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January 2019 Corporate Presentation – Tellurian Inc.

Tellurian Inc. · Jan 7, 2019 · 38 slides

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Slides

  1. January 2019 Corporate Presentation – Tellurian Inc. – slide 1
    Corporate presentation January 2019
  2. January 2019 Corporate Presentation – Tellurian Inc. – slide 2
    Introduction 3 Introduction
  3. January 2019 Corporate Presentation – Tellurian Inc. – slide 3
    Tellurian is capturing LNG value Strong global fundamentals call for 100 mtpa of additional U.S. LNG Tellurian developing 30 billion of assets to generate 8 cash flow per share annually Guaranteed EPC with Bechtel…
  4. January 2019 Corporate Presentation – Tellurian Inc. – slide 4
    New LNG capacity call: 100-250 mtpa mtpa Global LNG supply outlook 800 Capacity required(1) 9.6% p.a. growth rate 700 250 mtpa 600 10%(2) 500 5%(3) 100 mtpa 400 Under construction 300 200 In operation 100 0 2015 2016…
  5. January 2019 Corporate Presentation – Tellurian Inc. – slide 5
    2018 LNG hub price 10/mmBtu = JKM /mmBtu 20 2018 LNG market 18 presents opportunity for 16 8 billion of annual 14 EBITDA for Driftwood(1) 12 10 JKM 8 6 4 Henry Hub 2 TELL gas production 0 cost: J A J O J A J O J A J O J A…
  6. January 2019 Corporate Presentation – Tellurian Inc. – slide 6
    Tellurian projects annual 8 cash flow/sh(1) Integrated model Production Company, Pipeline Partners Network, LNG Terminal (8 billion in equity) Variable and operating costs expected to be 3.00/mmBtu FOB 60% Equity ownership 40%…
  7. January 2019 Corporate Presentation – Tellurian Inc. – slide 7
    Bechtel LSTK secures project execution Driftwood EPC contract costs ( per tonne) 700 Leading LNG EPC contractor 550 44 LNG trains delivered to 18 customers 490 500 in 9 countries 380 30% of global LNG liquefaction capacity (125…
  8. January 2019 Corporate Presentation – Tellurian Inc. – slide 8
    Tellurian and Vitol sign JKM-indexed MOU Summary of MOU agreement JKM liquidity is increasing(1) Tellurian to supply Vitol with 1.5 mtpa for Cleared JKM swaps on an LNG equivalent basis(2) a minimum of 15 years on an FOB basis…
  9. January 2019 Corporate Presentation – Tellurian Inc. – slide 9
    Final Investment Decision expected 1H 2019 Milestone Target date Fully-wrapped EPC contract November 2017 Draft FERC EIS September 2018 Final FERC EIS January 2019 Final FERC Order 1H 2019 Final Investment Decision 1H 2019…
  10. January 2019 Corporate Presentation – Tellurian Inc. – slide 10
    Tellurian differentiated to provide value Experienced World-class Fixed-cost EPC Regulatory Unique business management partners contract certainty model Management Guaranteed FERC Integrated track record at lump sum scheduling…
  11. January 2019 Corporate Presentation – Tellurian Inc. – slide 11
    Contact us Amit Marwaha Social media Director, Investor Relations & Finance +1 832 485 2004 TellurianLNG amit.marwahatellurianinc.com Joi Lecznar SVP, Public Affairs & Communication +1 832 962 4044…
  12. January 2019 Corporate Presentation – Tellurian Inc. – slide 12
    Project details 13 Project details
  13. January 2019 Corporate Presentation – Tellurian Inc. – slide 13
    Integrated to manage three risks Basin Basis Construction 10,800 Haynesville acres 7 billion of pipeline projects, 15 billion liquefaction 1.4 Tcf of resource providing access to Haynesville, project in Louisiana Intend to…
  14. January 2019 Corporate Presentation – Tellurian Inc. – slide 14
