©2011 Sempra LNG. All copyright and trademark rights reserved.

Octávio M. C. SimõesPresident

How does Alaska fitin the Global Gas Market?

Alaska LNG Summit 2012September 13, 2012

Valdez, AK

Safe Harbor Statement

This presentation contains statements that are not historical fact and constitute forward-looking statementswithin the meaning of the Private Securities Litigation Reform Act of 1995. When the company uses words like"believes," "expects," "anticipates," "intends," "plans," "estimates," "may," "would," "could," "should" or similarexpressions, or when the company discusses its strategy or plans, the company is making forward-lookingstatements. Forward-looking statements are not guarantees of performance. They involve risks, uncertaintiesand assumptions. Future results may differ materially from those expressed in the forward-looking statements.Forward-looking statements are necessarily based upon various assumptions involving judgments withrespect to the future and other risks, including, among others: local, regional, national and internationaleconomic, competitive, political, legislative and regulatory conditions and developments; actions by theCalifornia Public Utilities Commission, the California State Legislature, the California Department of WaterResources, the Federal Energy Regulatory Commission and other regulatory bodies in the United States andother countries; capital markets conditions, inflation rates, interest rates and exchange rates; energy andtrading markets, including the timing and extent of changes in commodity prices; the availability of natural gas;weather conditions and conservation efforts; war and terrorist attacks; business, regulatory, environmental andlegal decisions and requirements; the status of deregulation of retail natural gas and electricity delivery; thetiming and success of business development efforts; the resolution of litigation; and other uncertainties, all ofwhich are difficult to predict and many of which are beyond the control of the company. These risks anduncertainties are further discussed in the company's reports filed with the Securities and ExchangeCommission that are available through the EDGAR system without charge at its Web site, www.sec.gov andon the company's Web site, www.sempra.com.

2

Sempra Energy

• Created in 1998 by merger of Enova & PacificEnterprises

• Serves largest customer base of any U.S. natural gasutility

• Operates utilities, develops new energy infrastructure &provides energy services to 31 million consumersworldwide

– Regulated gas & electric utilities in California,Alabama, Mexico, Chile, Peru & Argentina

– Independent gas-fired, wind, solar power generation

– FERC regulated natural gas pipelines & undergroundgas storage

– LNG receipt terminals in Louisiana & Mexico

• Recognized in Fortune magazine’s “America’s MostAdmired Companies”

• Ethisphere magazine - one of “World’s Most EthicalCompanies”

100% 100%

3* Yearend 2011** August 21, 2012

Tangguh Ship Berthed atEnergía Costa Azul

4

Cameron LNG Regas Overview

• Located along the Calcasieu Ship Channel in Louisiana

• Site is 18 miles from Gulf of Mexico & within 36 miles of5 major interstate gas pipelines

• Critical equipment elevated 15 feet above mean sealevel for added protection in the event of a hurricane

5

1.50 Bcfd

Cameron Liquefaction Project Structuring

• $6 billion capital costs (excluding financing) for 13.5 Mtpa capacity

• Customers / JV partners and use of project financing to optimize equity requirements

• Tolling customers would most likely have 50% equity ownership

6

Cameron Liquefaction Economics

• Competitive with Asian & European term LNG & natural gas prices

• Capacity enables supply flexibility, DES LNG costs more competitive than Canadian LNG

• Firm supply sells for premium relative to spotAsia Oil-Linked* $15.80

* Wood Mackenzie Forecast 2020-2029 Average. Oil linked prices for Asia & Europe based on current contract levels.

Asia Spot* $11.50NBP* $10.55

7

Representative Valdez LNG Economics

• US Gulf Coast (USGC) liquefaction development costs drive long-term global spot prices. All new global LNG projectscompeting against additional USGC capacity development. “Law of One Price” drives long-term pricing

• Existing LNG term contracts likely renegotiated to make prices competitive with North American prices

• Forecasted Asian LNG spot price yields favorable netback price to producers & State of AlaskaAsia Oil-Linked* $15.80

Source: Wood Mackenzie* Wood Mackenzie Forecast 2020-2029 Average. Oil linked prices for Asia based on current contract levels. 8

Global Gas Demand Forecasts

100

200

400

1970 1980 1990 2000 2010 2020 2030

Bcfd

(log

scal

e)

Global Natural Gas Consumption

WoodMacBPExxonEIAIEA

10

20

40

80

160

1970 1980 1990 2000 2010 2020 2030

Bcfd

(logs

cale

)

North America Natural Gas Consumption

WoodMacEIABPExxonIEA

10

20

40

80

160

1970 1980 1990 2000 2010 2020 2030

Bcfd

(log

scal

e)

Asia Pacific Natural Gas Consumption

WoodMacBPExxonIEAEIA

Trend

9

2000 -2010

CAGR WoodMac Exxon BP EIA IEA

Global 2.8% 3.0% 2.1% 2.6% 1.7% 2.2%

NorAm 0.5% 2.1% 1.3% 5.2% 0.9% 0.7%

Asia Pac 6.8% 6.2% 4.0% 1.1% 3.9% 4.8%

2010 - 2020 CAGR

Global Gas Demand Forecasts

10

-5

0

5

10

15

20

25

China NorthAmerica

MiddleEast

AsiaPacific xChina

Europe Africa LatinAmerica

FSU

Bcfd

Incremental Natural Gas Demand (2015-2025)Wood Mackenzie Forecast

Incremental gross LNG ImportsNet Indigeneous & Pipe Imports*

* Net of intra-regional LNG Trade

How Big is the Available LNG Demand?• Global existing & under construction liquefaction satisfy global LNG demand through 2018

