Cargo Destinations Cheniere Office Cheniere LNG Facility Portugal Kuwait, UAE, Pakistan India, Thailand Brazil Argentina Houston, TX Santiago, Chile Washington, DC London, U.K. Singapore Cargo Delivery Destination China Spain Mexico Dominican Republic Italy, Malta, Egypt, Turkey, Jord

  6. Slide 6: Cheniere as largest physical natural gas consumer and LNG player

    6  At current 3-train run rate, Cheniere is the largest physical natural gas consumer in the U.S.  7-train platform forecast to make Cheniere 2 to 3 times the next largest consumer  Cheniere holds capacity on most Gulf Coast interstate pipelines • Largest shipper on CTPL, Transco, KMLP  Projecte

  7. Slide 7: Cheniere Corporate Structure

    7 Cheniere Corporate Structure Cheniere Energy, Inc. (CEI) (NYSE MKT: LNG) Cheniere Energy Partners, L.P. (NYSE MKT: CQP) Sabine Pass LNG, L.P. (SPLNG) Total TUA (1 Bcf/d) Chevron TUA (1 Bcf/d) SPL TUA (2 Bcf/d) Sabine Pass Liquefaction, LLC (SPL) Creole Trail Pipeline, L.P. (CTPL) Cheniere Energy P

  8. Slide 8: Business Update

    8 BUSINESS UPDATE

  9. Slide 9: Sabine Pass Liquefaction Project (SPL)

    9 Sabine Pass Liquefaction Project (SPL) Expansive Site with Significant Infrastructure  Located in Cameron Parish, LA  40 ft. ship channel 3.7 miles from coast  2 berths; 4 dedicated tugs  5 LNG storage tanks (~17 Bcfe of storage)  5.3 Bcf/d of pipeline interconnection Liquefaction Trains 1 –

  10. Slide 10: Sabine Pass Liquefaction Construction Progress

    10 Sabine Pass Liquefaction Construction Progress Trains 1, 2, and 3 in Operation, Train 4 Expected 2H 2017, Train 5 Expected 2019 Note: Based on Guaranteed Substantial Completion Dates per EPC contract. Construction percentages complete as of April 30, 2017. DFCD Window Current Completion Schedule

  11. Slide 11: Sabine Pass Liquefaction Project Execution – April 2017

    11 Sabine Pass Liquefaction Project Execution – April 2017 Trains 1, 2 & 3 Operational Train 4 Commissioning Train 5 Under Construction Train 6 Fully Permitted

  12. Slide 12: Corpus Christi LNG Terminal

    12 Corpus Christi LNG Terminal Attractive Land Position  >1,000 acres owned and/or controlled  2 berths, 4 LNG storage tanks (~13.5 Bcfe of storage) Key Project Attributes  45 ft. ship channel 14 miles from coast  Protected berth  Premier site conditions  23-mile pipeline will connect to sever

  13. Slide 13: Corpus Christi Liquefaction Construction Progress

    13 Corpus Christi Liquefaction Construction Progress Trains 1 & 2 Expected Completion 2019  Stage 1 (Trains 1 & 2) 61.7% complete overall • Engineering 100% complete, procurement 81.4% complete, construction 33.7% complete • Target substantial completion mid-2019, several months ahead of guaranteed

  14. Slide 14: Corpus Christi Liquefaction Project Execution – April

    14 Corpus Christi Liquefaction Project Execution – April 2017 Stage 1: Trains 1& 2, Tanks A & C, Marine Berths Under Construction Stage 2 Train 3, Tank B Fully Permitted

  15. Slide 15: LNG Operations

    15 LNG Operations  Transition the trains from construction management to operations management safely, efficiently, and effectively  Identify and incorporate lessons learned • Cross-functional team working to identify lessons learned • Implement improvements and optimize processes across trains an

  16. Slide 16: Sabine Pass Facility Gas Supply Transportation

    16 Sabine Pass Facility Sabine Pass Liquefaction Gas Supply Transportation into SPL (TBtu/day) Pipeline Contracted Capacity Total Capacity CTPL 1.530 1.530 NGPL 0.550 0.750 Transco 1.200 1.500 KMLP 0.600 1.200 Total 3.880 4.980  Diverse and redundant pipeline network has allowed SPL to reach into a

