Transcript Australia, Qatar and the US will be the Largest Producers

The United States in the Global LNG Revolution
Kiev, 16-17 May 2013
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 and Section 21E of the Securities Exchange Act of 1933, as amended. All statements, other than statements of historical facts,
included herein are “forward-looking statements.” Included among “forward-looking statements” are, among other things:
 Statements that we expect to commence or complete construction of a liquefaction facility by certain dates, or at all;
 Statements that we expect to receive authorization from the Federal Energy Regulatory Commission, or FERC, or the Department of Energy, or
DOE to construct and operate a proposed liquefaction facility by a certain date, or at all;
 Statements regarding future levels of domestic or foreign natural gas production and consumption, or the future level of LNG imports into North
America or exports from the U.S., or regarding projected future capacity of liquefaction or regasification facilities worldwide;
 Statements regarding any financing transactions or arrangements, whether on the part of Cheniere or at the project level;
 Statements regarding any commercial arrangements marketed or potential arrangements to be performed in the future, including any cash
distributions and revenues anticipated to be received;
 Statements regarding the commercial terms and potential revenues from activities described in this presentation;
 Statements that our proposed liquefaction facility, when completed, will have certain characteristics, including a number of trains;
 Statements regarding our business strategy, our business plan or any other plans, forecasts, examples, models, forecasts or objectives: any or all of
which are subject to change;
 Statements regarding estimated corporate overhead expenses; and
 Any other statements that relate to non-historical information.
These forward-looking statements are often identified by the use of terms and phrases such as “achieve,” “anticipate,” “believe,” “estimate,”
“example,” “expect,” “forecast,” “opportunities,” “plan,” “potential,” “project,” “propose,” “subject to,” and similar terms and phrases. Although we
believe that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and
these expectations may prove to be incorrect. You should not place undue reliance on these forward-looking statements, which speak only as of the
date of this presentation. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety
of factors, including those discussed in “Risk Factors” in the Cheniere Energy, Inc. and Cheniere Energy Partners, L.P. Current Reports on Form 8-K filed
with the Securities and Exchange Commission, which are incorporated by reference into this presentation. All forward-looking statements attributable
to us or persons acting on our behalf are expressly qualified in their entirety by these ”Risk Factors”. These forward-looking statements are made as of
the date of this presentation, and we undertake no obligation to publicly update or revise any forward-looking statements.
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LNG Demand to Nearly Double by 2025
• The market is short at least 11 Bcf/d of supply by 2025
• LNG from the U.S. ideally timed to alleviate shortage
• Asia continues to propel the LNG market
LNG Demand by Region vs Supply
70
60
50
Bcf/d
South America
40
South & East Africa
North America
30
North Africa
Middle East
20
Europe
Asia
10
Supply Excluding US
0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Source: Woodmac; Excludes US proposed LNG
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Australia, Qatar and the US will be the Largest Producers of LNG
in 2020
mtpa
Liquefaction Capacity Per Country
600
Existing and Under
Construction Projects
(FID Taken)
Papua New Guinea
US East
Angola
Peru
500
Yemen
Russia East
Equatorial Guinea
400
Norway
Australia
Qatar
Trinidad & Tobago
300
Nigeria
Malaysia
Indonesia
200
Brunei
Egypt
United Arab
Emirates
Oman
100
Algeria
Proposed
Projects
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Source: Wood Mackenzie
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Firm Liquefaction Capacity Additions
Diversity of supply sources practically non existent in the coming years
Bcf/d
3.0
Middle East Gulf
2.5
Asia Pacific
Gorgon T1 & Gassi Touil
Atlantic Basin
Papua New Guinea
2.0
Gorgon T2 & Curtis T1
Qatargas T7
Gorgon T3 &
Curtis T2
1.5
Wheatstone
T1 Pluto
Gladstone T1
Angola LNG
1.0
Gladstone T2
Skikda
Prelude
Australia
Pacific T2*
0.5
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2011
Source: Cheniere Research
5
2012
*FID pending
2013
2014
2015
2016
2017
U.S. Natural Gas Markets
US Gas Consumptions vs. Production
Tcf
26
24
22.0
23.3
23.1
22.9
24.1
21.7
25.5
20.2
20.6
16
40
US Gas Production
US Gas Consumption
12
2006
2007
2008
2009
2010
49
51
2003
2004
0
2011
2005
2006
2007
2008
2009
2010
2012E
Source: EIA 2012 Natural Gas Annual.
Source: EIA, US Crude Oil, Natural Gas and Natural Gas Liquids Proved Reserves, 2010.
