SUEZ LNG NA: A Leading Player in the U.S. LNG Market Clay Harris, CEO of SUEZ LNG NA LLC May 30,2007
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SUEZ LNG NA/Distrigas Profile Key Facts & Figures Currently, one of the top 2 importers of LNG into the U.S. Owns or holds long-term charters for multiple LNG tankers Owns and operates the Everett LNG Terminal north of Boston Long-term LNG sales contract with EcoElectrica in Puerto Rico Spot contracts with capacity holders at Cove Point, Maryland and elsewhere Has delivered LNG to all 6 U.S. LNG terminals: Everett, MA (SUEZ terminal); Cove Point, MD; Elba Island, GA; Lake Charles, LA; Puerto Rico; and Gulf Gateway Lake Charles, Louisiana Gulf Gateway Everett, Massachusetts Cove Point, Maryland Elba Island, Georgia Puerto Rico 3
U.S. Natural Gas Market Overview U.S. natural gas market continues to evolve from a regional market to a more global one through the increasing importance of LNG Today, the U.S. market is contributing substantially to global gas trade liquidity due to: Transparency and depth of the U.S. market Increased LNG supply diversification, linking the U.S. market more closely to Europe and Asia More than 50% of the imported LNG volumes into the U.S. in recent years being cargoes not originally contracted to serve the U.S. market 4
U.S. Natural Gas Production, Consumption, and Net Imports,1960-2030 (trillion cubic feet) 30 History Projections 25 Consumption Net Imports 21% 20 16% 15 10 5 0 7 6 5 4 3 2 1 0 2.9 Pipeline 0.9 2005 2030 0.6 Production 4.5 Liquefied Natural Gas Natural Gas Net Imports, 2005 and 2030 (trillion cubic feet) 1960 1970 1980 1990 2000 2010 2020 2030 U.S. EIA Annual Energy Outlook 2007 5
U.S. Net Imports of Natural Gas, 1990-2030 (trillion cubic feet) 5 4 3 History Canada Projections Overseas LNG 2 1 0-1 Mexico 1990 1995 2000 2005 2010 2015 2020 2025 2030 U.S. EIA Annual Energy Outlook 2007 6
LNG Supply Chain Supply Terminalling Marketing & Distribution Exploration & Production Liquefaction Shipping Regasification End Users SUEZ is present in all links of the LNG supply chain, save E&P 7
Import Terminal Investment Is Small Relative to Total Supply Chain Investment An LNG import terminal is but one piece of a large and capital-intensive supply chain 1-1.2 Capital cost imbalance in the LNG Chain Indicative costs for a typical 1 billion cubic feet per day/ 7.8 metric tonnes per annum LNG project n.75-2.25 7-8 2.5-4.5 Today, producers are facing greater investments given the rising costs of specialty materials, equipment manufacturing constraints, and scarcity of skilled laborers 8
U.S. Markets Must Compete with Other World Gas Markets for LNG Supplies LNG is a global commodity more tightly linking energy markets around the world. Price is the means by which markets balance supply and demand Fundamentally, high NYMEX prices will attract cargoes and increase supply, while lower prices will result in LNG moving to other markets such as Europe or Asia The price tightrope is both short and long term. Prices must be low enough for consumers, yet sufficiently high to attract necessary supplies 9
SUEZ s Everett LNG Import Terminal The Everett LNG Import Terminal is the longest-operating in the U.S., and the only continuously operating one Opened in 1971 as a peak shaving facility to help meet New England s relatively small natural gas demand Today it is an essential part of the region s energy supply mix Trucking Capacity 100 million cubic feet/day Vaporization Capacity 715 million cubic feet/day sustainable 1 billion cubic feet/day maximum installed 10
Importance of LNG in New England SUEZ/Distrigas serves most gas utilities in New England and currently meets 20% of the region s gas demand. New England s projected demand growth for natural gas is 1-2% per year for the foreseeable future. New England is at the end of U.S. interstate pipeline system and near the end of Canadian pipelines. The SUEZ/Distrigas terminal in Everett provides the necessary back pressure on the pipeline system. LNG s role in New England s power production is critical. Only with LNG is New England first in line. Diversity of energy supply is essential and LNG is a cleaner alternative. Distrigas supplies the fuel for the Mystic Generating Station, the largest power plant in New England. 11
Importance of LNG in New England The Everett Terminal directly connects into: Algonquin Pipeline Tennessee Gas Pipeline KeySpan local distribution system Mystic Generating power plant The Everett Terminal supplies LNG via truck to nearly all of the 46 customer-owned LNG storage tanks in region. (LNG is how natural gas is stored in New England.) Today, LNG from Everett and these facilities can meet 35% to 40% of the natural gas demand on peak days. 12