  17. Slide 17: Corpus Christi Liquefaction Pipeline Infrastructure Secured

    17 Corpus Christi Liquefaction Pipeline Infrastructure Secured  Sufficient firm pipeline capacity for Train 1 and Train 2 operations secured  Once CCPL is completed by end of 2017, Gas Supply ready to commission pipeline and compression needed for CCL commissioning in 2018  CCL has built out a ge

  18. Slide 18: Marketing and Origination

    18 Marketing and Origination Singapore Houston, TX Santiago, Chile London, U.K. Washington, D.C. Chartered LNG Vessels SPAs with SPL and CCL Pre-Sold Volumes Expansive LNG Portfolio Available for Short, Mid, or Long-Term Sales on FOB or DES Basis  Firm volumes are used to structure term deals that

  19. Slide 19: LNG Market Outlook

    19 LNG MARKET OUTLOOK

  20. Slide 20: LNG Demand vs. Supply

    20 Existing Capacity Newly Operational Under Construction 0 50 100 150 200 250 300 350 400 450 500 2016 2018 2020 2022 2024 2026 2028 2030 LNG Demand vs. Supply (mtpa) Pacific Basin SPAs Atlantic Basin SPAs 0 50 100 150 200 250 300 350 400 450 500 2016 2018 2020 2022 2024 2026 2028 2030 Global LNG D

  21. Slide 21: Demand Forecast to Grow More than 200 mtpa by 2030

    21 - 50 100 150 200 250 300 350 400 450 500 2000 2005 2010 2015 2020 2025 2030 mtpa Demand Forecast to Grow More than 200 mtpa by 2030 Driven by Supplemental & Growth Markets LNG Market Segmentation Traditional Flex Growth Supplemental Type Characteristics Locations Demand Growth (mtpa) Supplemental

  22. Slide 22: U.S. LNG Expected to be Key in Satisfying Global Gas Growth

    22 U.S. LNG Expected to be Key in Satisfying Robust Global Gas Growth Source: Cheniere Research, Global Data, World Bank, Wood Mackenzie Note: Conversion from GW to Bcf/d assumes thermal efficiency of 61% (1) China plans to grow share of gas to 15% by 2030; India in the next few years 0% 1% 2% 3% 4%

  23. Slide 23: Strategic Advantages and Growth

    23 STRATEGIC ADVANTAGES AND GROWTH

  24. Slide 24: Cost competitiveness of delivered LNG to Asia

    24 $7.5 $8.6 $11.4 $12.2 $10.4 $8.5 $9.6 $12.2 $13.2 $13.2 $5 $10 $15 $20 Cheniere Gulf Coast Southeast Asia Western Canada Northwest Australia East Africa LN G P ri ce s ($ /M M B tu )  U.S. natural gas is abundant and cost competitive with other sources of global supply  U.S. Gulf Coast liquefac

  25. Slide 25: Leveraging Infrastructure and Expertise: A Key Competitive Advantage

    25 Leveraging Infrastructure and Expertise: A Key Competitive Advantage Leverage Existing Infrastructure to Enable Competitive, Incremental Liquefaction Capacity  Able to leverage existing network to supply incremental gas to feed additional trains • Significant investment in infrastructure – one o

  26. Slide 26: Cheniere Full Service a Structural Competitive Advantage

    26 Cheniere Full Service a Structural Competitive Advantage Liquefaction Shipping/DES Sales LNG to Power U.S. Pipeline, Storage and Gas Supply  One of largest pipeline capacity holders in U.S.: more than 5 Bcf/d  More than $400 million in annual capacity payments  Manage intra-month volume varian

  27. Slide 27: Cheniere Has Speed To Market Advantage as Balance Tightens

    27 -10 0 10 20 30 40 50 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 mtpa LNG Capacity FID Incremental LNG Supply Forecast Source: Cheniere interpretation of Wood Mackenzie data (Q1 2017)  LNG projects have long lead times f

  28. Slide 28: Corpus Christi Additional Land for Potential Expansion

    28 Additional Land for Potential Expansion Stage 3 In Development Stage 2: Train 3 Fully Permitted Stage 1: Trains 1 & 2 Under Construction Corpus Christi Expansion Corpus Christi Property Allows for Major Expansion of Cheniere’s Existing Footprint Stage 2  Train 3 fully permitted, partially commer

  29. Slide 29: Sabine Pass Expansion

    29 Sabine Pass Expansion Sabine Pass Property Allows for Major Expansion of Cheniere’s Existing Footprint Train 6  Fully permitted  Attractive expansion economics Potential Expansion  Rights to additional 524 acres of land east of Sabine Pass site  Existing footprint allows third LNG berth  Spa

