Cheniere Energy, Inc. · NYSE:LNG

Cheniere Energy — Investor Presentation (September 2011)

36 slides from Cheniere Energy's investor presentation, Sep 23, 2011

  1. Slide 1: Cheniere Energy October 2011

    Cheniere Energy : :October 2011 : : : : : :

  2. 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 of : :1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended”. All statements, other than statements

  3. Slide 3: Overview

    CHENIERE ENERGY : :Overview : : : :

  4. Slide 4: U.S. Gas Consumption vs. Production

    4 : :U.S. Gas Consumption vs. Production : :Source: EIA historical, September 2011 Short-Term Energy Outlook (2011 data) : :Hot Summer & : :Cold Winter : : Since 2005 U.S. production growth ~ 4.9 Tcf vs. demand growth ~ 2.6 Tcf : : Net imports declined ~1.6 Tcf (-50%) over the period : : ~ 1 Tcf

  5. Slide 5: U.S. Proved Non-Producing Reserves

    5 : :U.S. Proved Non-Producing Reserves : :Source: EIA, US Crude Oil, Natural Gas and Natural Gas Liquids Proved Reserves, 2009 : : Non-producing proved U.S. gas reserves +100% since 2003 to 98 Tcf : : Equivalent to 13 Bcf/d of LNG exports for 20+ years : : Over 3,000 gas wells drilled but not ho

  6. Slide 6: Emerging shale plays erase oil and gas drilling distinction

    6 : : Emerging shale plays erase “oil” and “gas” drilling distinction : : Horizontal drilling +750% since 2005; pace of rig construction determines : :market capacity : :U.S. Horizontal Rigs : :Source: Baker Hughes : :HZ Rigs : :Barnett Shale HZ : :Drilling Expands : :- : :200 : :400 : :600 : :800

  7. Slide 7: Oil Production Drives Investment Decisions for Gas

    7 : :Oil Production Drives Investment Decisions for Gas : :Bcf/d MMB/d : :Source: Advanced Resource Intl; Cheniere Research : : Expected liquids production from shale plays > 3 million bpd by 2020 : : Associated natural gas > 7 Bcf/d of “costless” supply : :0 : :1 : :2 : :3 : :4 : :5 : :6 : :7 : :

  8. Slide 8: Venting and Flaring

    8 : :Venting and Flaring : : The U.S. vented and flared 165 Bcf of natural gas in 2009 : : North Dakota’s share amounted to 27 Bcf; +156% increase from 2007 : : There are many “New Bakkens” emerging in liquids-rich shale plays : :(Eagle Ford, Niobrara, Permian, Granite Wash) : :Source: EIA : :0 :

  9. Slide 9: U.S. Natural Gas Resources

    9 : :U.S. Natural Gas Resources : :(Tcf) : :Source: DOE, Annual Energy Outlook 2009-2011 : :2008 2009 2010 2011 : : Other Shale : :  U.S. reserves increased by 86% in last 3 years to 2,543 Tcf : : Represents 100+ years of natural gas resources : :1,365 : :1,747 : :2,119 : :2,543 : : : :

  10. Slide 10: Global Petroleum Demand – Stationary Sources

    10 : :Global Petroleum Demand – Stationary Sources : :Asia : :6.9 MM b/d : :~41 Bcf/d : :Europe : :2.9 MM b/d : :~17 Bcf/d : :Mid East : :2.8 MM b/d : :~17 Bcf/d : :Latin America : :2.3 MM b/d : :~14 Bcf/d : :FSU : :0.9 MM b/d : :~5 Bcf/d : :Africa : :1.2 MM b/d : :~7 Bcf/d : :US & Canada : :2.2 MM

  11. Slide 11: Attractive Oil Linked Market Prices

    11 : :Attractive Oil Linked Market Prices : :~ 12% – 15% : :of Oil Prices : :Source: PIRA, Platts : :$3.85 : :$9.51 : :$14.97 : :$12.45 : :Regional Natural Gas & LNG Prices : :0 : :6 : :12 : :18 : :Ja : : n : : -0 : : 4 : : : :M : : a : : r- : : 0 : : 4 : : : :M : : a : : y- : : 0 : : 4 : : : :J : :

  12. Slide 12: Proposed Liquefaction Project will Transform Sabine into Bi-directional Facility

    12 : :Proposed Liquefaction Project will Transform Sabine : :into Bi-directional Import / Export Facility : :Current Facility : : 853 acres in Cameron Parish, LA : : 40 ft ship channel 3.7 miles from coast : : 2 berths; 4 dedicated tugs : : 5 LNG storage tanks (17 Bcf of storage) : : 4.3 Bcf/d

