Cheniere Energy, Inc. · NYSE:LNG

Cheniere Energy — Investor Presentation (January 2014)

40 slides from Cheniere Energy's investor presentation, January 2014

  1. Slide 1: Cheniere Energy

    Cheniere Energy January 2014

  2. Slide 2: Forward Looking Statements

    Forward Looking Statements 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, oth

  3. Slide 3: Summary Pro Forma Organizational Structure

    Summary Pro Forma Organizational Structure Cheniere Energy, Inc. (NYSE: LNG) 84.5% Interest(1) 100% Interest 100% Interest 100% Interest Cheniere Energy Partners Cheniere Corpus Christi Public Cheniere Energy 15.5% (1) LP Holdings, LLC Marketing, LLC Liquefaction, LLC Partners GP, LLC (NYSE: CQH) (“

  4. Slide 4: Projected Global LNG Demand Growth

    Projected Global LNG Demand Growth Regional LNG Import Outlook (mtpa) Europe 60 98 28 2015 2020 2030 Asia 377 Americas 256 200 20 16 19 2015 2020 2030 2015 2020 2030 Middle East/N. Africa 6 10 38 2015 2020 2030 Global demand is forecast to grow from 236 mtpa (~32 Bcf/d) in 2012 to 532 mtpa (~71 Bcf/

  5. Slide 5: Pricing for Global LNG Buyers

    Cheniere’s LNG Export Facilities Offer Attractive Pricing for Global LNG Buyers Worldwide LNG Prices = 11% to 15% of Crude Oil Regional Natural Gas & LNG Prices as of $/MMBtu Example Prices January 2014 20 Henry Hub: $4.00 / MMBtu Brent Crude: $100 / Barrel 18 16 $15.73 ($/MMBtu) Americas Europe Asi

  6. Slide 6: Brownfield LNG Export Project: Sabine Pass Liquefaction

    Brownfield LNG Export Project: Sabine Pass Liquefaction Utilizes Existing Assets, Trains 1-4 Fully Contracted, Under Construction Design production capacity is expected to be ~4.5 mtpa per train, using ConocoPhillips’ Optimized Cascade® Process Current Facility  ~1,000 acres in Cameron Parish, LA 

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

    LNG Sale and Purchase Agreements (SPAs) ~20 mtpa “take-or-pay” style commercial agreements ~$2.9B annual fixed fee revenue for 20 years BG Gulf Coast LNG Gas Natural Fenosa Korea Gas Corporation GAIL (India) Limited Total Gas & Power N.A. (6) Centrica plc (6) Annual Contract 286,500,000 (1) 182,500,

  8. Slide 8: SPL Construction Completion Schedules Trains 1-4

    SPL 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 Record Fi

  9. Slide 9: Aerial View of SPL Construction Progress – November 2013

    Aerial View of SPL Construction Progress – November 2013 Train 1 Cold Box Area Compressor Area Propane Condenser Area Air Coolers Train 3 Compressor Area Train 2 Air Coolers Cold Box Area Propane Condenser Area Train 4 9

  10. Slide 10: Corpus Christi Liquefaction Project

    Corpus Christi Liquefaction Project Design production capacity is expected to be ~4.5 mtpa per train Proposed 3 Train Facility HoustonNew Orleans  >1,000 acres owned and/or controlled  2 berths, 3 LNG storage tanks (~10.1 Bcfe of storage) Corpus Christi Gulf of Mexico  ConocoPhillips’ Optimized C

  11. Slide 11: Corpus Christi Liquefaction SPAs

    Corpus Christi Liquefaction SPAs First “take-or-pay” style commercial agreement for Corpus Christi signed in December 2013 with PT Pertamina PT Pertamina (Persero) Annual Contract Quantity (TBtu) 39.68 Annual Fixed Fees (1) ~$139 MM Fixed Fees $/MMBtu (1) $3.50 LNG Cost 115% of HH Term of Contract (

  12. Slide 12: Corpus Christi Liquefaction, LLC

    Corpus Christi Liquefaction, LLC Competitive With Other Recent Liquefaction Projects  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) Cost: $/ton 2,000 Operating trains – Con

  13. Slide 13: Regulatory Approvals – Corpus Christi and SPL Trains 5-6

    Regulatory Approvals – Corpus Christi and SPL Trains 5-6 DOE export approvals and FERC construction and operation approvals needed for Corpus Christi Liquefaction Trains 1-3 and Sabine Pass Liquefaction Trains 5&6  Corpus Christi Trains 1-3: Filed FERC and DOE applications • Completed and filed FER