  30. Slide 30: Midscale Liquefaction Project – Cost Analysis in Process

    30 Midscale Liquefaction Project – Cost Analysis in Process  Began Midscale project evaluation in early 2016  Reviewed 18 proposals from potential contractors  KBR/Siemens/Chart Consortium approved to continue with full FEED and EPC proposal to be completed September 2017  Initial capital cost e

  31. Slide 31: Existing LNG Platform Creates Advantages for Growth

    31 Cheniere’s Existing LNG Platform Creates Advantages for Growth Construction Operations  Significant infrastructure investment at Corpus Christi and Sabine Pass sites • Site preparation • Utilities • Storage • Shipping  Additional expansion at very competitive investment: ~$500-600/ton(1)  Posi

  32. Slide 32: Financial Update

    32 FINANCIAL UPDATE

  33. Slide 33: Cheniere Debt Summary – June 2017

    33 Cheniere Debt Summary – June 2017 Cheniere Energy, Inc. (CEI) (NYSE MKT: LNG) Cheniere Energy Partners, L.P. (NYSE MKT: CQP) Sabine Pass LNG, L.P. (SPLNG) Total TUA (1 Bcf/d) Chevron TUA (1 Bcf/d) SPL TUA (2 Bcf/d) Trains 1 - 5 Debt  $2.0B Notes due 2021 (5.625%)  $1.0B Notes due 2022 (6.250%)

  34. Slide 34: Financial Priorities: Past and Present

    34 Financial Priorities: Past and Present Prior Goals (Last 2 Years) Evolve Capital Structure and Execute Achieve Investment Grade (“IG”) Ratings at Sabine Pass Liquefaction, LLC • S&P, Fitch, and Moody’s all upgraded SPL senior secured debt to investment grade Term out remainder of 2020 SPL Credit

  35. Slide 35: Balance Sheet Underpinned by Strong Counterparty Credits

    35 AA- to AA+ Rated 20.2% A- to A+ Rated 20.3% BBB- to BBB+ Rated 59.5% Balance Sheet Underpinned by Strong Counterparty Credits Cheniere Counterparty Exposure SPA Customers Sabine Pass Liquefaction Corpus Christi Liquefaction Cheniere 11 External SPA Customers(1) (BBB / Baa2 / BBB+) (NR / Baa3 / BB

  36. Slide 36: Long-term Capital Structure Plan

    36 Long-term Capital Structure Plan  Utilize leverage capacity at CQP and CEI (the corporate levels) to delever SPL and CCH (the project levels) over the next 5-10 years  Debt incurrence test will force the deleveraging of SPL and CCH over time at 1.5x/1.4x DSCR  By migrating project debt up to C

  37. Slide 37: Maturity Profile Progression

    37 $8 .4 – $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 $7.0 $8.0 $9.0 CCH - Credit Facilities $1 .2 5 $1 .5 $1 .5 $4 .6 – $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 $7.0 $8.0 $9.0 CCH - Credit Facilities CCH - Senior Notes $1 .7 $0.4 $0.4 $4 .6 $5 .0 $2 .0 $1 .0 $1 .5 $2 .0 $2 .0 – $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 SPLNG - Senior

  38. Slide 38: Run Rate Guidance: 7 Train Case

    38 7 Trains ($bn, except per share amounts or unless otherwise noted) SPL T1-5, CCH T1-2 CEI Consolidated Adjusted EBITDA $3.8 - $4.1 Less: CQP/CQH Minority Interest ($0.9) - ($0.9) Less: CQP/SPL Interest Expense ($0.9) Less: CEI Interest Expense/Other ($0.0) Less: CCH Interest Expense ($0.5) CEI Di

  39. Slide 39: Appendix

    39 APPENDIX

  40. Slide 40: Cheniere Liquefaction Projects at a Glance

    40 Sabine Pass Liquefaction Project Corpus Christi Liquefaction Project 22.5 9.0 Trains 1 – 3: Operating Train 4: Commissioning Train 5: Under Construction (2H 2019) Trains 1-2: Under Construction (2019) Creole Trail NGPL Transco Kinder Morgan LA Corpus Christi Pipeline Tennessee NGPL Transco KM Tej

