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CORPORATE PRESENTATION – Cheniere Energy, Inc.

Cheniere Energy, Inc. · Nov 10, 2009 · 31 slides

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Slides

  1. CORPORATE PRESENTATION – Cheniere Energy, Inc. – slide 1
    CHENIERE ENERGY Cheniere Energy Corporate Presentation November 2009
  2. CORPORATE PRESENTATION – Cheniere Energy, Inc. – slide 2
    Cheniere Business Segments Cheniere Cheniere Energy Energy Terminals Terminals Pipelines Pipelines Marketing Marketing Sabine Pass LNG (SPLNG) (90.6%) Creole Trail P/L (100%) 2.0 Bcf/d SPLNG TUA Freeport LNG (30%) Approved…
  3. CORPORATE PRESENTATION – Cheniere Energy, Inc. – slide 3
    Freeport LNG Development, L.P. Cheniere Energy, Inc. 30% April 2009 Sold Terminal Use Capacity Estimated Annual Agreement (TUA) (Bcf/d) Distribution to Cheniere* Conoco 0.90 Dow 0.50 15MM Mitsubishi 0.15 *Quarterly cash…
  4. CORPORATE PRESENTATION – Cheniere Energy, Inc. – slide 4
    Sabine Pass LNG Cheniere Energy, Inc. 90.6% Aerial view of Sabine Pass LNG August 2009 Vaporization 4.3 Bcf/d peak send-out Storage 5 tanks x 160,000 cm (16.9 Bcfe) Berthing / Unloading Two docks LNG carriers up to 266,000 cm…
  5. CORPORATE PRESENTATION – Cheniere Energy, Inc. – slide 5
    Creole Trail Pipeline Cheniere Energy, Inc. 100% Provides optimal market access for LNG from the Sabine Pass terminal First 94 miles complete and in-service, additional 58 miles permitted Size: 2.0 Bcf/d Diameter: 42-inch…
  6. CORPORATE PRESENTATION – Cheniere Energy, Inc. – slide 6
    Strategic Focus Commercial - monetize 2 Bcf/d regas capacity at Sabine Pass receiving terminal held by Cheniere Marketing International LNG marketing efforts Seek long-term TUAs, LNG purchase/sale agreements Purchase spot cargoes…
  7. CORPORATE PRESENTATION – Cheniere Energy, Inc. – slide 7
    Estimated Future Cash Flows Cheniere Energy, Inc. ( in MM) Annualized* Receipts Freeport investment 10-20 Distributions from CQP 254 Management fees from CQP 19 Disbursements Cheniere Marketing TUA Sabine Pass 252 G&A 30-40…
  8. CORPORATE PRESENTATION – Cheniere Energy, Inc. – slide 8
    Estimated Future Cash Flows Cheniere Energy Partners ( in MM) Annualized* Receipts TUA Customers 503 Disbursements Operating Expenses 34 Management Fees 19 Debt Service 165 Available Cash 285 Distributions to Unitholders…
  9. CORPORATE PRESENTATION – Cheniere Energy, Inc. – slide 9
    Current Global Issues for LNG and Natural Gas The world has abundant reserves of natural gas, but will they be produced The current global gas oversupply is expected to last at least 2 to 4 years The growth of LNG production capacity…
  10. CORPORATE PRESENTATION – Cheniere Energy, Inc. – slide 10
    Global Prices & Linkage Implications Convergence of spot prices Disconnect from crude US/MMBtu US/Barrel 25 150 US Henry Hub UK NBP 20 120 Asia Spot LNG Avg JCC 15 Brent Crude 90 10 60 5 30 JCC = Japanese Crude…
  11. CORPORATE PRESENTATION – Cheniere Energy, Inc. – slide 11
    Global Natural Gas Supply & Demand Rapid reserve and demand growth TCF Global Proved Gas Reserves Since 1980 Trillion Cubic Feet World Gas Demand: +94% 7,000 Bcf/d World Gas Demand World Gas Reserves:+140% 300 6,000 200 281…
  12. CORPORATE PRESENTATION – Cheniere Energy, Inc. – slide 12
    Global Potential for Unconventional Gas Production is Huge [Ultimately recoverable remaining resources of] Non- conventional gas resources including coalbed methane, tight gas sands and gas shales are much larger, amounting perhaps to…
  13. CORPORATE PRESENTATION – Cheniere Energy, Inc. – slide 13
    Liquefaction Capacity Growing Sharply Liquefaction Capacity 45 40 35 30 25 Bcf/d 20 15 10 5 0 2001H 2002H 2003H 2004H 2005H 2006H 2007H 2008H 2009F 2010F 2011F 2012F 2013F…
  14. CORPORATE PRESENTATION – Cheniere Energy, Inc. – slide 14
    Expected Incremental Capacity Liquefaction Capacity Additions by Region Bcf/d 3.0 Middle East Gulf Asia Pacific 2.5 Atlantic Basin 2.0 1.5 1.0 0.5 - 09Q1 09Q2 09Q3 09Q4 10Q1 10Q2 10Q3 10Q4 11Q1…
  15. CORPORATE PRESENTATION – Cheniere Energy, Inc. – slide 15
    Russia and U.S. Account for Nearly 40% of Natural Gas Production Natural Gas Producers by Country 70 23.7% 60 20.3% 50 16.9% Percent of Total 40 13.5% Bcf/d 30 10.1% 20 6.7% 10 3.3% 0 -0.1% Russia UK…
  16. CORPORATE PRESENTATION – Cheniere Energy, Inc. – slide 16