  14. Slide 14: FERC Applications Filed for Liquefaction Projects

    FERC Applications Filed for Liquefaction Projects LNG Export Projects Pre-filing Date Application Date FERC Scheduling Rec’d Approval Notice Issued Sabine Pass Liquefaction T1-4 July 26, 2010 Jan. 31, 2011  Corpus Christi Liquefaction Dec. 13, 2011 Aug. 31, 2012 Freeport LNG Dec. 23, 2010 Aug. 31,

  15. Slide 15: U.S. DOE Applications for LNG Exports

    U.S. DOE Applications for LNG Exports* ** Application filed = , FERC scheduling notice issued =  Date Applicant Received Expected Order to FERC Approval to Begin Date Non FTA Received be Processed (1) Company Pre-Filing Process Quantity (Bcf/d) Conditional (2) Final FERC** Contracts Cheniere Sabin

  16. Slide 16: 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 maxim

  17. Slide 17: Example Annual Cash Flow on CMI SPA

    Example Annual Cash Flow on CMI SPA ($ in millions unless noted) LNG sold 104 Bcf/year Net profit (after LNG costs, shipping) (per MMBtu) $10 Net profit $1,040 Paid to Sabine Pass Liquefaction(1) ($250) CQP Remaining at CMI $790 Distributable to CEI based on CQP GP and CQH interest $180 Total cash f

  18. Slide 18: Timeline & Milestones

    Timeline & Milestones Target Date SPL Corpus SPL Milestone T1-2 T3-4 Christi T5-6  Initiate permitting process (FERC & DOE)      Commercial agreements T1: 0.8mtpa T5:   2014 T6:2014  EPC contract    2015  Financing commitments   2014 2015  Regulatory approvals   2014 2015  Issue

  19. Slide 19: Financial Estimates

    Financial Estimates (includes SPL Trains 1-4 and Trains 1-6)

  20. Slide 20: CQP: SPLNG (Regas) Estimated Cash Flows

    CQP: SPLNG (Regas) Estimated Cash Flows Annualized ($ in millions) Trains 1-4 Trains 1-6 Total $ 127 $ 127 Chevron 133 133 SPL 290 305 Other 10 15 Total Revenues 560 580 Total Expenses (65) (75) EBITDA (1) $ 495 $ 505 Interest Expense (2) (130) (130) SPLNG Distributable cash flow to CQP $ 365 $ 375

  21. Slide 21: CQP: SPL Estimated Cash Flows

    CQP: SPL Estimated Cash Flows Expect > 3X EBITDA: Debt Service Coverage And < 5X Debt: EBITDA ($ in millions) Trains 1-4 Trains 1-6 Trains 1-4 (BG, Gas Natural, KOGAS, GAIL) $ 2,285 $ 2,285 Total - 315 Centrica - 275 Train 6 Customer (1) - 685 CMI (2) 145 175 Commodity payments, net (3) 245 350 Tota

  22. Slide 22: CQP Forecasted Distributable Cash Flows

    CQP Forecasted Distributable Cash Flows Trains 1-4 Trains 1-6 ($ in millions) SPLNG distributable cash flow $ 365 $ 375 SPL distributable cash flow 1,435 2,205 CTPL distributable cash flow 30 30 CQP expenses (15) (15) Estimated total distributable cash flow $ 1,815 $ 2,595 Estimated distributable ca

  23. Slide 23: Visible Future Growth

    CQP Outlook Visible Future Growth Expected LNG Export Volumes (SPL) CQP Expected Revenues Tbtu/yr $MM $4,000 $3,875 1,600 Cheniere Marketing Cheniere Marketing 1,328 T6 $3,010 Train 6 1,200 $3,000 T5 1,046 Train 5 T1-4 $2,328 795 800 Trains 1-4 $2,000 Regas $1,048 400 333 $1,000 $255 $256 - - 0 $0 2

  24. Slide 24: Cheniere Estimated Steady State Cash Flows

    Cheniere Estimated Steady State Cash Flows ($ in millions) Annualized Cheniere Energy, Inc. Trains 1-4 Trains 1-6 CQP GP Interest $ 370 $ 760 CQH Retained Interest (1) 620 790 Management fees 50 50 CEI expenses and other (85) (85) Net Cash Flows $ 955 $ 1,515 Potential CF generated from CMI SPA (2)

  25. Slide 25: Cheniere's Debt Summary

    Cheniere’s Debt Summary As of December 2013 ($ in millions) No Debt Cheniere Energy, Inc. (NYSE: LNG) Cheniere Energy Corpus Christi CQP GP Cheniere Marketing, No Debt Partners LP Holdings, LLC Liquefaction, LLC (& IDRs) LLC (NYSE: CQH) Cheniere Energy Partners, L.P. (NYSE: CQP) Sabine Pass LNG, L.P

