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CHENIERE ENERGY, INC.
Andrew Walker
VP LNG Strategy
January 23, 2018
European Gas Conference - Vienna
How is the Rest of the World’s LNG Interfacing With Europe?
Safe Harbor Statements
2
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, other than statements of historical or present facts or conditions, included or incorporated by reference 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 distributions to its unitholders or Cheniere Energy Partners LP Holdings, LLC or Cheniere Energy, Inc. to pay dividends to its shareholders or participate in share or unit
buybacks;
• statements regarding Cheniere Energy, Inc.’s, Cheniere Energy Partners LP Holdings, LLC’s or Cheniere Energy Partners, L.P.’s expected receipt of cash distributions from their respective subsidiaries;
• statements that Cheniere Energy Partners, L.P. expects to commence or complete construction of its proposed liquefied natural gas (“LNG”) terminals, liquefaction facilities, pipeline facilities or other projects, or any expansions or portions thereof,
by certain dates or at all;
• statements that Cheniere Energy, Inc. expects to commence or complete construction of its proposed LNG terminals, liquefaction facilities, pipeline facilities or other projects, or any expansions or portions then of, by certain dates or at all;
• statements regarding future levels of domestic and international natural gas production, supply or consumption or future levels of LNG imports into or exports from North America and other countries worldwide, or purchases of natural gas,
regardless of the source of such information, or the transportation or other infrastructure, or demand for and prices related to natural gas, LNG or other hydrocarbon products;
• statements regarding any financing transactions or arrangements, or ability to enter into such transactions;
• statements relating to the construction of our proposed liquefaction facilities and natural gas liquefaction trains (“Trains”) and the construction of the Corpus Christi Pipeline, including statements concerning the engagement of any engineering,
procurement and construction ("EPC") contractor or other contractor and the anticipated terms and provisions of any agreement with any EPC or other contractor, and anticipated costs related thereto;
• statements regarding any agreement to be entered into or performed substantially in the future, including any revenues anticipated to be received and the anticipated timing thereof, and statements regarding the amounts of total LNG
regasification, natural gas, liquefaction or storage capacities that are, or may become, subject to contracts;
• statements regarding counterparties to our commercial contracts, construction contracts and other contracts;
• statements regarding our planned development and construction of additional Trains or pipelines, including the financing of such Trains or pipelines;
• statements that our Trains, when completed, will have certain characteristics, including amounts of liquefaction capacities;
• statements regarding our business strategy, our strengths, our business and operation plans or any other plans, forecasts, projections or objectives, including anticipated revenues, capital expenditures, maintenance and operating costs, run-rate
SG&A estimates, cash flows, EBITDA, Adjusted EBITDA, run-rate EBITDA, distributable cash flow, and distributable cash flow per share and unit, any or all of which are subject to change;
• statements regarding projections of revenues, expenses, earnings or losses, working capital or other financial items;
• statements regarding legislative, governmental, regulatory, administrative or other public body actions, approvals, requirements, permits, applications, filings, investigations, proceedings or decisions;
• statements regarding our anticipated LNG and natural gas marketing activities; and
• any other statements that relate to non-historical or future information.
These forward-looking statements are often identified by the use of terms and phrases such as “achieve,” “anticipate,” “believe,” “contemplate,” “develop,” “estimate,” “example,” “expect,” “forecast,” “goals,” ”guidance,” “opportunities,” “plan,” “potential,” “project,”
“propose,” “subject to,” “strategy,” “target,” and similar terms and phrases, or by use of future tense. 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., Cheniere Energy Partners, L.P. and Cheniere Energy Partners LP Holdings, LLC Annual Reports on Form 10-K filed with the SEC on
February 24, 2017, 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 other than as required by law, we undertake no obligation to update or revise any forward-looking statement or provide reasons why actual results may differ, whether as a result of new information, future events or
otherwise.
Reconciliation to U.S. GAAP Financial Information
The following presentation includes certain “non-GAAP financial measures” as defined in Regulation G under the Securities Exchange Act of 1934, as amended. Schedules are included in the appendix hereto that reconcile the non-GAAP financial measures
included in the following presentation to the most directly comparable financial measures calculated and presented in accordance with U.S. GAAP.
Sabine Pass Liquefaction Project (Louisiana) Corpus Christi Liquefaction Project (Texas)
Cheniere Project Update
Four trains operating, and one under construction
(22.5 mtpa total)
Contracts with 3 long-term buyers now commercially
operational
Over 230 destination-flexible cargoes loaded since
start-up. Sent to 25 different countries.
Train 6 is fully permitted & ready to commercialise
First greenfield facility in the U.S. ‘lower-48’
Two trains under construction (9 mtpa total)
77.4% project completion (as of November 2017)
First LNG expected in late-2018
Train 3 is fully permitted & being commercialised
Destination of Sabine Pass Cargoes
Cheniere Office
Cheniere LNG Facility
Portugal,
Kuwait,
UAE,
Pakistan India,
Thailand
Brazil
Argentina
Houston, TX
Santiago, Chile
Washington, DC
London, U.K.
