Cheniere Energy and The Coastal Bend

Transcription

1 Cheniere Energy and The Coastal Bend Jason French Director of Government and Public Affairs Aransas Pass Chamber of Commerce Luncheon January 13, 2015

2 Forward Looking Statements This presenta-on contains certain statements that are, or may be deemed to be, forward- looking statements within the meaning of Sec-on 27A of the Securi-es Act of 1933, as amended, and Sec-on 21E of the Securi-es Exchange Act of 1934, 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 regarding the ability of Cheniere Energy Partners, L.P. to pay distribu-ons to its unitholders or Cheniere Energy Partners LP Holdings, LLC to pay dividends to its shareholders; statements regarding Cheniere Energy Inc. s, Cheniere Energy Partners LP Holdings, LLC s or Cheniere Energy Partners, L.P. s expected receipt of cash distribu-ons from their respec-ve subsidiaries; statements that Cheniere Energy Partners, L.P. expects to commence or complete construc-on of its proposed liquefac-on facili-es, or any expansions thereof, by certain dates or at all; statements that Cheniere Energy, Inc. expects to commence or complete construc-on of its proposed liquefac-on facili-es or other projects by certain dates or at all; statements regarding future levels of domes-c and interna-onal natural gas produc-on, supply or consump-on or future levels of liquefied natural gas ( LNG ) imports into or exports from North America and other countries worldwide, regardless of the source of such informa-on, or the transporta-on or demand for and prices related to natural gas, LNG or other hydrocarbon products; statements regarding any financing transac-ons or arrangements, or ability to enter into such transac-ons; statements rela-ng to the construc-on of our natural gas liquefac-on trains ( Trains ), or modifica-ons to the Creole Trail Pipeline, including statements concerning the engagement of any engineering, procurement and construc-on ("EPC") contractor or other contractor and the an-cipated terms and provisions of any agreement with any EPC or other contractor, and an-cipated costs related thereto; statements regarding any agreement to be entered into or performed substan-ally in the future, including any revenues an-cipated to be received and the an-cipated -ming thereof, and statements regarding the amounts of total LNG regasifica-on, liquefac-on or storage capaci-es that are, or may become, subject to contracts; statements regarding counterpar-es to our commercial contracts, construc-on contracts and other contracts; statements regarding our planned construc-on of addi-onal Trains, including the financing of such Trains; statements that our Trains, when completed, will have certain characteris-cs, including amounts of liquefac-on capaci-es; statements regarding any business strategy, our strengths, our business and opera-on plans or any other plans, forecasts, projec-ons or objec-ves, including an-cipated revenues and capital expenditures and EBITDA, any or all of which are subject to change; statements regarding projec-ons of revenues, expenses, earnings or losses, working capital or other financial items; statements regarding legisla-ve, governmental, regulatory, administra-ve or other public body ac-ons, approvals, requirements, permits, applica-ons, filings, inves-ga-ons, proceedings or decisions; statements regarding our an-cipated LNG and natural gas marke-ng ac-vi-es; and any other statements that relate to non- historical or future informa-on. These forward- looking statements are o[en iden-fied by the use of terms and phrases such as achieve, an-cipate, believe, contemplate, develop, es-mate, example, expect, forecast, opportuni-es, plan, poten-al, project, propose, subject to, strategy, and similar terms and phrases, or by use of future tense. Although we believe that the expecta-ons reflected in these forward- looking statements are reasonable, they do involve assump-ons, risks and uncertain-es, and these expecta-ons 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 presenta-on. Our actual results could differ materially from those an-cipated in these forward- looking statements as a result of a variety of factors, including those discussed in Risk Factors in the Cheniere Energy, Inc., Cheniere Energy Partners, L.P. and Cheniere Energy Partners LP Holdings, LLC Annual Reports on Form 10- K filed with the SEC on February 21, 2014, and Quarterly Reports on Form 10- Q filed with the SEC on July 31, 2014, which are incorporated by reference into this presenta-on. All forward- looking statements afributable to us or persons ac-ng on our behalf are expressly qualified in their en-rety by these Risk Factors. These forward- looking statements are made as of the date of this presenta-on, and other than as required under the securi-es laws, we undertake no obliga-on to publicly update or revise any forward- looking statements.

