Cheniere Energy, Inc. · NYSE:LNG
Cheniere Energy — Investor Presentation (August 2018)
36 slides from Cheniere Energy's investor presentation, Aug 27, 2018
Slide 1: Corporate Presentation August 2018
CHENIERE ENERGY, INC. March 2018 CHENIERE ENERGY, INC. NYSE American: LNG CORPORATE PRESENTATION August 2018
Slide 2: Safe Harbor Statements
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 amend
Slide 3: Safe Harbor Statements (cont'd)
Safe Harbor Statements (cont’d) Additional Information and Where to Find It This presentation does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of a written consent in connection with the announced transaction between Cheniere Energy, Inc. a
Slide 4: Company Overview
COMPANY OVERVIEW
Slide 5: Cheniere Investment Thesis
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 exist
Slide 6: Cheniere's Expansive Footprint
Cheniere’s Expansive Footprint Sabine Pass Liquefaction Corpus Christi LNG Terminal Domestic Pipelines and Legacy Global Corporate Footprint to Project (SPL Project) Assets Facilitate Growth First greenfield LNG export facility in Four trains operating, and one the U.S. Lower-48 Creole Trail Pipelin
Slide 7: Consistently Delivering on Our Promises
Consistently Delivering on Our Promises “Cheniere is well-positioned for success as a global Four Trains at Sabine Pass completed within 17 months LNG market leader and I look forward to building upon safely, within budget, and ahead of schedule the many successes achieved to date. Our priorities
Slide 8: Sabine Pass Cargo Destinations
Sabine Pass Cargo Destinations More Than 400 Cargoes (~1,475 TBtu) Exported from Sabine Pass Since Startup Delivered to 28 Countries and Regions Across the Globe London, U.K. Lithuania, Netherlands, Poland, United Kingdom Japan, Washington, DC Portugal, South Korea Spain Beijing, China Egypt, Israel
Slide 9: Market Leading Position Along the Value Chain
Market Leading Position Along the Value Chain Safe, Reliable, and Efficient Production of LNG GAS SUPPLY COMMERCIAL OPERATIONS ORIGINATION BUSINESS & ASSET OPTIMIZATION DEVELOPMENT Ensure reliable gas delivery to Optimize and monetize excess Continue to deliver term contracts Invest along the LNG va
Slide 10: Depth of Expertise and Portfolio Provide Major Competitive Advantages
Depth of Expertise and Portfolio Provide Major Competitive Advantages Liquefaction Capacity Term FOB Offtake 8 Trains – 36 mtpa nominal capacity ~80-90% contracted(1) Large-Scale Existing Platform Reliable LNG production Portfolio Volumes S/T Monetization Economies of scale, ability to optimize valu
Slide 11: Cheniere Corporate Structure
Cheniere Corporate Structure Cheniere Energy, Inc. (CEI) (NYSE American: LNG) Cheniere Energy Partners CQP GP Cheniere Marketing, LLC Cheniere CCH LP Holdings, LLC (& IDRs) (CMI) Holdco II, LLC (NYSE American: CQH) Cheniere Energy Partners, Cheniere CCH L.P. Holdco I, LLC (NYSE American: CQP) Chenie
Slide 12: Liquefaction Projects Update
LIQUEFACTION PROJECTS UPDATE
Slide 13: LNG Projects Update
LNG Projects Update Construction Operations Progressing Efforts on Accelerated Schedules Reinforcing Global Reputation of Reliability . . 96.4% Overall Commissioning activities Managing plant variations and maintenance at Sabine Pass to underway for SPL Train 5 and minimize production impacts Train
Slide 14: Sabine Pass Liquefaction Project
Sabine Pass Liquefaction Project Liquefaction Trains 1-5: Fully Contracted . Trains 1 through 4 are complete and in operation – on budget and ahead of schedule Train 5 . Commissioning Train 5 is 96.4% complete overall and has a target in-service date of 1Q 2019 Growth . Train 6 is fully permitted -
Slide 15: Corpus Christi LNG Terminal
Corpus Christi LNG Terminal CCL Project Stage 1 Stage 3 FERC Application . FIled Trains 1 and 2 are 91.2% complete overall and have target in-service dates of 1H 2019 and 2H 2019, respectively CCL Project Stage 2 . Final Investment Decision and full Notice to Proceed issued in May 2018 . Train 3 is
Slide 16: Cheniere Liquefaction Projects at a Glance
Cheniere Liquefaction Projects at a Glance Sabine Pass Liquefaction Project Corpus Christi Liquefaction Project Liquefaction Technology EPC Contractor Creditworthy SPA Counterparties Maintenance Contract Servicer Total Mtpa(1) Under Construction or Operating 22.5 13.5 Firm Pipeline Capacity Note: SP
Slide 17: LNG Market Outlook
CHENIERE OVERVIEW LNG MARKET OUTLOOK
Slide 18: Asia Driving Robust Global LNG Demand Growth
Asia Driving Robust Global LNG Demand Growth Incremental Global LNG Supply & Demand 1H 2018 Incremental Demand Growth Leaders 1H 2018 MT MT LNG Demand LNG Supply 18 9 0.3 16 8 China’s LNG demand 15.7 (0.5) (0.2) grew more than 14 7 (2.8) 50% year over year 12 6 in 1H 2018 Nearly all new regional glo
Slide 19: US Increasing Global LNG Market Share in Strong Price Environment
