Cheniere Energy, Inc. · NYSE:LNG

Cheniere Energy — Investor Presentation (June 2017)

51 slides from Cheniere Energy's investor presentation, June 2017

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

    CHENIERE ENERGY, INC. CORPORATE PRESENTATION | June 2017 1

  2. 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

  3. Slide 3: Cheniere Overview

    CHENIERE OVERVIEW CHENIERE al

  4. Slide 4: 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 ex

  5. Slide 5: Cheniere LNG Cargo Destinations

    Cheniere LNG Cargo Destinations More than 100 Cargoes (~400 TBtu) Exported and Delivered to 20 Countries Across the Globe London, U.K. Washington, DC Spain Japan, South Korea Portugal Italy, Malta, Tokyo, Japan Egypt, Turkey, Dominican Jordan China Republic Kuwait, Houston, TX Mexico UAE, India, Pak

  6. Slide 6: Market Leading Position Along the Value Chain

    Market Leading Position Along the Value Chain Commercial Operations & Gas Supply Origination Business Development Gas Supply Asset Optimization Ensure reliable gas delivery Optimize and monetize Deliver term contracts to Invest along LNG value to LNG facilities excess cargoes; deliver to underwrite

  7. Slide 7: Cheniere Corporate Structure

    Cheniere Corporate Structure Cheniere Energy, Inc. (CEI) (NYSE MKT: LNG) Cheniere Energy Partners Cheniere Marketing, CQP GP Cheniere CCH LP Holdings, LLC LLC (& IDRs) Holdco II, LLC (NYSE MKT: CQH) (CMI) Cheniere Energy Cheniere CCH Partners, L.P. Holdco I, LLC (NYSE MKT: CQP) Creole Trail Pipeline

  8. Slide 8: Business Update

    BUSINESS UPDATE CHENIERE al

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

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

  10. Slide 10: Sabine Pass Liquefaction Construction Progress

    Sabine Pass Liquefaction Construction Progress Trains 1, 2, and 3 in Operation, Train 4 Expected 2H 2017, Train 5 Expected 2019 2012 2013 2014 2015 2016 2017 2018 2019 2020 Train 1 Train 2 Sabine Pass Train 3 Train 4 Nov 2017 Train 5 Aug 2019 Guaranteed Schedule DFCD Window Current Completion Schedu

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

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

  12. Slide 12: Corpus Christi LNG Terminal

    Corpus Christi LNG Terminal Attractive Land Position Initiated  >1,000 acres owned and/or controlled Development  2 berths, 4 LNG storage tanks Trains 4-5 (~13.5 Bcfe of storage) Key Project Attributes  45 ft. ship channel 14 miles from coast  Protected berth  Premier site conditions  23-mile

  13. Slide 13: Corpus Christi Liquefaction Construction Progress

    Corpus Christi Liquefaction Construction Progress Trains 1 & 2 Expected Completion 2019 2012 2013 2014 2015 2016 2017 2018 2019 2020 Corpus Christi Train 1 1H 2019 Train 2 2H 2019 Guaranteed Schedule DFCD Window Opens(1) Current Completion Schedule Progress  Stage 1 (Trains 1 & 2) 61.7% complete ov

  14. Slide 14: Corpus Christi Liquefaction Project Execution – April 2017

    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 14

  15. Slide 15: LNG Operations

    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 and l

  16. Slide 16: Sabine Pass Liquefaction Gas Supply

    Sabine Pass Liquefaction Gas Supply  Diverse and redundant pipeline Transportation into SPL (TBtu/day) Contracted Total network has allowed SPL to reach Pipeline Capacity Capacity into almost every North American CTPL 1.530 1.530 supply basin NGPL 0.550 0.750 Transco 1.200 1.500  SPL has transacte

  17. Slide 17: Corpus Christi Liquefaction Pipeline Infrastructure Secured

    Corpus Christi Liquefaction Pipeline Infrastructure Secured  Sufficient firm pipeline capacity for Train Potential Supply Points 1 and Train 2 operations secured  Once CCPL is completed by end of NGPL Tennessee Gas 2017, Gas Supply ready to commission HPL pipeline and compression needed for KM Tej

  18. Slide 18: Marketing and Origination

    Marketing and Origination 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 London, U.K. require rapid time to market and increased flexibility in the Washington, D.C. initial stage of a term Tokyo, Japan com