3 3 What Is Liquefied Natural Gas (LNG)? LNG is natural gas that has been super-cooled to -260 F and changed from gas to liquid Liquefaction reduces volume by 600-to-1 Stored cold in insulated containers at near atmospheric pressure Safe to store and transport LNG is colorless, odorless, non-corrosive, and non-toxic Becomes lighter than air when vaporized

4 Global Natural Gas Reserves TCF 3,500 3,000 U.S. Natural Gas Resource Base 2,915 TCF of total recoverable reserves 1,219 TCF recoverable shales 2,500 1,692 Tcf Unconventional 2,000 1,011 Tcf Conventional 1,500 1, Tcf Proved Reserves US Russia Iran Qatar Turkmenistan Saudi Arabia UAE Venezuela Nigeria Algeria Iraq Indonesia Australia China Malaysia Egypt Norway Kazakhstan Kuwait Unconven\onal gas is abundant globally, but only the U.S. has the technical capability to develop at present Source: 2011 BP Sta0s0cal Review (Global Reserves); Advanced Resources Interna0onal US Natural Gas Resources & Produc0ve Capacity, August 2010 (US Resource Base) ; MIT, The Future of Natural Gas, 2009 (shales economic below $6)

5 Projected Global LNG Demand Growth Regional LNG Import Outlook (mtpa) Europe Americas Middle East/N. Africa Asia Global demand is forecast to grow from 236 mtpa (~32 Bcf/d) in 2012 to 532 mtpa (~71 Bcf/d) in 2030 ~4.6% CAGR equivalent to ~15.6 mtpa average growth per year (~three 5 mtpa trains) Source: Wood Mackenzie 2013 Q4 Data; Base Case Scenario

6 U.S. Demand vs. Produc\ve Capacity Bcf/d 120 The U.S. holds vast natural gas resources recoverable at low prices Domes\c demand cannot keep pace with supply growth 110 U.S. Demand High/Low Range Produc\ve Capacity at $4.55/MMBtu wellhead ( average) 103 ~ 29 Bcf/ d Surplus Source: EIA Annual Energy Outlook 2013 (U.S. Demand). Range includes Low Economic Growth, High Economic Growth and $25 Carbon Tax Scenarios Advanced Resources Interna0onal Inc., U.S. Natural Gas Resources and Produc0ve Capacity: Mid 2013 Update (Produc0ve Capacity). In constant 2010 $.

7 Corpus Chris\ Liquefac\on Project Site

8 Corpus Chris\ Liquefac\on Project Houston New Orleans Corpus Chris\ Gulf of Mexico Ar0st s rendi0on Design produc0on capacity is expected to be ~4.5 mtpa per train, using ConocoPhillips Op0mized Cascade Process Advanced commercializa\on Proposed 3 Train Facility >1,000 acres owned and/or controlled 2 berths, 3 LNG storage tanks (~10.1 Bcfe of storage) Key Project Agributes 45 [. ship channel 13.7 miles from coast Protected berth Premier Site Condi-ons Established industrial zone Elevated site protects from storm surge Soils do not require piles Local labor, infrastructure & u-li-es 23- mile 48 pipeline interconnected to several inter- and intrastate pipelines Project Update Lump Sum Turnkey contracts signed with Bechtel Stage 1: ~$7.1B includes 2 Trains, 2 tanks, 1 berth Stage 2: ~$2.4B includes 1 Train, 1 tanks, 1 berth SPAs signed covering ~7.65 mtpa at a fixed fee of $3.50/MMBtu An-cipate FID on Stage 1 in early 2015 First LNG expected 2018

9 Corpus Chris\ Pipeline Project 23 miles of 48 pipe, 2.25 Bcf/d deliverability, 4.5 Bcf/d interconnect capacity Enterprise: 0.5 Bcf/d Tennessee: 1.0 Bcf/d Transco: 0.5 Bcf/d Sinton Compression Sta?on ~41,000 Hp NGPL: 0.5 Bcf/d KM Tejas: 1.0 Bcf/d Channel/HPL: 0.5 Bcf/d TaA Compression Sta?on ~12,300 Hp TETCO: 0.5 Bcf/d Corpus Chris\ Liquefac\on Corpus Chris? Gulf of Mexico Gulf Coast Markets Northeast Markets Southeast Markets Midwest / Great Lakes Markets Connects with Henry Hub

10 Corpus Chris\ Gas Supply Network Source Current Rig Count Current Produc\on Bcf/d 2020 est. Bcf/d Barneg Haynesville Eagle Ford Marcellus Permian Granite Wash Woodford Marcellus / U\ca Woodford Granite Wash Permian Basin Barneg Haynesville Shale Plays Basins Eagle Ford Corpus Chris\ NGPL Tennessee Gas HPL KM Tejas Oasis Enterprise Source: Lippman Consul0ng, Baker Hughes and Bentek, as of May 2014

