Cheniere Energy Partners, Lp · NYSE:CQP

Cheniere Energy Partners, Lp — Investor Presentation (December 2011)

36 slides from Cheniere Energy Partners, Lp's investor presentation, Dec 5, 2011

  1. Slide 1: Cheniere Energy December 2011

    Cheniere Energy December 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 of his

  3. Slide 3: Cheniere

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

  4. Slide 4: Cheniere Expansion Project: Adding Liquefaction Capabilities at Sabine Pass LNG Terminal

    4 Cheniere Expansion Project: Adding Liquefaction Capabilities at Sabine Pass LNG Terminal  Proposed liquefaction project at the Sabine Pass LNG Terminal is being developed in phases, with two liquefaction trains per phase  Nominal capacity per train is ~ 4.5 million tonnes per annum (mtpa) –Contr

  5. Slide 5: LNG Export Service at Sabine Pass will Provide Opportunity to Arbitrage Henry Hub vs. Oil

    5 LNG Export Service at Sabine Pass will Provide Opportunity to Arbitrage Henry Hub vs. Oil Low High Henry Hub 4.00 $ 6.50 $ Capacity Charge 2.00 3.00 Shipping 1.00 1.00 Fuel/Basis 0.60 0.98 Delivered Cost 7.60 $ 11.48 $ Low High 4.00 $ 6.50 $ 2.00 3.00 2.80 2.80 0.60 0.98 9.40 $ 13.28 $ Europe Asia

  6. Slide 6: Global Petroleum Demand – Stationary Sources

    6 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 b/d ~13 Bcf/d • Global oil use totals 19 million b/d (~22%) in s

  7. Slide 7: Proposed Liquefaction Project: Brownfield Development Utilizing Existing Assets

    7 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 peak regasification capacity  5.3 Bcf/d of pipeline interconnection to the U.S. pipeline network Liquefaction Expansion 

  8. Slide 8: First Phase of the Project: Advancing Towards Making a Final Investment Decision

    8  DOE export authorization  Definitive commercial agreements  EPC contract  Financing commitments 4Q11/1Q12  FERC construction authorization 2012  Commence construction 2012  Commence operations (train 1/ train 2) 2015/2016 Milestone Target Date Note: Past results not a guarantee of future p

  9. Slide 9: Sale and Purchase Agreements (SPAs): Reached contract target for the first phase

    9 Sale and Purchase Agreements (SPAs): Reached contract target for the first phase of the project  Customers pay fixed fee based on annual contract quantity reserved plus 115% of applicable Henry Hub price for LNG delivered (total annual fixed revenues ~ $865MM)  Cheniere to procure nature gas, li

  10. Slide 10: Commercial Structure: Estimated Terms of Additional LNG SPA Contracts

    10  Fixed Fee: $3.00/MMBtu for trains 3 and 4  Fixed sales charge paid for annual contract quantity 115% of NYMEX Henry Hub  Contract sales price paid for LNG delivered  15% charge above Henry Hub predominantly to account for fuel consumed in liquefaction process and basis differential Commerci

  11. Slide 11: EPC Contract Signed for First Phase

    11 EPC Contract Signed for First Phase  Total project cost for two trains expected to be $4.5B to $5.0B before financing costs – EPC Contract cost is $3.9B, subject only to change orders – Bechtel has right to submit change orders if, among other things, Bechtel is adversely affected by a delay in

  12. Slide 12: ConocoPhillips-Bechtel – Global LNG Collaboration

    12 ConocoPhillips-Bechtel – Global LNG Collaboration Source: ConocoPhillips, Bechtel Note: Past results not a guarantee of future performance. Angola LNG not yet onstream. Not shown: Curtis LNG, Gladstone LNG, Australia Pacific LNG and Wheatstone LNG (all located in Australia) not yet onstream. Prov

  13. Slide 13: Regulatory Process Update

    13 • Base site permitted • NEPA pre-filing 7/2010 for expansion • Some agencies already in agreement • Formal application filed 1/31/2011 • Completion of FERC-coordinated process for EA • Estimated approval early 2012    • Filed two applications in 8/2010 & 9/2010 • Approval to export 2 Bcf/d for

  14. Slide 14: Proposed Financial Structure

    14 Summary Proposed Financial Structure Cheniere to initiate financial commitment process 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 Vaporizati

  15. Slide 15: Estimated Financial Impact - Liquefaction Project (Annualized)

    15 Estimated Financial Impact - Liquefaction Project (Annualized) Contracted Capacity Fees (1) Liquefaction Project Economics Impact to CQP(2) Impact to LNG(2) Current $253mm  Stable common unit distributions  ~1 x coverage supported by 20 year fixed price contracts with AA rated counterparties 