  19. Slide 19: LNG Market Outlook

    LNG MARKET OUTLOOK 19 CHENIERE al

  20. Slide 20: LNG Fundamentals are Supportive of Long-Term Growth

    LNG Fundamentals are Supportive of Long-Term Growth LNG Demand vs. Supply (mtpa) Global LNG market 500 Market tightening 450 needs competitive new New Supply 400 supplies to fill the 350 (127 mtpa) Under Construction approaching supply 300 gap 250 Newly Operational 200 150 100 Existing Capacity 50 0

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

    Demand Forecast to Grow More than 200 mtpa by 2030 Driven by Supplemental & Growth Markets Demand mtpa LNG Market Segmentation Type Characteristics Locations Growth 500 (mtpa) Indonesia 450 Malaysia Countries with maturing Egypt indigenous resource Supplemental Pakistan +85 bases require new 400 Tha

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

    U.S. LNG Expected to be Key in Satisfying Robust Global Gas Growth Forecast GDP Growth Levels by Region 6% Emerging economies 5% 2015-2020 drive global growth and 4% 2021-2025 gas demand 3% 2% 1% China and India plan to 0% Emerging Africa Central Asia MENA Canada & Latam & Europe Asia grow gas share

  23. Slide 23: Strategic Advantages and Growth

    STRATEGIC ADVANTAGES AND GROWTH 23

  24. Slide 24: Cheniere Offers Low Cost Incremental LNG Liquefaction Capacity

    Cheniere Offers Low Cost Incremental LNG Liquefaction Capacity  U.S. natural gas is abundant and cost competitive with other sources of global supply  U.S. Gulf Coast liquefaction project costs are also significantly lower due to less project development needed and access to affordable and skilled

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

    Leveraging Infrastructure and Expertise: A Key Competitive Advantage Leverage Existing Infrastructure to Enable Competitive, Incremental Liquefaction Capacity  Premier LNG provider with proven track record and  Able to leverage existing network to supply economies of scale incremental gas to feed

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

    Cheniere Full Service a Structural Competitive Advantage U.S. Pipeline, Storage Liquefaction Shipping/DES Sales LNG to Power and Gas Supply Feed FOB DES Gas sales sales  One of largest pipeline  3 trains in operation, 1 train  Cheniere Marketing  Global origination team capacity holders in U.S.:

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

    Cheniere Has Speed To Market Advantage as Balance Tightens mtpa LNG Capacity FID 50 Forecast FID slowdown Incremental LNG Supply started in 2014 - 40 setting up a tightening cycle post- 30 2020 20 10 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 202

  28. Slide 28: Corpus Christi Expansion

    Corpus Christi Expansion Corpus Christi Property Allows for Major Expansion of Cheniere’s Existing Footprint Stage 2 Stage 3 In Development  Train 3 fully permitted, partially commercialized  Brownfield economics with significant infrastructure already installed Stage 3 Stage 2: Train 3 Fully Perm

  29. Slide 29: Sabine Pass Expansion

    Sabine Pass Expansion Sabine Pass Property Allows for Major Expansion of Cheniere’s Existing Footprint Train 6  Fully permitted Train 4 Train 5  Attractive expansion Commissioning Under Construction economics Potential Expansion Train 6  Rights to additional Fully Permitted 524 acres of land east

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

    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 esti

  31. Slide 31: Cheniere's Existing LNG Platform Creates Advantages for Growth

    Cheniere’s Existing LNG Platform Creates Advantages for Growth Construction Operations  Significant infrastructure investment at  Ability to scale quickly and effectively Corpus Christi and Sabine Pass sites  Scale helps reduce operating expense – • Site preparation  Operating expense associated

  32. Slide 32: Financial Update

    FINANCIAL UPDATE 32 CHENIERE al

  33. Slide 33: Cheniere Debt Summary – June 2017

    Cheniere Debt Summary – June 2017 Cheniere Energy, Inc. CEI Revolver  $0.75B senior secured revolving credit facility due 2021 CEI Cash Balance: ~$0.9B(1) (CEI) Convertible Debt (NYSE MKT: LNG)  $1.0B PIK Convertible Notes due 2021 (4.875%)  $0.6B Convertible Notes due 2045 (4.250%) Trains 1 - 2

  34. Slide 34: Financial Priorities: Past and Present

    Financial Priorities: Past and Present 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 Facilities and launch inaugural Cheniere Prior Goals  Corpus Chr

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

    Balance Sheet Underpinned by Strong Counterparty Credits Cheniere Counterparty Exposure Cheniere 11 External SPA Customers(1)  All 20-year “take or pay” style SPAs with investment grade (“IG”) counterparties AA- to AA+ Rated 20.2%  Average portfolio rating of A / A3 / A and BBB / Baa2 / BBB+ for S

