Cheniere Energy, Inc. · NYSE:LNG
Cheniere Energy — Credit Suisse Energy Summit February 2008
24 slides from Cheniere Energy's conference presentation, Feb 5, 2008
Slide 1: Credit Suisse Energy Summit February 2008 Cheniere Energy, Inc.
1 Credit Suisse Energy Summit February 2008 CHENIERE ENERGY, INC. (Gp:) *Corpus Christi LNG, LLC Cheniere Energy, Inc. 100% *Artist’s Rendition (Gp:) *Creole Trail LNG, L.P. Cheniere Energy, Inc. 100% *Freeport LNG Development, L.P. Cheniere Energy, Inc. 30% * Sabine Pass LNG, L.P. Cheniere Energy P
Slide 2: Forward-looking statements
2 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 statements of his
Slide 3: Cheniere Marketing, Asset Development, Partnership Interests
3 Cheniere Marketing Asset Development Partnership Interests Sabine Pass LNG 4.0 Bcf/d LNG Terminal Cheniere Energy Partners, L.P. (AMEX:CQP) 90.6% Interest (GP & LP units) Creole Trail LNG Terminal Creole Trail Pipeline Corpus Christi LNG Terminal Freeport LNG Development, L.P. (Freeport LNG Termin
Slide 4: Freeport LNG Development, L.P.
4 Freeport LNG Development, L.P. Cheniere Energy, Inc. 30% Freeport LNG Construction Site August 2007 TUA Contracts totaling 1.55 Bcf/d Conoco 0.90 Bcf/d Dow 0.50 Bcf/d Mitsubishi 0.15 Bcf/d Operational in 2008 Facility ownership: Cheniere (30%), M. Smith (45%), Contango (10%) and Dow (15%) Contango
Slide 5: Cheniere Energy Partners, L.P. (AMEX: CQP)
5 Cheniere Energy Partners, L.P. (AMEX: CQP) Sabine Pass LNG, L.P. Cheniere Energy, Inc. 90.6% Sabine Pass Construction Site – January 2008 4 Bcf/d capacity contracted at Sabine Pass facility resulting in annual revenues of approximately: $256 MM from CVX and Total ~$256 MM from Marketing Operating
Slide 6: Next Generation of Terminals
6 Next Generation of Terminals Including Some Terminals Under Construction Higher construction costs: $1 billion for 1 Bcf/d Utilization constraints Operational Marine access Pipeline takeaway Storage Market size and access Affects regional price basis Seasonality $0.32 per MMBtu TUA is a thing of t
Slide 7: Creole Trail Pipeline Potential Interconnects
7 Sabine PL Targa Transco Gulf South Trunkline Jefferson Island Storage Sabine Pass LNG Terminal Project Creole Trail LNG Terminal Project Henry Hub Varibus NGPL Transco Bridgeline Tennessee Florida Gas Creole Trail Pipeline Liberty Storage Starks Storage Hackberry Storage Texas Eastern Gulf Coast M
Slide 8: Fuel Efficiency Projects
8 Fuel Efficiency Projects Projects include installation of waste heat recovery units and ambient air vaporizers Waste heat recovery utilizes waste heat from gas turbine generator exhaust to heat water for use in the submerged combustion vaporizers Ambient air vaporizers reheat LNG without using fue
Slide 9: Southern Trail Pipeline
9 Length: 330 to 400 miles Diameter: 36-inch & 42-inch segments Held non-binding open season, continuing to negotiate with respondents Initiating permitting: NEPA pre-filing Estimated In-service: as early as mid-2010 Southern Trail Pipeline Provide Southeast markets with incremental transportation c
Slide 10: LNG Fundamentals / Value of Marketing
10 LNG Fundamentals Value of Marketing
Slide 11: New Liquefaction Competes for Market Share
11 New Liquefaction Competes for Market Share Source: CERA, 2006 Atlantic Basin 12 Bcf/d ME Gulf 11 Bcf/d Asia Pacific 13 Bcf/d 2005 Europe 4.7 Bcf/d 2005 12.3 Bcf/d 2005 NA 1.8 Bcf/d (Gp:) 2010 Liquefaction Capacity (Gp:) 2005 Consumption 5 15 25 35 45 36 23 24 26 30 35 Bcf/d Liquefaction Capacity
Slide 12: Constraint is not Regasification but Natural Gas Consumption
