Cheniere Energy, Inc. · NYSE:LNG

Cheniere Energy — Investor Presentation (September 2013)

39 slides from Cheniere Energy's investor presentation, Sep 11, 2013

  1. Slide 1: Cheniere Energy September 2013

    Cheniere Energy September 2013

  2. Slide 2: Forward Looking Statements

    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, o

  3. Slide 3: Organizational Structure and Summary of Next Developments

    2.0% Interest & Incentive Dist. Rights Cheniere Energy, Inc. (NYSE MKT: LNG) Sabine Pass LNG, L.P. (“SPLNG”) Sabine Pass Liquefaction, LLC (“SPL”) Cheniere Energy Partners, L.P. (NYSE MKT: CQP) Cheniere Creole Trail Pipeline, L.P. (“CTPL”) Corpus Christi Liquefaction, LLC Cheniere Marketing, LLC (“C

  4. Slide 4: Projected Global LNG Demand Growth

    Projected Global LNG Demand Growth Regional LNG Import Outlook (mtpa)* Source: Facts Global Energy 18 20 19 2015 2020 2030 2015 2020 2030 6 14 30 2015 2020 2030 2015 2020 2030 Americas Europe Asia Middle East *Base-case scenario 192 242 310 87 123 152 From 303 mtpa (~40 Bcf/d) in 2015 to 511 mtpa (~

  5. Slide 5: Regional Natural Gas & LNG Prices

    0 2 4 6 8 10 12 14 16 18 20 A u g- 0 9 A u g- 1 0 A u g- 1 1 A u g- 1 2 A u g- 1 3 $/MMBtu Regional Natural Gas & LNG Prices As of August 12, 2013 NBP IFERC HH Monthly Japan Avg LNG European Gas Contract Estimated Prices Henry Hub: $4.00 / MMBtu Brent Crude: $100 / Barrel ($/MMBtu) Americas Europe A

  6. Slide 6: Brownfield LNG Export Project Utilizes Existing Assets

    Brownfield LNG Export Project Utilizes Existing Assets Trains 1-4 Fully Contracted, Under Construction Significant infrastructure in place including storage, marine and pipeline interconnection facilities; pipeline quality natural gas to be sourced from U.S. pipeline network Liquefaction Trains 3 &

  7. Slide 7: LNG Sale and Purchase Agreements (SPAs)

    LNG Sale and Purchase Agreements (SPAs) (1) BG has agreed to purchase 182,500,000 MMBtu, 36,500,000 MMBtu, 34,000,000 MMBtu and 33,500,000 MMBtu of LNG volumes annually upon the commencement of operations of Trains 1, 2, 3 and 4, respectively. Total has agreed to purchase 91,250,000 MMBtu of LNG vol

  8. Slide 8: Aerial View of SPL Construction – June 2013

    Aerial View of SPL Construction – June 2013 8 Train 1 Train 2 Compressor Area T1 Air Coolers Cold Box Foundations Compressor Area T2 Propane Condenser Foundations

  9. Slide 9: Aerial View of SPL Construction – August 2013

    Aerial View of SPL Construction – August 2013 9

  10. Slide 10: Corpus Christi Liquefaction Project

    Corpus Christi Liquefaction Project Proposed 3 Train Facility  >1,000 acres owned and/or controlled  2 berths, 3 LNG storage tanks (~10.1 Bcfe of storage)  ConocoPhillips’ Optimized Cascade® Process Key Project Attributes  Marine environment conducive to large tankers • 45 ft ship channel 13.7 m

  11. Slide 11: Competitive With Other Recent Greenfield Liquefaction Projects

    - 500 1,000 1,500 2,000 * * * *  Range of liquefaction project costs: $200 - $2,000+ per ton  1 Bcf/d of capacity = $1.5B to $15.0B+  Corpus Christi liquefaction project estimated costs are ~$800/ton (1) Corpus Christi Liquefaction, LLC Competitive With Other Recent Greenfield Liquefaction Projec

  12. Slide 12: Regulatory Approvals

    Regulatory Approvals LNG Export Projects  Corpus Christi Trains 1-3: Filed FERC and DOE applications • Completed and filed FERC application in 8/2012 (NEPA pre-filing process initiated in 8/2011) − Corpus Christi is one of six liquefaction projects to have filed a FERC application • Filed for FTA a

  13. Slide 13: FERC Applications Filed for Liquefaction Projects

    FERC Applications Filed for Liquefaction Projects 13 Note: National Environmental Policy Act (NEPA) empowers FERC as the lead Federal agency to prepare an Environmental Impact Statement in cooperation with other state and federal agencies LNG Export Projects Pre-filing Date Application Date FERC Sch