  13. Slide 13: Summary Proposed Structure

    13 : :Summary Proposed Structure : :Sabine Pass LNG, L.P. : : : : : : : : : :86.8% through LP Interest : :2% through GP Interest : :NYSE Amex US : :Stock Symbol: LNG : :NYSE Amex US : :Stock Symbol: CQP : :11.2% LP Interest : :Public Unitholders : :Sabine Pass : :Liquefaction, LLC : :Vaporization as

  14. Slide 14: Estimated Financial Impact - Liquefaction Project

    14 : :Estimated Financial Impact - Liquefaction Project : :(Annualized) : :Contracted : :Capacity : :Fees (1) : :Liquefaction Project Economics : :Impact to CQP Impact to LNG : :Current $253mm  Stable common unit distributions : : ~1 x coverage supported by 20 year : :fixed price contracts with AA

  15. Slide 15: Sabine Pass LNG: Liquefaction Project

    CHENIERE ENERGY : :Sabine Pass LNG: Liquefaction Project : : : :

  16. Slide 16: Strategic Focus: Liquefaction Expansion Project

    16 : :Strategic Focus: Liquefaction Expansion Project : : Cheniere is developing a project to add liquefaction trains, transforming the : :Sabine Pass LNG facility into the first bi-directional LNG terminal that can : :import & export LNG : :– Proposing up to 4 liquefaction trains, 16 mtpa total no

  17. Slide 17: Estimated Terms of LNG SPA Contracts

    17 : : Fixed Fee: $2.00/MMBtu - $3.00/MMBtu : : Annual contract volumes are take-or-pay : : Cheniere procures natural gas, liquefies it and loads LNG onto the : :customer’s LNG vessel : :115% of NYMEX Henry Hub : : 15% charge above Henry Hub predominantly to account for : :liquefaction process

  18. Slide 18: Brownfield Development, Lower Expected Capital Costs

    18 : :0 : : 500 : : 1000 : : 1500 : : 2000 : : Go : : rgo : : n : : Gla : : dst : : on : : e : : Cu : : rtis : : An : : gol : : a : : Sh : : no : : vit : : Sak : : hal : : in : : Qa : : tar : : gas : : Nig : : eria : : Ra : : sG : : as : : EL : : NG : : T1 : : Om : : an : : AL : : NG : : T1 : : AL :

  19. Slide 19: Engineering, Procurement & Construction Contract

    19 : :Engineering, Procurement & Construction Contract : : : : Cheniere has engaged Bechtel Corporation (“Bechtel”) to complete front end : :engineering and design (“FEED”) work and negotiate a fixed price, lump-sum, : :turnkey EPC contract for the liquefaction project and interconnection with Sabi

  20. Slide 20: LNG Regulatory Process Update and Project Support

    20 : : : : : :• Base site permitted : :• NEPA pre-filing 7/2010 for expansion : :• Some agencies already in agreement : :• Formal application filed 1/31/2011 : :• FERC coordinates process and will receive : :concurrence for final EA : :• Estimated approval early 2012 : : : : : : : : : :LNG Regula

  21. Slide 21: Expected Timeline

    21 : :Expected Timeline : : DOE export authorization Received : : Definitive commercial agreements 2H2011 : : EPC contract 2H2011 : : Financing commitments 2H2011 : : FERC construction authorization 2012 : : Commence construction 2012 : : Commence operations 2015 : :Milestone Target Date : :N

  22. Slide 22: LNG Fundamentals

    CHENIERE ENERGY : :LNG Fundamentals : : : :

  23. Slide 23: New Liquefaction Projects Inadequate to Meet Demand Growth

    23 : :New Liquefaction Projects Inadequate to Meet : :Demand Growth : :Source: CERA, Cheniere research : :Existing Liquefaction 37 Bcf/d : :Under Construction 7 Bcf/d : :Proposed 2020 15 Bcf/d : :Estimated 2015 44 Bcf/d : :44 Bcf/d of nameplate capacity by 2015 = ~37 Bcf/d of : :production (assuming

  24. Slide 24: Firm Liquefaction Capacity Additions

    24 : :Q4 Q1 Q1 Q1 Q1 Q1 Q2 Q2 Q1 Q2 Q3 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q3 Q4 Q1 Q3 Q4 : :Firm Liquefaction Capacity Additions : :Source: Cheniere Research : :- : :0.5 : :1.0 : :1.5 : :2.0 : :2.5 : :3.0 : :Bcf/d : :Middle East Gulf : :Asia Pacific : :Atlantic Basin : :Nameplate Liquefaction Capac