    Driftwood LNG terminal Driftwood LNG terminal Land 1,000 acres near Lake Charles, LA Capacity 27.6 mtpa Up to 20 trains of 1.38 mtpa each Trains Chart heat exchangers GE LM6000 PF+ compressors 3 storage tanks Storage 235,000…
  15. January 2019 Corporate Presentation – Tellurian Inc. – slide 15
    Pipeline network Bringing low-cost gas to Southwest Louisiana 1 Driftwood Pipeline(1) Capacity (Bcf/d) 4.0 Cost ( billions) 2.2 Length (miles) 96 Diameter (inches) 48 Compression (HP) 274,000 2 Status FERC approval pending 2…
  16. January 2019 Corporate Presentation – Tellurian Inc. – slide 16
    100 Tcf available resources in Haynesville Driftwood Holdings plans to fund and purchase 15 Tcf Potential Target size: acquisition targets: Range of resources per target (Tcf)(1): Large 15 Tcf 15 Medium 9 to 15 Tcf 9 15…
  17. January 2019 Corporate Presentation – Tellurian Inc. – slide 17
    Expecting to eliminate HH price risk Opportunities for further gas supply cost savings: Henry Hub gas price (price index for most U.S LNG projects) Buy Henry Hub gas when prices are lower /mmBtu than 2.25 (curtail Haynesville…
  18. January 2019 Corporate Presentation – Tellurian Inc. – slide 18
    Driftwood Holdings financing Full Development Capacity (mtpa) 27.6 Capital investment ( billions) Liquefaction terminal(1) 15.2 Owners cost & contingency(2) 1.9 Driftwood pipeline(3) 2.2 HGAP 1.4 PGAP 3.7 Upstream 2.2 Fees(4)…
  19. January 2019 Corporate Presentation – Tellurian Inc. – slide 19
    Driftwood Holdings operating costs /mmBtu 1.50 0.75 0.22 4.50 0.79 3.00 0.36 2.25 0.88 Drilling & Operating Gathering, Contingency Delivered Liquefaction Total variable Debt (3) FOB (1) completion processing & &…
  20. January 2019 Corporate Presentation – Tellurian Inc. – slide 20
    Margins and price signals Netback prices to the Gulf Coast(1) 2018 JKM forward strip up 2.46 since November 2017 /mmBtu /mmBtu 20 12 Avg. Cal 2018 JKM +25% Dec 2018 GCM(2) 11 since Nov-17 15 20 December 2018: Dec-18 6.42/mmBtu…
  21. January 2019 Corporate Presentation – Tellurian Inc. – slide 21
    Returns to Driftwood Holdings partners U.S. Gulf Coast netback price (/mmBtu) 6.00 8.00 10.00 15.00 Driftwood LNG, FOB U.S. Gulf Coast (4.50) (4.50) (4.50) (4.50) (/mmBtu) Margin (/mmBtu) 1.50 3.50 5.50 10.50 Annual partner cash…
  22. January 2019 Corporate Presentation – Tellurian Inc. – slide 22
    Value to Tellurian Inc. 2 Plants 5 Plants USGC Annual cash Cash flow Annual cash Cash flow netback Margin(1) flows(2) per share(3) flows(2) per share(3) (/mmBtu) (/mmBtu) ( millions) (/share) (/millions) (/share) 6.00 1.50 235 0.95…
  23. January 2019 Corporate Presentation – Tellurian Inc. – slide 23
    Additional detail 24 Additional detail
  24. January 2019 Corporate Presentation – Tellurian Inc. – slide 24
    Global commodity requires low-cost solutions 967 LNG Storage - 2018 Japan + Korea terminals: 697 Bcf Bcf of LNG 821 LNG vessels: 821 Bcf storage of LNG 609 517 vessels 2018 2020 of 18 cargoes loaded 15 per day 2018…
  25. January 2019 Corporate Presentation – Tellurian Inc. – slide 25
    Owning pipeline infrastructure mitigates basis risk Tolling model SPA model Equity model Customer incurs risk Developer incurs risk Own the infrastructure Competition between customers Developer consolidates pipeline True cost…
  26. January 2019 Corporate Presentation – Tellurian Inc. – slide 26
    Building a low-cost global gas business April February December Feb/March June Management, Merge with Raise Announce Raise friends and Magellan approximately open seasons approximately family invest Petroleum, 100 million in for…