  14. Slide 14: U.S. DOE Applications for LNG Exports

    Source: Office of Oil and Gas Global Security and Supply, Office of Fossil Energy, U.S. Department of Energy; U.S. Federal Energy Regulatory Commission; Company releases U.S. DOE Applications for LNG Exports* ** Application filed = v, FERC scheduling notice issued =  14 Expected Order to be Process

  15. Slide 15: CMI SPA – Excess Volumes from Trains 1-4 at SPL

    CMI SPA – Excess Volumes from Trains 1-4 at SPL  CMI-SPL SPA provides CMI with up to 2 mtpa of LNG delivered FOB Sabine Pass starting with the initial production from Train 1 •Maximum Annual Contract Quantity of up to 104 TBtu/year from first four Trains  SPA sharing mechanic incents profit maximi

  16. Slide 16: Example Annual Cash Flow on CMI SPA

    Example Annual Cash Flow on CMI SPA (1) Net margins based on profitability of cargoes, up to $3.00/MMBtu paid to SPL on 36 Bcf of LNG sold in a year (Tranche 1); 20% of net margins paid to SPL on the remaining 68 Bcf of LNG sold in the year (Tranche 2) LNG sold 104 Bcf/year Net profit (after LNG cos

  17. Slide 17: Timeline & Milestones

    Timeline & Milestones  Initiate permitting process (FERC & DOE)  Commercial agreements  EPC contract  Financing commitments  Regulatory approvals  Issue Notice to Proceed  Commence operations (1) Milestone Corpus Christi (1) Each Train of the respective projects is expected to commence operat

  18. Slide 18: Financial Estimates (includes SPL Trains 1-4)

    Financial Estimates (includes SPL Trains 1-4)

  19. Slide 19: SPLNG Estimated Cash Flows

    SPLNG Estimated Cash Flows (With Trains 1 – 4 Operational) Total Revenues Total Expenses Total Chevron SPL Other EBITDA (1) 127 133 290 10 560 (65) $ 495 $ Distributable cash flow to CQP $ 365 ($ in millions) Debt Service (2) (130) Annualized (1) EBITDA is a non-GAAP measure. EBITDA is computed as t

  20. Slide 20: SPL Estimated Cash Flows Trains 1-4

    SPL Estimated Cash Flows Trains 1-4 Total Revenues BG Gas Natural KOGAS GAIL Total Centrica Commodity payments, net (1) O&M, gas procurement & other SPLNG/Total TUA Pipeline Costs EBITDA (2) 725 455 550 550 - - 275 2,555 (285) (320) (160) (765) $ 1,790 $ ($ in millions) Total Expenses (1) Assumes $6

  21. Slide 21: CQP Estimated Distributable Cash Flows Trains 1-4

    CQP Estimated Distributable Cash Flows Trains 1-4 Total distributable cash flow by units (1) General partner Cheniere common units Public and BX common units Net cash flow per unit (1) 295 690 690 $ 3.00 $ Total distributable cash flow $ 1,675 ($ in millions) SPLNG distributable cash flow SPL distri

  22. Slide 22: Cheniere Estimated Steady State Cash Flows

    Cheniere Estimated Steady State Cash Flows (With Trains 1 – 4) ($ in millions) Net Cash Flows Cheniere Energy, Inc. Distributions from CQP Management fees CEI expenses and other 985 50 (85) 950 $ $ plus: Est. CF generated at CEI from CMI SPA (1) $0 - $1,000 (1) CMI is entitled to recover all operati

  23. Slide 23: Summary Organizational Structure

    Summary Organizational Structure Cheniere Energy, Inc. (NYSE MKT: LNG) Cheniere Energy Partners, L.P. (NYSE MKT: CQP) Sabine Pass LNG, L.P. (SPLNG)  58% Cheniere Energy, Inc. (1)  29% Blackstone (1)  13% Public (1) BG SPA (286.5 million MMBtu / yr) Gas Natural SPA (182.5 million MMBtu / yr) KOGAS

  24. Slide 24: Appendix

    CHENIERE = Appendix

  25. Slide 25: Operating Assets: Sabine Pass LNG Terminal and Creole Trail Pipeline

    Operating Assets Sabine Pass LNG Terminal Creole Trail Pipeline 25

  26. Slide 26: Contracted Capacity at SPLNG

    Contracted Capacity at SPLNG Third Party Terminal Use Agreements (TUAs) Long-term, 20 year “take-or-pay” style commercial contracts ~$253MM annual fixed fee revenue Total Gas & Power N.A. Chevron U.S.A. Inc. Capacity 1.0 Bcf/d 1.0 Bcf/d Fees (1) Reservation Fee (2) $0.28/MMBTU $0.28/MMBTU Opex Fee (