• There is substantial competition between indigenous production, piped gas (from Russia, Central Asia, Algeria) &other LNG projects to meet global contestable gas demand growth

• Less than 50% of possible & speculative LNG projects needed to meet global demand through 2025– WoodMac forecasts that available global LNG demand opportunity for new global liquefaction projects (including Sabine Pass) from 2018 to 2025 is

21 Bcfd (2.6 Bcfd or 20 mtpa / year)

– Countries rushing to fill this forecasted LNG demand are: Nigeria, Russia, Mozambique, Tanzania, Equatorial Guinea, Papua New Guinea,Cameroon, Australia, Cypress, Israel, Venezuela, Iran, Canada, US Lower 48 & Alaska

160 mtpa21 Bcfd

Global Liquefaction Capacity Potential

Source:Wood Mackenzie 11

How does Valdez LNG breakeven compare relativeto Japan’s alternatives for new gas supply?

• Valdez LNG is among Japan’s most price & risk competitive alternatives for new gassupply

– According to Wood Mackenzie, the breakeven delivered cost (LRMC) of new gas toJapan ranges from $9.50 to $13 / MMbtu (2012 US$)

– Assuming the economies of scale can be achieved to deliver 20 mtpa, Valdez LNGcould achieve a delivered cost at the low end of this range

– After considering project risk, cost of capital & willingness of the host government tosell at its marginal cost of production, Valdez is the lowest cost new gas supply forEast Asia

• Most of Australian deepwater & CBM LNG projects have higher FOB breakeven pricesthan Valdez LNG

12

What are Alaska’s Strengths & Weaknesses?Strengths

• Well-defined governmental framework & stronglegal institutions

• Large, well-defined low cost gas resource—associated gas largely low-cost byproduct of oilproduction

• Established oil & infrastructure support industries –gas pipeline installed in oil pipeline right of way

• Substantial progress on permitting requirements

• Large positive potential geopolitical impact on US’Pacific basin interests

• Relatively low project risks, low cost to finance

• Cold ambient temperatures allows for highliquefaction efficiencies

• Proximity to attractive Asian markets

– High Pacific basin prices for associated NGLs

• Existing deepwater port

Weaknesses• No clear Alaskan state political direction

• Gas owners may have conflicted global interests – supportuncertain

– Alaska will impact Pacific basin gas pricing

– Gas owners have other governmental relationships

– Gas buyers demand near-term action, while Alaska seemscontent to wait

• Support from Congress & federal bureaucracies uncertain

• Severe seismic zone

• Difficult construction environment

– Costly North Slope gas treatment plant

• Gas buyers may demand Asian natural gas market-basedpricing, not indexing to oil or European gas

• No clear mechanism to ensure gas supply

Aligning Interests

• Alaska needs new revenue source NOW

• Urgency among Stakeholders Varies

– Gas sellers (Producers)

Can bank Alaskan gas until needed

From global perspective, Alaska is NOT critical resource province to producers

– Gas buyers (End-users)

Need competitively priced gas NOW

Willing to providing financing if state ensures gas supply

• Options for Creating Urgency

– Pursue project development directly with gas buyers

– Minimize federal political interference

– Move forward with pipeline -- outside of AGIA process if necessary

14

Alternative Project Structures

• Current — AGIA

– Participant interest alignment & commitment uncertain. Likely the slowest of allalternatives

• Abandon AGIA – Create consortium of credit-worthy Pacific basin gasbuyers to permit, finance, build & operate facilities

– All gas sales would occur at inlet of North Slope gas treatment plant

– State, producer involvement in project financing could be minimal

– Infrastructure may be regulated as an in-state utility

– FERC would regulate safety & environmental issues related to liquefaction plant

– If producers (gas sellers) want to be involved in project, they would be treated nodifferently than gas buyers (end-use utilities, etc.)

15

Key Factors for a Successful Project

• Already in Place

– Identified low cost gas resource

– Sufficient market demand

– Preliminary project plans

• Needed for Success

– State of Alaska needs to: convey the message that urgent action is needed back a single clear & viable plan where participants have clear alignment of interests establish mechanism for ensuring gas supply

– Strong consortium of potential high credit quality buyers

– Project development needs to start NOW — more studies & delay diminishes ability to getsufficient market support

16

Valdez LNG Development Timeline

• LNG is not oil. The LNG-value chain is highly capital intensive & will require participation of high credit qualitybuyers & buyer’s governments to facilitate timely finance

• Time is of the essence. Alaska is competing against intense global competition to launch pipeline & liquefactionprojects. Low-cost projects frequently don’t win the race. Strong consistent political support is essential

• First task is to develop a consortium which will provide the credit support to facilitate project construction. Alignmentof interests among consortium members is essential

• Developing commercial & financing agreements are the critical path activities. Alaska needs to be highly involved &committed to make this happen

– Gas treatment, pipeline & liquefaction can be state-regulated utilities to facilitate complete financial transparency17

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Permitting

Engineering

Develop consortium

Commercial

Financing

FID

Construction

Startup

Summary

• Valdez LNG has superior economics & risk relative to nearly all competing global gas projects

• Asian gas buyers are interested in Valdez LNG -- willing to provide financial support

• But Alaska gas sellers appear to have conflicting interests

• Intense global competition – some national producer economies depend on finding new gasmarkets

• Asian gas consumers have little confidence that anything will change in Alaska – more studies& more delay

• Ample American technical & project management expertise to make project happen

• There is every reason to believe that Valdez LNG could be highly profitable for State of Alaska& Gas Owners

• Window of opportunity for Valdez LNG is 2021-25 timeframe, but closing rapidly

18

©2011 Sempra LNG. All copyright and trademark rights reserved.

Questions