  16. Slide 16: Cheniere Energy Financial

    CHENIERE ENERGY Financial

  17. Slide 17: Organizational Structure

    17 Customer Annual SPA Pmt BG Gulf Coast LNG $411MM Gas Natural Fenosa $454MM Organizational Structure 11.2% LP Interest 100% Ownership Interest Cheniere Energy Partners, L.P. $205 mm 2.25% Convertible Senior Unsecured Notes due 2012 NYSE Amex US: LNG NYSE Amex US: CQP $298 mm 9.75% Term Loan due 20

  18. Slide 18: Estimated CQP Distributable Cash Flows

    18 $ $ Estimated CQP Distributable Cash Flows Annualized estimates pre-Liquefaction Project Receipts*  TUAs – Chevron and Total  Other Services Total Cash Receipts *Estimates represent a summary of internal forecasts for 2011, are based on current assumptions and are subject to change. Actual perf

  19. Slide 19: CQP Ownership

    19 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 September 30, 2011. - -  Currently, CQP generates distributable cash flows (DC

  20. Slide 20: Estimated Cheniere Energy, Inc. Cash Receipts and Disbursements

    20 Disbursements  G&A, net marketing  Pipeline & tug services  Other, incl advance tax payments  Debt service Receipts  Distributions from CQP (Common/GP)  Distributions from CQP (Subordinated Units)  Management fees from CQP 45 - 55 *Estimates represent a summary of internal forecasts for 20

  21. Slide 21: Condensed Balance Sheets As of September 30, 2011

    21 Condensed Balance Sheets As of September 30, 2011 Cheniere Energy Other Cheniere Consolidated Partners, L.P. Energy, Inc. (1) Cheniere Energy, Inc. (2) Unrestricted cash and equivalents $ - 131 $ 131 $ Restricted cash and securities (3) 232 3 235 Property, plant and equipment, net 1,524 596 2,120

  22. Slide 22: Cheniere Energy U.S. Natural Gas Markets

    CHENIERE ENERGY U.S. Natural Gas Markets

  23. Slide 23: U.S. Natural Gas Consumption vs. Production

    23 U.S. Natural 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 production a

  24. Slide 24: U.S. Proved Non-Producing Reserves

    24 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 hooked up repres

  25. Slide 25: Horizontal Drilling Expands

    25  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 1,000 1,200 Jan- 91 Jan- 93 Jan- 95 J

  26. Slide 26: Oil Production Drives Investment Decisions for Gas

    26 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 b/d by 2020  Associated natural gas > 7 Bcf/d of “costless” supply 0 1 2 3 4 5 6 7 8 2010 2011E 2012E 2013E 2014E 2015E 2020

  27. Slide 27: Venting and Flaring

    27 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 “New Bakkens” emerging in liquids-rich shale plays (Eagle Ford, Niobrara, Permian, Granite Wash) Source: EIA 0 20 40 60 80 100 120 140 16

  28. Slide 28: U.S. Natural Gas Resources (Tcf)

    28 U.S. Natural Gas Resources (Tcf) Source: DOE, Annual Energy Outlook 2009-2011 2008 2009 2010 2011 Other Shale  Estimated 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

  29. Slide 29: Cheniere Energy LNG Fundamentals

    CHENIERE ENERGY LNG Fundamentals

  30. Slide 30: Global LNG Market

    30 Global LNG Market A sia E u r o p e South America 2010 Total Global LNG Liquefaction Capacity ~37 Bcf/d N o r th A me r i c a 18 8.6 1.8 1.3 A ust r alia - 3.1 B r unei - 1.0 Indonesia - 4.6 M al a y sia - 3.0 A lge r ia - 2.7 N o r w a y - 0.6 Q a tar - 9.3 R ussia - 1.3 E g ypt - 1.6 Y emen - 1

  31. Slide 31: Firm Liquefaction Capacity Additions

    31 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 Capacity ~ 37 Bcf/d by YE 2010 ~ 44 Bcf/d by YE 20

  32. Slide 32: Market Call for LNG (Bcf/d)

    32 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 0.3 Asia Pacific Europe Nort

  33. Slide 33: Attractive Oil Linked Market Prices

    33 Attractive Oil Linked Market Prices ~ 12% – 15% of Oil Prices Source: PIRA, Platts $3.55 $8.71 $16.64 $12.21 Regional Natural Gas & LNG Prices $/MMBtu NBP IFERC HH Monthly Japan avg LNG European Gas Contract Spread between oil linked and U.S. natural gas prices ~ $9–$13/MMBtu 0 4 8 12 16 20 Ja n-

  34. Slide 34: Cheniere Energy Appendix

    CHENIERE ENERGY Appendix

  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 - Suez 700 Cove Point 1,800 BP, Statoil, Shell Elba Island 1,800 B

  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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