  27. January 2019 Corporate Presentation – Tellurian Inc. – slide 27
    Funding and ownership Sources (1) ( millions) Ownership(1)(2) (%) Bechtel Mgmt, investment, family and ATM Free Float Total 50 friends, 60 program, 38% 19% GE 10 investment, 25 576 million 241 million shares Total C.…
  28. January 2019 Corporate Presentation – Tellurian Inc. – slide 28
    Driftwood vs. competitors cost per tonne Capacity, mtpa 27.6 31.2 10.0 16.5 14.0 9.0 15.6 9.0 8.9 5,025 4,144 3,774 (2) 2,657 2,214 (1) 1,603 1,654 1,270 1,428 Driftwood Qatar New Mozambique Yamal LNG Canada APLNG…
  29. January 2019 Corporate Presentation – Tellurian Inc. – slide 29
    Integrated model prevalent internationally Projects include: Americas Europe Mideast/Africa Australasia IOC Atlantic LNG, Snohvit, Yamal Angola LNG, EG LNG, APLNG, Darwin, Peru LNG, LNG LNG Damietta, ELNG, Yemen GLNG, Gorgon,…
  30. January 2019 Corporate Presentation – Tellurian Inc. – slide 30
    Site characteristics determine long-run costs Access to pipeline infrastructure Access to power and water Support from local communities Site size over 1,000 acres Insulated from surge, wind, and local populations Berth…
  31. January 2019 Corporate Presentation – Tellurian Inc. – slide 31
    Key terms of EPC agreements with Bechtel 700 per tonne 550 490 500 380 Phase 1 Phase 2 Phase 3 Phase 4 Total Capacity 11.0 5.5 5.5 5.5 27.6 Trains 8 4 4 4 20 Storage facilities 2 0 1 0 3 Berths 1 1 1 0 3 32…
  32. January 2019 Corporate Presentation – Tellurian Inc. – slide 32
    Construction budget breakdown (1) Owners' costs Equipment and materials 12% 24% Contingency and provisional 24% sums (2) 17% Direct labor 24% Overhead (mostly labor) Notes: Based on Driftwood LNG full development. (1)…
  33. January 2019 Corporate Presentation – Tellurian Inc. – slide 33
    Driftwood Holdings financing 2-Plant Case 3-Plant Case Full Development Capacity (mtpa) 11.0 16.6 27.6 Capital investment ( billions) Liquefaction terminal(1) 7.6 10.3 15.2 Owners cost & contingency(2) 1.1 1.5 1.9 Driftwood…
  34. January 2019 Corporate Presentation – Tellurian Inc. – slide 34
    Corpus Christi LNG and Driftwood LNG examples Corpus Christi LNG Driftwood LNG ( billions) T1-2 T3 T1-3 Plants 1-3 Capacity (mtpa) 9.0 4.5 13.5 16.6 EPC 7.8 2.4 10.2 10.3 Pipeline 0.4 0.0 0.4 1.5(1) Owners cost, contingency &…
  35. January 2019 Corporate Presentation – Tellurian Inc. – slide 35
    LNG projects require supply optionality Bcf/d Dry natural gas production by basin, July 2018 year-to-date 30 26.6 25 10 mtpa plant with 1.5 bcf/d feedgas requirement 20 stresses basin supply 15 10 8.3 8.2 5.2 5 3.2 2.8 2.2…
  36. January 2019 Corporate Presentation – Tellurian Inc. – slide 36
    Production Company strategy Objectives Current assets(1) Acquire and develop long-life, low-cost natural Tellurian has 10,800 net acres in the Haynesville shale gas resources Primarily located in De Soto and Red River parishes Low…
  37. January 2019 Corporate Presentation – Tellurian Inc. – slide 37
    U.S. natural gas needs global market access 13 Bcf/d of incremental production; associated gas at risk of flaring without infrastructure investment LNG liquefaction terminal Operating/under construction Future Required future…
  38. January 2019 Corporate Presentation – Tellurian Inc. – slide 38
    PGAP connects constrained gas to SWLA Takeaway constraints in the Permian Southwest Louisiana demand Bcf/d Texas Louisiana 16 Eunice, LA 14 Permian Gillis, LA production 12 Southwest Louisiana firm demand(1)(2) 10 (bcf/d) 12…

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