Growth Opportunity: Neptune Deepwater Port The Shuttle and Regasification vessel is based on a modified standard LNG ship 13
Neptune Deepwater Port Overview The deepwater port will consist of: Specially designed LNG vessels called Shuttle and Regasification Vessels SRVs with onboard regasification systems and a receiving cone for the buoy connection An unloading buoy system A 13.4 mile 24 pipeline that will connect into the existing natural gas pipeline system that serves eastern Massachusetts Each SRV will average a sendout of 400 million cubic feet of natural gas per day, with a peak sendout capability of 750 million cubic feet/day Approximately 1 vessel visit per week Dedicated Support Vessel First shipment of LNG expected in Fall 2009 14
Growth Opportunity: Calypso LNG Deepwater Port 15
Calypso LNG Overview 16
SUEZ LNG NA s Market Pull Strategy E&P Liquefaction Shipping Regasification Sales Concentrate our resources on the downstream markets, where we have considerable expertise Start from the customer, secure market access (regasification positions) and thus attract competitive supply Develop portfolio flexibilities (FOB and shipping) & market arbitrage in order to increase profitability 17
From 2008 SUEZ Expands Supply Sources Neptune Everett Calypso Zeebrugge Huelva Rasgas Puerto Rico ALNG YLNG Brass LNG Existing liquefaction Existing regas Planned liquefaction Planned regas 18
SUEZ LNG NA: A Leading LNG Player in the U.S. LNG is playing an increasingly important role in the U.S. LNG enables cost effective gas transportation over long distances The U.S. is short of natural gas SUEZ has a global LNG asset portfolio and strong foothold in the growing U.S. LNG market One of the top two LNG importers into the U.S. 35+ year track record - Most experienced importer and operator in the U.S./Excellent technical capabilities - Strong reputation as a pacesetter operationally, technically, and in the communities we operate Ongoing development projects present opportunities for continued growth 19
Appendix 20
Major Sources of Incremental U.S. Natural Gas Supply2006-2030 (trillion cubic feet) 28 26 Growth in Alaskan Production 24 22 Growth in LNG Imports 20 18 Base Production (all sources) Growth in Non-Associated Unconventional Sources 16 2005 2010 2015 2020 2025 2030 U.S. EIA Annual Energy Outlook 2007 21
2006 Daily U.S. LNG Imports 3.0 Everett COVE POINT ELBA ISLAND LAKE CHARLES NYMEX - Front Month Price Zeebrugge NBP $18 2.5 $16 $14 BCF/d 2.0 1.5 $12 $10 $8 1.0 $6 0.5 $4 $2 0.0 $0 Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 22
What Accounts for the Peaks and Valleys? Prices were stronger in Europe and Asia overall in 2006 Warmer than normal winter in the U.S. in 2005/2006 Colder than normal winter in Europe Continued growth in demand last year in Asia Overall demand increase in Korea Nuclear facility outages in Japan Preparation for summer peaking needs in India and Taiwan Plus, there has been an increase in non-u.s. import capacity Those LNG supplies not under long-term contract for the U.S. found more inviting destinations in Europe and Asia The exception was during the summer months when prices in the U.S. and overseas were more in line with each other 23
Key NYMEX Price Drivers Weather Supply disruptions actual or perceived ex. hurricane activity in the Gulf of Mexico Oil prices Growth in natural gas demand from the power generation sector Strength of new supplies from the Rocky Mountains, Gulf of Mexico, and Canada (ex. Mackenzie Delta) LNG imports Overall economic health of the U.S. economy 24
Access to Supply: SUEZ Group s Position in Atlantic LNG Operational Train 1 (Apr 99): 3 mmtpa Train 2 (Jul 02): 3.3 mmtpa Train 3 (May 03): 3.3 mmtpa Train 4 (Q4 2005): 5.2 mmtpa SUEZ position: 10% ownership in Train 1, option for same in Train 5 Long-term offtake: 60% Train 1, 10% Train 2 Medium-term offtake: 40% Train 1, 23% Trains 2/3 25
Access to Shipping: SUEZ Group s Fleet Carrier Name SUEZ Matthew * Catalunya Spirit Capacity 125,000m 3 138,000m 3 TCP Term/In Service Date N/A 2009 Berge Boston ** 138,000m 3 2023 Berge Everett Methania SUEZ Brussels *** SUEZ Point Fortin *** SUEZ Paris *** Neptune SRVs *** 138,000m 3 130,000m 3 162,400m 3 154,200m 3 162,400 m3 145,000m 3 2023 N/A Q2 2009 Q2 2009 Q4 2009 Q4 2009 *100% owned, **50% owned, ***under construction 26