  36. Slide 36: 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

  37. Slide 37: Where We've Been: Maturity Profile Progression

    Where We’ve Been: Maturity Profile Progression CQP / SPL Debt Maturity Profile Progression: H1 2016 to Today $6.0 SPLNG - Senior Notes $6.0 CQP - Credit Facilities $5.0 H1 2016 CTPL - Term Loan Today SPL - Senior Notes $5.0 SPL - Credit Facilities $5.0 SPL - Senior Notes $4.0 $4.0 Projected CQP Run-

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

    Run Rate Guidance: 7 Train Case 7 Trains SPL T1-5, ($bn, except per share amounts or unless otherwise noted) 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 I

  39. Slide 39: Appendix

    APPENDIX 39 CHENIERE al

  40. Slide 40: Cheniere Liquefaction Projects at a Glance

    Cheniere Liquefaction Projects at a Glance Sabine Pass Liquefaction Project Corpus Christi Liquefaction Project Liquefaction Technology EPC Contractor Financial Partner Investment Grade SPA Counterparties Maintenance Contract Servicer Total mtpa under construction or operating 22.5 9.0 Trains 1 – 3:

  41. Slide 41: Sabine Pass Liquefaction SPAs

    Sabine Pass Liquefaction SPAs ~20 mtpa “take-or-pay” style commercial agreements ~$2.9B annual fixed fee revenue for 20 years 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) 182,500,0

  42. Slide 42: Corpus Christi Liquefaction SPAs

    Corpus Christi Liquefaction SPAs SPA progress: ~8.42 mtpa “take-or-pay” style commercial agreements ~$1.5B annual fixed fee revenue for 20 years PT Pertamina Woodside Energy EDP Energias de (Persero) Endesa S.A. Iberdrola S.A. Gas Natural Fenosa Trading Électricité de France Portugal S.A. Annual Con

  43. Slide 43: Liquefaction Capacity

    Liquefaction Capacity What adjusted capacity can be expected from Cheniere’s 7 trains?  Adjusted nominal capacity is expected to range between 4.3 and 4.6 mtpa in run-rate years • Preliminary overdesign assessment in progress; require warm weather data • Low end is driven by years with major planne

  44. Slide 44: Financial Appendix

    FINANCIAL APPENDIX 44 CHENIERE al

  45. Slide 45: Consolidated vs. Deconsolidated

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

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

    CEI Deconsolidated Five Year Sources and Uses Projected Available Cash Generation: 2017 – 2021 $8.0 $bn Sources: ~$6.5 billion Uses: ~$6.5 billion Available Cash $6.0 $0.8 CQP GP / IDR Distributions  Grow (CCH T3, etc.)  Buy back Stock  Pay Dividend $0.9 CEI Beginning Cash on Hand $0.8 CMI Cash F

  47. Slide 47: Run Rate Guidance: Impact of Additional Train at CCH

    Run Rate Guidance: Impact of Additional Train at CCH Additional Run-Rate Distributable Cash Flow 7 Trains 8 Trains (1) SPL T1-5, CCH T3 SPL T-5, ($bn, except per share amounts or unless otherwise noted) CCH T1-2 CCH T1-3 CEI Consolidated Adjusted EBITDA $3.8 - $4.1 $0.4 - $0.6 $4.2 - $4.7 Less: CQP/

  48. Slide 48: Summary Projected Amortization Requirements at Project Levels

    Summary Projected Amortization Requirements at Project Levels 7 Trains without utilizing 7 Trains utilizing ($bn) Corporate Debt Capacity 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

  49. Slide 49: Forecasting Points

    Forecasting Points CEI Cash Tax Payments Begin Late 2020s CQH Tax Sharing Payments Begin Early 2020s 2020 - 2040 Tax Rate Percentage of Pre-Tax Cash Flow CEI High Teens CQH Mid 20%s  As of December 31, 2016, CEI’s and CQH’s federal NOL carryforwards are equal to $3.8 billion and $1.7 billion, respe

  50. Slide 50: Reconciliation to Non-GAAP Measures

    Reconciliation to Non-GAAP Measures Regulation G Reconciliations Adjusted EBITDA In addition to disclosing financial results in accordance with U.S. GAAP, the accompanying news release contains The following table reconciles our Adjusted EBITDA to U.S. GAAP results for the three months ended March 3

  51. Slide 51: 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 51

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