11 Corpus Chris\ Liquefac\on SPAs SPA progress: ~8.42 mtpa take- or- pay style commercial agreements ~$1.5B annual fixed fee revenue for 20 years PT Pertamina (Persero) Endesa S.A. Iberdrola S.A. Gas Natural Fenosa Woodside Energy Trading Électricité de France EDP Energias de Portugal S.A. Annual Contract Quan\ty (TBtu) Annual Fixed Fees (1) ~$278 MM ~$411 MM ~$139 MM ~$274 MM ~$154 MM ~$140 MM ~$140 MM Fixed Fees $/MMBtu (1) $3.50 $3.50 $3.50 $3.50 $3.50 $3.50 $3.50 LNG Cost 115% of HH 115% of HH 115% of HH 115% of HH 115% of HH 115% of HH 115% of HH Term of Contract (2) 20 years 20 years 20 years 20 years 20 years 20 years 20 years Guarantor N/A N/A N/A Gas Natural SDG, S.A. Woodside Petroleum LTD Guarantor/Corporate Credit Ra\ng (3) BB+/Baa3/BBB- BBB/Baa2/BBB+ BBB/Baa1/BBB+ BBB/Baa2/BBB+ BBB+/Baa1/BBB+ A+/Aa3/A+ BB+/Ba1/BBB- Contract Start (4)(5) Train 1 / Train2 Train 1 Train 1 / Train 2 Train 2 Train 2 Train 2 / Train 3 Train 3 N/A N/A (1) 11.5% of the fee is subject to infla-on for Pertamina and Woodside; 14% for all others (2) SPA has a 20 year term with the right to extend up to an addi-onal 10 years. (3) Ra-ngs are provided by S&P/Moody s/fitch and subject to change, suspension or withdrawal at any-me and are not a recommenda-on to buy, hold or sell any security. (4) Condi-ons precedent must be sa-sfied by December 31, 2014 (Pertamina Train 1) or June 30, 2015 (all others) or either party can terminate. CPs include financing, regulatory approvals and posi-ve final investment decision. (5) If FID is reached on Sabine Pass T6 prior to Corpus Chris- T1, Pertamina contract will transfer to Sabine Pass T6 with iden-cal terms.

12 Economic Development in Football Terms Corpus Chris\ Liquefac\on = $14 billion Equivalent to over 11.5 Cowboys Stadiums Being Built in the Coastal Bend

13 Brownfield LNG Export Project: Sabine Pass Liquefac\on U\lizes Exis\ng Assets, Trains 1-4 Fully Contracted, Under Construc\on Current Facility ~1,000 acres in Cameron Parish, LA 40 [ ship channel 3.7 miles from coast 2 berths; 4 dedicated tugs 5 LNG storage tanks (~17 Bcfe of storage) 5.3 Bcf/d of pipeline interconnec-on Liquefac\on Trains 1 & 2 Fully Contracted Lump Sum Turnkey EPC contract w/ Bechtel Total EPC contract price ~$4.0 billion Overall project ~65% complete (as of 4/30/2014) Opera-ons es-mated late 2015/2016 Liquefac\on Trains 3 & 4 Fully Contracted Lump Sum Turnkey EPC contract w/ Bechtel Total EPC contract price ~$3.8 billion Construc-on commenced in May 2013 Overall project ~30% complete (as of 4/30/2014) Opera-ons es-mated 2016/2017 Liquefac\on Expansion - Trains 5 & 6 Design production capacity is expected to be ~4.5 mtpa per train, using ConocoPhillips Optimized Cascade Process Bechtel commenced preliminary engineering Permiwng ini-ated February 2013 FERC scheduling no-ce received May 2014 Significant infrastructure in place including storage, marine and pipeline interconnection facilities; pipeline quality natural gas to be sourced from U.S. pipeline network

14 SPL Construc\on March 2015

15 Project Execu\on Spring 2015 T1 Methane Cold Box Train 3 Train 4 T1 Ethylene Cold Box Compressor Area Train 1 Air Coolers T2 Methane Cold Box T2 Ethylene Cold Box Propane Condenser Area Train 2

16 Corpus Chris\ Liquefac\on Impacts Infrastructure Investment ~$14 B Regional Impact of Corpus Christi LNG Project Direct Jobs Peak 3,500 construc-on jobs 350 permanent jobs at terminal Es-mated 15 million work hours Indirect & Induced Jobs U.S.* 35,000-50,000 jobs from CC LNG construc-on 55,000 75,000 jobs from ini-al E&P drilling s-mulus ~47,000 jobs long- term from CC LNG & E&P opera-ons Economic Impacts* $730 Million/yr to South Texas Economy $11 - $20 Billion/yr to U.S. GDP during construc-on $4.4 Billion/yr to U.S. GDP long term $5.9 - $9.5 Billion/yr improvement to US Balance of Trade * Data derived from The Perryman Group, "The Anticipated Impact of Cheniere's Proposed Corpus Christi Liquefaction Facility on Business Activity in Corpus Christi, Texas, and the US," May 2012.

17 Expanding U.S. Natural Gas Exports Will Promote stability in domes\c natural gas pricing S\mulate state, regional and na\onal economies Reduce reliance on foreign sources of oil Improve U.S. balance of payments Promote liberaliza\on of global natural gas trade Advance na\onal security Increase economic trade 17

18 Ques?ons?