Singapore
Cargo Delivery Destination
China,
Taiwan
Spain
Mexico
Dominican
Republic
Italy, Malta,
Egypt, Turkey,
Jordan
Japan,
South Korea
Since Start Up, More Than 230 Cargoes Loaded and Delivered to 25 Countries
Chile
Tokyo, Japan
Sources: Cheniere Research, Kpler
MENA – Middle East – North Africa
Sabine Pass Exports By
Destination Region (Since Startup(1))
(1)Date reflects cargo loading date until January 4, 2018, representing all cargoes that have loaded and discharged.
Poland, Lithuania,
Netherlands,
United Kingdom Beijing, China
U.S. LNG Capacity Under Construction
5
Cheniere Constructing Half of U.S. LNG Export Capacity
Cheniere Export Project
Non-Cheniere Export Project
Source: Cheniere Research estimates for first export. Actual start dates may differ depending on construction schedules
0
10
20
30
40
50
60
70
Jan-16 Jan-17 Jan-18 Jan-19 Jan-20
mtp
a
U.S. LNG Capacity Under Construction
Sabine Pass T1-4
Cove Point
Elba Island Phase 1-2
Corpus Christi T1
Corpus Christi T2
Freeport T2
Freeport LNG T3
Sabine Pass T5
Cameron
LNG T3
Cameron LNG T3
Cameron LNG T1
Cheniere Export Project
Dec-17
Freeport T1
6
70+ flexible U.S. cargoes per month by 2020 -
underpinning growing industry liquidity
U.S. LNG Driving Change in the Industry
Largescale resource base with strong
Government support for exports
Inter-project competition driving innovation Diversification from oil indexation
1532
2080 2202
2691 2884 3141
0
1000
2000
3000
2006 2008 2010 2012 2014 2016
Non-shale Shale EIA Proved Reserves
U.S. Future Supply of Natural Gas (1)
Source: (1) Potential Gas Committee, 2017; EIA (Proved Reserves), (2) Cheniere Research, Primary FOB Customers Only, 100% UF, 170,000 cm vessel
(3) Cheniere interpretation of Wood Mackenzie data (Q1 2017)
Tcf
Visualization of possible mid-scale trains at Corpus Christi - Source: Cheniere
0
10
20
30
0
20
40
60
80
2016 2017 2019 2020
US Cargoes /
month (Left Axis) No of companies
lifting US LNG
(Right Axis)
J A J O J A J O J A J O J A J O J A J O
2018
U.S. Supply & FOB Customers (2)
Ca
rgoes /
Mo
nth
No
. o
f F
OB
Cu
sto
me
rs
LNG Contracts by Price Index (3)
0
100
200
300
400
2000 2005 2010 2015 2020 2025
mtp
a
Henry HubEurope gasHybridOilLNG demand
Oil index
HH index
LNG trade
forecast
Mid-
scale
trains
Global LNG balance – 2015 to Aug 2017
7
0
1
2
3
4
5
6
7
8
2014 2015 2016 2017
MT
/mo
nth
Supply:
Australia + US
Imports: UK +
Netherlands +
Belgium
Where did
the
incremental
global supply
go?
~60 MT
Note: countries with less than +/-3 mt increment were aggregated
Rising supply not yet overflowing into N. Europe
-20 -10 0 10 20
Japan
Brazil
South Korea
Mexico
Others -ve
France
Italy
UAE
Taiwan
Thailand
Spain
Pakistan
Jordan
India
Egypt
China
Others +ve
MT imported Jan 2015 to Aug 2017 above 2014 levels
Incremental imports since 2014
Source: Waterborne Data, Graph based on Akos Losz/ Teddy Kott – CGEP (2017)
+100
MT
-40
MT
Net
~60
MT
New
importers
in 2015
Market Balance 2017
8
-5
0
5
10
15
20
25
30
Supply
Asia
ME
NA
Lat A
m
N.A
merica
M.E
uro
pe
N.E
uro
pe
mt
Jan-Dec YOY (2017 v 2016)
Supply & regional imports
0
1
2
3
4
5
6
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
MT
M
2017
2016
China LNG imports
0
1
2
3
4
5
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
MT
M
Northern Europe LNG imports
2017 2016
Source: IHS Waterborne (2018)
Range: 2011- 2015
Range: 2011- 2015
Note: Northern Europe = U.K., Netherlands, Belgium
0
5
10
15
20
25
2014 2015 2016 2017 2018 2019
$/M
MB
tu
Note: Asia L-T Contract Proxy = 14.85% Japan Crude Cocktail (3-month average)+ $0.50/MMBtu; same formula is used with Brent crude oil prices for forward curves
Global Gas Prices (as of 3/1/2018)*
9
Oil parity
Asia L-T
Contract
Proxy
Asia
Spot
LNG
TTF
Henry Hub
Forward Curves
5
10
15
Q4 ‘17 Q1 ‘18 Cal. ‘18
Brent $57.1 /bbl $66.07 /bbl $65.93/ bbl
JKM $7.92 $10.31 $8.10