12 Constraint is not Regasification but Natural Gas Consumption Source: GIIGNL; Waterborne LNG; Cheniere Research Regasification capacity reflects seasonal variations Bcf/d Asia Europe North America ¹ Average LNG imports ² Year-end capacity ³ Average LNG imports as percentage of year-end capacity *
Slide 13: Demand Seasonality will Impact Flows
13 Demand Seasonality will Impact Flows Source: IEA 2006 Demand 0 5 10 15 20 25 30 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Belgium Spain France UK US GC Bcf/d
Slide 14: European Storage: 2007 vs 5yr Avg
14 European Storage: 2007 vs 5yr Avg Source: PIRA 0 10 20 30 40 50 60 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Bcm 2002-2006 Avg 2007
Slide 15: European Gas Storage Inventory
15 307 73% 143 72% 196 64% 101 67% 204 66% 241 65% European Gas Storage Inventory - Bcf Inventory as of Jan 14, 2008 Source: GSE 1/14/08
Slide 16: Europe Heating Degree Days
16 Europe Heating Degree Days Colder than normal temperatures in Spain and France are offset by warmer UK temps Cumulative Heating Degree Days 0 200 400 600 800 1000 1200 1400 10/30/2007 11/5/2007 11/11/2007 11/17/2007 11/23/2007 11/29/2007 12/5/2007 12/11/2007 12/17/2007 12/23/2007 12/29/2007 1/4/2
Slide 17: Pipeline Capacity Increasing in Europe
17 Pipeline Capacity Increasing in Europe Transatlantic LNG Deep and liquid market with large storage and summer peak demand will balance global LNG supply Pipeline gas supply into Europe will compete to push LNG to higher value markets (Gp:) New Pipeline (Gp:) Existing Pipeline (Gp:) Expansion
Slide 18: More LNG is Becoming Flexible
18 1.5 1.5 1.5 1.5 1.8 1.8 1.8 1.6 0.5 0.5 0.5 0.5 2.0 2.0 2.0 2.0 0.4 0.4 0.4 0.4 1.3 2.3 4.9 0.2 0.2 0.2 0.3 9.2 11.7 7.9 6.6 - 2 4 6 8 10 12 2007 2008 2009 2010 Bcf/d Nigeria Yemen Qatar Oman Abu Dhabi Trinidad Norway Eq. Guinea Egypt Algeria More LNG is Becoming Flexible Flexible LNG to the Atla
Slide 19: Flexibility, Optionality, Profitability
19 Flexibility, Optionality, Profitability Atlantic Basin Market Position (Gp:) Sabine Pass LNG Terminal (Gp:) Cheniere Marketing Office (Gp:) USGC LNG Supply Route (Gp:) LNG Diversion Route
Slide 20: Worldwide Liquefaction Capacity
20 Worldwide Liquefaction Capacity Source: GIIGNL; Poten, Cheniere Research 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2007 2004 2005 2006 Bcf/d
Slide 21: Worldwide Liquefaction Capacity - Growth
21 Worldwide Liquefaction Capacity - Growth - 5 10 15 20 25 30 35 40 45 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2004 2005 2006 2007 2008 2009 2010 Bcf/d Source: Cheniere Research + 10 Bcf/d
Slide 22: 2010 Annual Balance
22 2010 Annual Balance - Bcf/d Global Liquefaction Capacity 36 Estimated LNG Delivery 90% 32 Asian Consumption 16 European Consumption 6 Remaining for North America 10 Source: Cheniere Research
Slide 23: Cheniere Marketing Strategy
23 1 Bcf/d by 2010 86% of Henry Hub 94% - 65 cents (GdF transaction) Seek to capture portion of redirect rights Cheniere Marketing Strategy Term Contracts: Indexed Purchase Agreements (IPA) Spot Market: 1 Bcf/d portion Seek to capture arbitrage value of HH vs NBP Note: The above outlines the current
Slide 24: Cheniere Growth Strategy
24 Cheniere Growth Strategy Continue asset development: terminals and pipelines Develop a balanced supply portfolio for Cheniere Marketing between long-term IPA’s and exposure to the spot, option and short-term markets to optimize seasonality Pursue acquisitions for Cheniere Energy Partners, L.P. (A
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