  41. Slide 41: Sabine Pass Liquefaction SPAs

    41 Sabine Pass Liquefaction SPAs BG Gulf Coast LNG Gas Natural Fenosa Korea Gas Corporation GAIL (India) Limited Total Gas & Power N.A. Centrica plc Annual Contract Quantity (MMbtu) 286,500,000 (1) 182,500,000 182,500,000 182,500,000 104,750,000 (1) 91,250,000 Annual Fixed Fees (2) ~$723 MM (3) ~$45

  42. Slide 42: Corpus Christi Liquefaction SPAs

    42 Corpus Christi Liquefaction SPAs PT Pertamina (Persero) Endesa S.A. Iberdrola S.A. Gas Natural Fenosa Woodside Energy Trading Électricité de France EDP Energias de Portugal S.A. Annual Contract Quantity (TBtu) 79.36 117.32 39.68 78.20 44.12 40.00 40.00 Annual Fixed Fees (1) ~$278 MM ~$411 MM ~$13

  43. Slide 43: Adjusted Capacity Expected from Cheniere's 7 Trains

    43 Liquefaction Capacity 4.5 mtpa Maintenance Adjustments Reliability Adjustments 4.3 mtpa 4.6 mtpa Planned Maintenance Unplanned Maintenance Nominal Capacity Adjusted Capacity What adjusted capacity can be expected from Cheniere’s 7 trains?  Adjusted nominal capacity is expected to range between 4

  44. Slide 44: Financial Appendix

    44 FINANCIAL APPENDIX

  45. Slide 45: Consolidated vs. Deconsolidated

    45 Consolidated vs. Deconsolidated CEI CCH Consolidated Deconsolidated SPL CQP and CQH SPLNG CTPL CMI CCPL CCL Minority Interest

  46. Slide 46: CEI Deconsolidated Five Year Sources and Uses

    46 Note: Assumes approximately 4.5 mtpa/train production case (1) Assumes current implied gross margin by CMI through 2019 and $2.50 gross margin thereafter, before 80/20 profit-sharing tariff with SPL/CCH $2.3 $0.6 $1.1 $1.2 $0.8 $1.3 $0.9 $0.8 $4.0 – $2.0 $4.0 $6.0 $8.0 Sources Uses $bn CEI Decons

  47. Slide 47: Impact of Additional Train at CCH

    47 7 Trains utilizing Corporate Debt Capacity CCH T3 Utilizing Corporate Debt Capacity CCH Debt Amortization Start at CCH Mid 2020s Late 2020s Migrated Debt to CEI ($bn) ~$2.0 - $2.5 ~$2.3 - $3.3 Debt at CCH(2) ~$6.5 - $7.5 ~$7.5 - $9.0 Debt at CEI(3) ~$2.6 - $3.1 ~$2.9 - $3.9 7 Trains 8 Trains ($bn

  48. Slide 48: Projected Amortization Requirements at Project Levels

    48 ($bn) 7 Trains without utilizing Corporate Debt Capacity 7 Trains utilizing Corporate Debt Capacity SPL Debt Amortization Start at SPL (1.5x DSCR) Early 2020s Mid-Late 2020s Migrated Debt to CQP (5.0x debt / EBITDA) – ~$3.0 - $4.0 Debt at SPL (project) $13.7 ~$9.7 - $10.7 Debt at CQP (corporate)

  49. Slide 49: Forecasting Points

    49 Forecasting Points EIG Notes Conversion  CCH Holdco II Notes (EIG Notes) convert into ~20mm LNG shares in 2020 at estimated $94 / share (ultimate principal balance of ~$1.7B) • Conversion at a 10% discount to LNG’s share price • Only 50% of the EIG Notes can be converted at initial conversion an

  50. Slide 50: Reconciliation to Non-GAAP Measures

    50 Reconciliation to Non-GAAP Measures Regulation G Reconciliations In addition to disclosing financial results in accordance with U.S. GAAP, the accompanying news release contains non-GAAP financial measures. Adjusted EBITDA, Distributable Cash Flow and Distributable Cash Flow per Share are non-GAA

  51. Slide 51: Investor Relations Contacts

    51 CHENIERE ENERGY, INC. INVESTOR RELATIONS CONTACTS Randy Bhatia Vice President, Investor Relations – (713) 375-5479, randy.bhatia@cheniere.com Megan Light Manager, Investor Relations – (713) 375-5492, megan.light@cheniere.com

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