TTF $6.39 $6.76 $6.43
HH $2.93 $2.89 $2.85
Source: Bloomberg, CME, ICE, Platts, Japan Ministry of Finance, Cheniere Research * 3rd Jan 2018
Europe LNG Imports to 2020
0
20
40
60
80
100
2010 2012 2014 2016 2018 2020
mtp
a
10
Source: Various research house views (2016); Wood Mackenzie, FACTS Global Energy, IHS, PIRA, Gas Strategies, Poten and Partners
Views of various research houses
Expected growth of ~30 to ~40 mtpa
This was the outlook in
January 2017
Europe LNG Imports to 2020
0
20
40
60
80
100
2010 2012 2014 2016 2018 2020
mtp
a
11
Source: Various research house views; Wood Mackenzie, FACTS Global Energy, IHS, PIRA, Gas Strategies, Poten and Partners
Views of various research houses
Expected growth of ~30 mtpa
2016 actual
2017 actual
January 2018 update
Range of views
in January 2017
0
200
400
600
2010 2015 ' 2035
bcm
a
Determining factors
Overall Demand
Economic Growth
Coal / Carbon price
Oil price
LNG
Global supply / demand balance
Russian pipe-gas
Near-term: market share vs SMRC
Longer-term: LRMC
Other pipe-gas
Norway
Algeria
Southern Corridor (expansion)
Indigenous production
Groningen Cap
North Sea decline rate
12
European Gas Supply to 2035
Source: Cheniere interpretation of Wood Mackenzie data (H2 2017)
Europe (EU 28 + 6) supply
Indigenous
Production
Other
Piped
Russia
Piped
LNG
12
Algeria 7%
Nigeria 15%
Trinidad 10%
Egypt 3% E.G.
2% Norway
3%
Angola 4%
Cameroon 1%
US 42%
Russia W 13%
13
Source: Cheniere interpretation of Wood Mackenzie data (Q4 2017)
Algeria 24%
Nigeria 37%
Trinidad 24%
E.G. 7%
Norway 8%
2015 AB LNG supply (53 mtpa, 22% of global supply)
2020 AB LNG supply (134 mtpa, 35% of global supply)
Atlantic Basin LNG Supply & Markets
U.S. to become largest supplier in the Atlantic Basin by 2020
Spain Portugal
France Belgium Netherlands UK
Italy Greece Turkey
Israel
Poland Lithuania
Brazil
Argentina
Puerto Rico Dominican Rep. Mexico Egypt
Canada U.S.
U.S.
Trinidad
Algeria
Norway
Nigeria
E.G.
Angola
Import markets (existing and u/c)
Export countries (existing and u/c)
Russia W.
Cameroon
Jamaica
Malta
Colombia
Uruguay
Ghana
Atlantic Basin LNG projects;
Existing or Under construction
LNG Supply vs. Demand to 2030
0
100
200
300
400
500
2000 2005 2010 2015 2020 2025 2030
mtp
a
14
Qatar
LNG trade
forecast
Australia
New
supply
Supply:
existing and
under
construction
Source: Cheniere Research estimates; Woodmac for historical figures
USA
2015 to 2030
CAGR(%) = 4.6
0
20
40
60
80
100
Malaysia US Qatar Australia
mtp
a
Production capacity 2015/
2020 [1]
2015
2020
15
Slowdown in LNG supply project FIDs
0
5
10
15
20
25
30
35
40
45
502
00
4
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
Other Aus US Qatar
Qatar Hiatus Australia US
FIDs per annum (total volume)
Source: Cheniere interpretation of Wood Mackenzie data (Q1 2017)
mtpa
Hiatus
Conclusions
1. An LNG-driven transformation of global gas is underway
Flexible U.S. LNG ramping up and responding to market signals
Driving development of an interconnected and more liquid global market-place
Europe acting as the balancing market for LNG
2. Flexible LNG set to have a growing role in Europe
LNG provides supply diversification, supply competition, a transparent pricing point and volume flexibility
Declining domestic supply means that both LNG and pipeline supplies will be required
U.S. as the largest Atlantic Basin LNG supplier by 2020 well-placed to provide baseload & flexible LNG to Europe
3. Forecast LNG oversupply is not yet evident in the current market
Global LNG markets responding to lower prices & increased LNG accessibility; government policies favouring gas
LNG supply into Europe still expected to grow over next few years
Global markets will need additional LNG supply early next decade - will ‘Europe’ be a passive or active player?
16
Thank You
17
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