  26. Slide 26: Appendix

    CHENIERE == Appendix

  27. Slide 27: Operating Assets

    Operating Assets Sabine Pass LNG Terminal Creole Trail Pipeline 27

  28. Slide 28: Third Party Terminal Use Agreements (TUAs)

    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 (

  29. Slide 29: LSTK EPC Contract with Bechtel

    LSTK EPC Contract with Bechtel Minimize Construction Costs and Risks Bechtel was the EPC contractor for the regasification project at the Why Bechtel? Pass LNG terminal, which was constructed on time and on budget Proven construction contractor • Founded in 1898 and headquarted in San Francisco • Re

  30. Slide 30: Creole Trail Pipeline

    Creole Trail Pipeline  In May 2013, Cheniere Partners acquired CTPL from Cheniere Energy, Inc. for $480MM, and following the sale CTPL secured a $400 million senior secured term loan facility  CTPL is fully contracted with expected annual revenue of ~$80MM expected to commence with Train 1 operati

  31. Slide 31: 2012 Global LNG Supply & Demand

    2012 Global LNG Supply & Demand LNG Importers - Price Indexation 2012 Global LNG Capacity: ~37.3 Bcf/d Oil Products Alge ria - 2.7 2012 Global LNG Demand: ~31.5 Bcf/d Natural Gas Norway - 0.6 Japan Crude Cocktail Eg ypt - 1.6 Qatar – 9.3 USA - 0.2 Russia - 1.3 22 6.5 Europe Asia 1.4 North America Ma

  32. Slide 32: U.S. Natural Gas Markets

    U.S. Natural Gas Markets US Gas Consumptions vs. Production US Proved Non-Producing Reserves Tcf Tcf 30 25.8 24.5 25.5 23.1 23.3 24.1 120 22.0 22.9 25 21.7 118 24.4 100 113 24.1 20 22.9 98 20.6 21.3 80 19.3 20.2 85 15 18.1 18.5 78 60 67 60 10 40 US Gas Production 5 US Gas Consumption 20 0 0 2005 200

  33. Slide 33: Strategically Located – Extensive Market Access to Gas

    Strategically Located – Extensive Market Access to Gas Primary Gas Sources for Sabine Pass and Corpus Christi Liquefaction Conventional Gulf Coast Onshore: Barnett, Haynesville, Bossier, Eagle Ford, Fayetteville, Permian Basin, Anadarko Basin Montana Thrust Bakken Belt Cody Williston Basin Gammon Hi

  34. Slide 34: Multiple Local Pipeline Interconnections Provide Several Options for Access to Natural Gas Supply

    Multiple Local Pipeline Interconnections Provide Several Options for Access to Natural Gas Supply Cheniere Creole Trail Pipeline Trunkline Kinder Morgan Louisiana Pipeline NGPL Texas to Louisiana (bi-directional) Pine Prairie Transco Energy Center Pine Prairie TETCO Texas Gas Transco Z3 Tennessee FG

  35. Slide 35: Firm Liquefaction Capacity Additions (Bcf/d)

    Firm Liquefaction Capacity Additions (Bcf/d) Nameplate Liquefaction Capacity ~ 39 Bcf/d as of YE 2013 ~ 53 Bcf/d by YE 2019 Bcf/d 3.00 SPL T2, Gorgon T2, Petronas FLNG 2.75 Asia Pacific Atlantic Basin APLNG T2 2.50 Gladstone T1 Gorgon T3, Wheatstone T1, Gladstone T2 2.25 SPL T1, Gorgon T1, APLNG T1

  36. Slide 36: Conversion of Class B and Subordinated Units

    Conversion of Class B and Subordinated Units Class B 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 r

  37. Slide 37: Pro Forma CQP Ownership

    Pro Forma CQP Ownership (in millions) CEI CQH(3)(4) Blackstone Public Total Common units (1) 12.0 45.1 57.1 Class B units (1) 45.3 100.0 145.3 Subordinated units (1) 135.4 135.4 General Partner @ 2% 6.9 6.9 6.9 192.7 100.0 45.1 344.7 Percent of total (as of 12/31/13) 2% 55.9% 29.0% 13.1% 100.0% Pro

  38. Slide 38: Proforma Condensed Balance Sheets

    Proforma Condensed Balance Sheets (in millions) As of September 30, 2013 Pro Forma CQH IPO Consolidated Consolidated Cheniere Energy Other Cheniere Cheniere Cheniere Energy Other Cheniere Cheniere Partners, L.P. Energy, Inc. (1) Energy, Inc. (2) Partners, L.P. Energy, Inc. (1) Energy, Inc. (2) Cash

  39. Slide 39: Slide 39

  40. Slide 40: Investor Relations Contacts

    Investor Relations Contacts Randy Bhatia: Director, Finance and Investor Relations – (713) 375-5479, [email protected] Christina Burke: Manager, Investor Relations – (713) 375-5104, [email protected]

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