  25. Slide 25: Market Call for LNG

    25 : :Market Call for LNG : :(Bcf/d) : : Average 2010 LNG demand of 30 Bcf/d at 10-year historical compound average : :growth rate of 7% per year equates to ~42 Bcf/d of demand in 2015 : : Next wave of LNG supply expected to come from Australian and U.S. LNG : :projects : :17.8 : : 8.6 : : 1.8 1.3

  26. Slide 26: Financial

    CHENIERE ENERGY : :Financial : : : :

  27. Slide 27: Organization Structure and Existing Debt

    27 : :11.2% LP Interest : :Organization Structure and Existing Debt : :Cheniere Energy : :Investments, LLC : :100% Ownership Interest : : : :100% Ownership Interest : :Cheniere LNG Holdings, LLC : : : : : : : :$205 mm 2.25% Convertible Senior Unsecured Notes due August 2012 : : : :$550 mm 7.25% Seni

  28. Slide 28: Estimated CQP Distributable Cash Flows

    28 : :$ : :$ : : $ 0 – 250 : :Estimated CQP Distributable Cash Flows : :Annualized estimates pre-Liquefaction Project : :Receipts : : TUAs – Chevron and Total : : Other Services : :Total Cash Receipts : :Note: Estimates represent a summary of internal forecasts, are based on current assumptions an

  29. Slide 29: CQP Ownership

    29 : :CQP Ownership : :Common Units : :Subordinated Units : :General Partner @ 2% : :19.0 12.0 : :135.4 : :3.4 : :Public : :Cheniere : :Energy, Inc. : :19.0 150.8 : :(in mm) : :31.0 : :135.4 : :3.4 : :169.8 : :Total : :88.8% 11.2% 100% Percent of total : :* CQP Ownership as of June 30, 2011 and prof

  30. Slide 30: Condensed Balance Sheets

    30 : :Condensed Balance Sheets : :As of June 30, 2011 : :Cheniere Energy Other Cheniere Consolidated : :Partners, L.P. Energy, Inc. (1) Cheniere Energy, Inc. (3) : :Unrestricted cash and equivalents $ - 163 $ 163 $ : :Restricted cash and securities (2) 151 4 155 : :Property, plant and equipment, net

  31. Slide 31: Appendix

    CHENIERE ENERGY : :Appendix : : : :

  32. Slide 32: Cheniere Operations

    32 : :Cheniere Operations : : Cheniere is engaged in the development, construction and operation of : :LNG terminals and pipelines and marketing of LNG and natural gas : :– Sabine Pass LNG became operational in 2008 and cost ~$1.6B, : : send-out capacity is 4.0 Bcf/d, storage capacity is 16.9 Bcfe

  33. Slide 33: Contracted Capacity at SPLNG

    33 : :Contracted Capacity at SPLNG : : : : : :Fully contracted capacity under long-term terminal use agreements* : :Total Gas & Power N.A. Chevron USA Cheniere Energy Investments : :Capacity 1.0 Bcf/d 1.0 Bcf/d 2.0 Bcf/d : :Fees (1) : :Reservation Fee : :(2) : :$0.28/MMBTU $0.28/MMBTU $0.28/MMBTU :

  34. Slide 34: Strategically Located – Extensive Market Access to Gas

    34 : :Strategically Located – : :Extensive Market Access to Gas : :Montana : :Thrust : :Belt : :Cody : :Gammon : :Hilliard : : Baxter- : : Mancos : :Greater : :Green : :River : :Basin : :Forest : :City Basin : :Pierre : :Illinois : :Basin : :Piceance : :Basin : :Lewis : :San Juan : :Basin : :Raton :

  35. Slide 35: North America Onshore Receiving Terminals

    35 : :Everett : :Cove Point : :Elba Island : : Lake Charles : : Sabine Pass : : Freeport : :Golden Pass : :Cameron : :Costa Azúl : :Canaport : :Altamira : :Source: Websites of Terminal Owners : :Terminal : :Capacity Holder : :Baseload : :Sendout : :(MMcf/d) : :Canaport 1,000 : :Repsol : :Everett - S

  36. Slide 36: Cheniere Energy Contacts

    : : : : : :Cheniere Energy : :Contacts : :Katie Pipkin, Vice President Finance & Investor Relations : :(713) 375-5110 – katie.pipkin@cheniere.com : :Christina Burke, Manager Investor Relations : :(713) 375-5104 – christina.burke@cheniere.com : : : :CHENIERE ENERGY : : : :

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