US Increasing Global LNG Market Share in Strong Price Environment Global Gas Prices Top Global LNG Suppliers (1H 2018) $/MMBtu MT 20 45 39.1 40 JKM August settle $10.45/MMBtu 35 15 32.2 Oil parity 30 Asia L-T Contract 25 Proxy 10 Asia Spot LNG 20 15 TTF 12.1 5 10.3 10.3 9.5 10 8.7 5 Henry Hub 0 0 20
Slide 20: Domestic Gas Production Growth Supports HH-Linked LNG Thesis
Domestic Gas Production Growth Supports HH-Linked LNG Thesis Lower 48 Dry Gas Production Projected Production Growth by Basin Through 2019 (monthly average) Bcf/d 8 82 7 Permian expected to 6 outpace Marcellus/Utica 6.7 5 80 4 3 2 2.5 78 2.2 0.6 1 1.4 0 +6-7 Bcf/d Marcellus/Utica Haynesville Permian
Slide 21: Financial Update
SPL Project CHENIERE OVERVIEW FINANCIAL UPDATE
Slide 22: Second Quarter 2018 Results and Full Year 2018 Guidance
Second Quarter 2018 Results and Full Year 2018 Guidance Metric ($ in millions, excl. per share and LNG data) 2Q 2018 2Q 2017 YTD 2018 YTD 2017 Revenues $1,543 $1,241 $3,785 $2,452 Operating Income $336 $274 $1,083 $650 Net Income $150 $21 $750 $193 Net Income (Loss) Attributable to Common Stockholde
Slide 23: Corpus Train Highlights and 8-Train Run Rate Guidance
Corpus Train 3 Highlights and 8-Train Run Rate Guidance Transaction Highlights 8 Train Run Rate Guidance 7 Trains Online 8 Trains Online 7 Trains Online7 Trains Online 8 Trains Online8 Trains Online . Total cost ~$3.2 billion fully levered 7 TrainsSPL Online T1-5, 8 TrainsSPL Online T1-5, SPL T1-5,
Slide 24: New LNG Investment Considerations
New LNG Investment Considerations Evolving Fundamentals Facilitate Flexible Solutions . Strong cash flows from first trains and corporate debt capacity enable flexibility . High performance levels and focus on operational excellence enable optimization of excess capacity and flexible contract soluti
Slide 25: Cheniere Investment Thesis
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 exist
Slide 26: Appendix
CHENIERE OVERVIEW APPENDIX
Slide 27: LNG Production Capacity
LNG Production Capacity Adjusted nominal capacity is expected Nominal Adjusted Capacity to range between 4.3 and 4.6 mtpa in Capacity run-rate years . Preliminary overdesign assessment in progress; requires Debottleneck Maintenance more warm weather data Adjustments Overdesign . Low end is driven by
Slide 28: Cheniere Debt Summary
Cheniere Debt Summary CEI Revolver Cheniere Energy, Inc. (CEI) $0.75B senior secured revolving credit facility due 2021 CEI Cash Balance: ~$0.9B(1) Convertible Debt (NYSE American: LNG) $1.0B PIK Convertible Notes due 2021 (4.875%) $0.6B Convertible Notes due 2045 (4.250%) Cheniere Energy Partners C
Slide 29: Project Balance Sheets Underpinned by Strong Counterparty Credits
Project Balance Sheets Underpinned by Strong Counterparty Credits SPL and CCL Projects – Counterparty Exposure 14 External SPA Customers(1) . NR “Take or pay” style sale and purchase agreements (“SPAs”) with 2.4% 13 of 14 external counterparties rated as investment grade by at least two of the three
Slide 30: Run Rate Guidance
Run Rate Guidance 7 Trains Online 78 Trains Online 8 Trains Online 7 TrainsSPL Online T1-5, 8 TrainsSPL Online T1-5, SPL T1-5, SPL T1-5, SPL T1T1-5,-5, ($bn, except per share and per unit ($bn,amounts except or unless per share otherwise and per noted) unit amounts or unless otherwise noted) CCH T1-
Slide 31: Run Rate Guidance: Impact of Additional Train at SPL
Run Rate Guidance: Impact of Additional Train at SPL Additional Run-Rate Distributable Cash Flow 8 Trains Online 9 Trains Online SPL T1T1-5,-5, SPL T6 (2) SPLSPL T1 T-6,-6, ($bn, except per share and per unit amounts or unless otherwise noted) CCLCCH T1 T1-3-T3 CCLCCH T1 T1-3-T3 CEI Consolidated Adj
Slide 32: CEI Deconsolidated Five Year Sources and Uses
CEI Deconsolidated Five Year Sources and Uses Projected Available Cash Generation: 2018 – 2022 $12.0 $bn Sources: ~$10.9 billion Uses: ~$10.9 billion Available Free Cash Flow $10.0 $1.7 CQP GP / IDR Distributions . Grow • (SPL T6 Equity from CEI > $1bn) . $1.0 CEI Cash on Hand Buy back Stock . Pay D
Slide 33: Long-term Capital Structure Plan
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 CQP
Slide 34: Forecasting Points
Forecasting Points CEI Cash Tax Payments Begin Early - Mid 2020s CQH Tax Sharing Payments Begin Early 2020s 2020 - 2030 Tax Rate Percentage of Pre-Tax Cash Flow CEI 0 - 5% CQH 10 - 15% 2031 - 2040 Tax Rate Percentage of Pre-Tax Cash Flow CEI 15 - 20% CQH 15 - 20% . 2020-2030 CEI tax rate primarily d
Slide 35: Reconciliation to Non-GAAP Measures
Reconciliation to Non-GAAP Measures Consolidated Adjusted EBITDA Regulation G Reconciliations The following table reconciles our Consolidated Adjusted EBITDA to U.S. GAAP results for the three and six months In addition to disclosing financial results in accordance with U.S. GAAP, the accompanying n
Slide 36: Investor Relations Contacts
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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