US Natural Gas Resources
Productive Capacity from Unconventional Reservoirs
Bcf/d
67
60
20
10
2005
85
78
60
18.5
14
98
80
21.3
19.3
18.1
113
100
22.9
20
Tcf
120
24.1
22
18
24.4
US Proved Non-Producing Reserves
Includes Eagle Ford, Barnett Combo, Bakken, Permian, Anadarko,
W. Marcellus, Utica, Cotton Valley, Piceance & Uinta
MMB/d
Tcf
• U.S. resources increased by 75% since 2006
• Represents over 100 years of supply at current demand
3000
2,689
2500
2000
1500
2,081
2,203
1,532
1000
500
0
2006
2008
Shale
Source: Advanced Resource Intl; Cheniere Research.
2010
2012
Other
Source: Potential Gas Committee, 2013; EIA, Natural Gas Proved Reserves, 2010
 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 – benefitting U.S. economy,
creating jobs and reducing balance of trade
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Shale Gas – A Growth Story
Output from the six major shale plays
grew more than 7 fold from 2007 to
2012, according to LCI. That accounts
for about 35% of current US production.
LCI projects US shale production to
reach 35 Bcf/d by 2016.
Tcf
EIA projects that share to increase,
choking out imports and reducing
conventional onshore and offshore
volumes.
US Shale Production (MMcf/d)
Barnett
2007
2008
2009
2010
2011
2012
7
3,029
4,423
4,909
5,148
5,645
5,897
Woodford Fayetteville Haynesville Eagleford Marcellus Total
220
544
877
1,080
1,156
1,169
230
726
1,399
2,107
2,567
2,798
75
162
1,064
4,040
6,963
7,792
4
6
51
316
1,116
1,620
0
62
244
1,501
3,265
5,075
3,559
5,923
8,544
14,192
20,712
24,351
Source: LCI Energy Insight
Compelling Price Advantage …
Current Prices = ~$2B-$3B of Spread for Each Bcf/d
Worldwide Gas Prices = 11% to 15% of Crude Oil
Estimated Prices
$/MMBtu
Henry Hub: $4.00 / MMBtu
Brent Crude: $100 / Barrel
Regional Natural Gas & LNG Prices
As of March 31, 2013
20
18
($/MMBtu)
Americas
Europe
Asia
16
Henry Hub
$ 4.00
$ 4.00
$ 4.00
14
Liquefaction
4.00
4.00
4.00
12
$15.85
$10.48
10
Shipping
0.75
1.25
3.00
Fuel/Basis
0.60
0.60
0.60
Delivered Cost
$ 9.35
$ 9.85
$11.60
$10.30
8
6
$3.44
4
2
Margin
NBP
Japan avg LNG
… as well as Diversification of Price Risk and Supply Sources
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Source: Cheniere Research estimates
IFERC HH Monthly
European Gas Contract
Mar-13
$ 3.40
Mar-12
$ 2.15
Mar-11
$ 5.65
0
Mar-10
@ 15%
15.00
Mar-09
@ 12%
12.00
Mar-08
Regional Price
@ 15%
15.00
Sabine Pass Liquefaction Project Update
Trains 1-2 Under Construction; Trains 3-4 EPC Contract Signed
Trains nameplate capacity is expected to be ~4.5 mmtpa each
Current Facility
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~1,000 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
Liquefaction Trains 1 & 2
 Fully permitted and financed
 LSTK EPC contract w/ Bechtel
 Overall construction 22% complete (2/13)
 Operations estimated 2015-2016
Liquefaction Trains 3 & 4
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LSTK EPC contract w/ Bechtel
Fully permitted, financing expected 2Q 2013
Construction estimated to start 2013
Operations estimated 2016-2017
Liquefaction Expansion - Trains 5 & 6
 Bechtel commenced preliminary engineering
 Permitting initiated February 2013 with formal
application expected to be filed with FERC in 2H
2013
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Sabine Pass Liquefaction – Stage 1 Construction
Timeline & Milestones
Target Date
Sabine Pass
T3-4
T1-2
T5-6
Milestone
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TBD
2H13
2H14
2H13
1H13
1H15
1H14
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2H14
1H14
2013
1H15
1H14
2015/16 2016/17 2018
2017
 Initiate permitting process (FERC & DOE)
 Commercial agreements
 EPC contract
 Financing commitments
 Regulatory approvals
 Commence construction
 Commence operations (1)
(1) Each Train to commence operations approximately six to nine months after the previous train.
Note: See “Forward Looking Statements” slide.
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Corpus
Christi
US Considerations on LNG Exports
 Benefits to the Economy:
- Job Creation: ~ 50, 000 jobs every 2 Bcf/d of LNG Exports
- Increase in US households’ real income thanks to export
revenues
- Balance of Trade: $15-25 billion for 6 Bcf/d of LNG Exports
 Monetisation of stranded gas associated with shale and tight oil
production
 Key for national energy security and offers a new geopolitical
leverage to the US soft power
 Reinforcement of the US’ support for free trade (WTO)