    How Will Current Market Conjuncture Affect the Evolution of these Pricing Mechanisms Regulation Bilateral Social/Political Regulation Cost Netback from Monopoly 9% of Service Final Product 8% 3% 1% No Price 1% Regulation…
  17. CORPORATE PRESENTATION – Cheniere Energy, Inc. – slide 17
    Asia Pacific* Natural Gas Demand Projection Regional Regional Demand Demand by by Country Country (2007) (2007) Consumption Pipeline Import 2007 = 27 Bcf/d Capacity 2010 = 32 Bcf/d Eventually Large LNG Import Capacity…
  18. CORPORATE PRESENTATION – Cheniere Energy, Inc. – slide 18
    New Asia Pipelines Major projects boost access to indigenous reserves Russia Siberia Turkmenistan- 1,600 Tcf 1,500+ Tcf China Pipeline Proved Unexplored +3 Bcf/d Potential CBM New Asia Pipes Bcf/d Throughput Capacity Central…
  19. CORPORATE PRESENTATION – Cheniere Energy, Inc. – slide 19
    European Suppliers are Undertaking a Significant Expansion of Pipeline Capacity Large and Growing Piped Gas Supply Existing Pipeline New Pipeline Consumption: 50 Bcf/d in 2008 Expansion Pipeline import capacity: 40 Bcf/d Indigenous…
  20. CORPORATE PRESENTATION – Cheniere Energy, Inc. – slide 20
    Projected LNG Flows in 2010 Global LNG Supply of 30 Bcf/d Existing Liquefaction Under Construction Proposed Liquefaction 2010 Liquefaction Capacity 2010 Consumption Europe Europe 5-7 5-7 Bcf/d Bcf/d Asia Asia Pacific…
  21. CORPORATE PRESENTATION – Cheniere Energy, Inc. – slide 21
    North America Critical role of US in global gas market Questions: Can the US absorb the LNG Will LNG become a part of the US energy mix What are the implications for oil & gas linkage in the US & globally 22
  22. CORPORATE PRESENTATION – Cheniere Energy, Inc. – slide 22
    US Unconventional Production Basins Proximate to Premium Markets and Major Pipelines Lower 48 UNC Technically Recoverable Reserves (Tcf) 800 580 Shale 600 Tcf CBM 366 Tcf Tight Gas 400 200 0 US Proved 1996 2006…
  23. CORPORATE PRESENTATION – Cheniere Energy, Inc. – slide 23
    US Gas Rig Count, Production & Prices Drilling has Collapsed with Price, Oversupply Active Rigs US Gas Rig Count & Henry Hub Price HH Cash 1800 16 1491 1600 14 1466 1372 12 Rigs -58% 1400 Annual average from 08 Peak 1186…
  24. CORPORATE PRESENTATION – Cheniere Energy, Inc. – slide 24
    Lower 48 Wellhead Production & Gas Rig Count Productive Capacity will Fall Sharply as Drilling is Curtailed Bcf/d Active Rigs Bcf/d US Prod from YE 08 60 1700 YE 09 YE 10 YE 11 Lower 48 Dry Gas 0 56 1500 -2.8 Production -0.2…
  25. CORPORATE PRESENTATION – Cheniere Energy, Inc. – slide 25
    Conclusions North America is about to join the global gas market Unconventional reserves and the growth of the LNG trade are challenging the conventional business models Questions: Can the oil linked model survive Which gas price…
  26. CORPORATE PRESENTATION – Cheniere Energy, Inc. – slide 26
    Appendix
  27. CORPORATE PRESENTATION – Cheniere Energy, Inc. – slide 27
    Organizational Structure NYSE Amex US: LNG 205 mm 2.25% Convertible Senior Unsecured Notes due 2012 100% Ownership Interest Cheniere LNG Holdings, LLC 400 mm 9.75% Term Loan due 2012 283 mm 12.0% Convertible Senior Secured…
  28. CORPORATE PRESENTATION – Cheniere Energy, Inc. – slide 28
    Expected Cash Flows Between LNG and CQP/Sabine ( in mm) FY Cash Received by Cheniere Distributions paid from CQP (1.70) (1) General Partner Units (3.3mm) 5.6 Subordinated Units (135.4mm) 230.2 Common Units (10.9mm) 18.5 254.3…
  29. CORPORATE PRESENTATION – Cheniere Energy, Inc. – slide 29
    Condensed Balance Sheet September 30, 2009 (in millions) Cheniere Energy Other Cheniere Consolidated Partners, L.P. Energy, Inc. (1) Cheniere Energy, Inc. (3) Unrestricted cash -- 87 87 Restricted cash and securities (2) 259 7…
  30. CORPORATE PRESENTATION – Cheniere Energy, Inc. – slide 30
    Contracted Capacity TUAs Summary of 20-year Terminal Use Agreements Total LNG Chevron USA Cheniere Marketing Capacity 1.0 Bcf/d 1.0 Bcf/d 2.0 Bcf/d Fees (1) (2) Reservation Fee 0.28/MMBTU 0.28/MMBTU 0.28/MMBTU (3) Opex Fee…
  31. CORPORATE PRESENTATION – Cheniere Energy, Inc. – slide 31
    Historical LNG Imports by Region (Bcf/d) OECD Piped Imports from Norway, Netherlands, European LNG Imports 40 Algeria, Russia 10 8 30 6 20 4 10 2 0 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun…

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