  27. Slide 27: Construction Completion Schedules Trains 1-4

    2012 2013 2014 2015 2016 2017 2018 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 Guaranteed Accelerated Guaranteed Accelerated Early Engine

  28. Slide 28: Why Bechtel

    Why Bechtel  Constructed one-third of the world’s liquefaction facilities - more than any other contractor  Top US construction contractor for 15 straight years by Engineering News-Record  Bechtel was the EPC contractor for the regasification project at the Sabine Pass LNG Terminal, which was con

  29. Slide 29: Creole Trail Pipeline Expansion

    Current Facility Receipt capacity from SPLNG: 2.0 Bcf/d Diameter: 42-inch; Length: 94 miles Delivery Points: NGPL, Transco, TGPL, FGT, Bridgeline, Tetco, Trunkline No compression Pipeline Modifications Delivery capacity to SPLNG: 1.5 Bcf/d Receipt points: TETCO, Trunkline, Transco One new com

  30. Slide 30: 2012 Global LNG Supply & Demand

    2012 Global LNG Supply & Demand 2012 Global LNG Capacity: ~37.3 Bcf/d Natural Gas Oil Products LNG Importers - Price Indexation Japan Crude Cocktail 2012 Global LNG Demand: ~31.5 Bcf/d No r th Ame r ica S outh Ame r ica E u r ope A sia 6.5 1.4 1.1 22 A ust r alia - 3.3 B r unei - 1.0 Indonesia - 4.6

  31. Slide 31: U.S. Natural Gas Markets

    US Proved Non-Producing Reserves Productive Capacity from Unconventional Reservoirs Tcf Bcf/d MMB/d  Current market fundamentals in the U.S. – increased production, increased natural gas reserves and lackluster increase in natural gas demand – have created an opportunity to expand into exports – be

  32. Slide 32: Primary Gas Sources for Sabine Pass Liquefaction

    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 Basin Anadarko Basin PaloDuro Basin Permian Basin Barnett Woodford Pearsall Eagle Ford Rio Grande Embayment Barnett Woodford Michigan Ba

  33. Slide 33: Multiple Local Pipeline Interconnections

    Multiple Local Pipeline Interconnections Provide Several Options for Access to Natural Gas Supply Targa Columbia Gulf Tennessee Cheniere Creole Trail Pipeline Trunkline Kinder Morgan Louisiana Pipeline NGPL Texas to Louisiana (bi-directional) Transco TETCO Tennessee FGT ) Existing Pipeline Grid Tran

  34. Slide 34: Projected Firm Liquefaction Capacity Additions

    Projected Firm Liquefaction Capacity Additions 0.00 0.25 0.50 0.75 1.00 1.25 1.50 1.75 2.00 2.25 2.50 2.75 3.00 13Q1 13Q2 13Q3 13Q4 14Q1 14Q2 14Q3 14Q4 15Q1 15Q2 15Q3 15Q4 16Q1 16Q2 16Q3 16Q4 17Q1 17Q2 17Q3 17Q4 18Q1 18Q2 18Q3 18Q4 2013 2014 2015 2016 2017 2018 Asia Pacific Atlantic Basin Bcf/d Skik

  35. Slide 35: Conversion of Class B and Subordinated Units

    Conversion of Class B and Subordinated Units  Mandatory conversion: within 90 days of the substantial completion of Train 3  Optional conversion by a Class B unitholder may occur at any of the following times: • After 83 months from issuance of EPC notice to proceed • Prior to the record date for

  36. Slide 36: Pro Forma CQP Ownership

    Pro Forma CQP Ownership  Current common unit annualized distribution expected to be $1.70/unit (2)  Class B units accrete 3.5% quarterly until converted into common units (1) Unit amounts are current units outstanding, including Blackstone’s total investment of $1.5B but excluding accretion of Cla

  37. Slide 37: Condensed Balance Sheets As of June 30, 2013

    Condensed Balance Sheets As of June 30, 2013 (1) Includes intercompany eliminations and reclassifications. (2) For complete balance sheets, see the Cheniere Energy, Inc., Cheniere Energy Partners, L.P and Sabine Pass LNG, L.P. Quarterly Report on Form 10-Q for the quarter ended June 30, 2013, filed

  38. Slide 38: Slide 38

  39. Slide 39: Investor Relations Contacts

    Nancy Bui: Director, Investor Relations – (713) 375-5280, nancy.bui@cheniere.com Christina Burke: Manager, Investor Relations – (713) 375-5104, christina.burke@cheniere.com Investor Relations Contacts:

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