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CHENIERE ENERGY, INC.
Jack Fusco
CEO - Cheniere
April 5th, 2017
Gastech - Tokyo
Keynote Address – Session 1:Contracting, Pricing & Trading of Gas & LNG
Forward Looking Statements
2
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 facts, 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, Inc. to pay dividends to its shareholders or participate in share buybacks, Cheniere Energy Partners, L.P. to pay distributions 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 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 thereof, 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 LNG sale and purchase agreement (“SPA”) or other 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,
cash flows, EBITDA, adjusted EBITDA, Net Loss, As Adjusted and Net Loss per share, As Adjusted, 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,” “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 19, 2016, 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.
Cheniere Global Overview
3
Source: DOE 2017
Cheniere Office
Cheniere LNG Facility
Portugal
UAE
Kuwait India
Brazil
Argentina
Houston, TX
Santiago, Chile
Washington, DC
London, U.K.
Singapore
SPL Cargo Delivery Destination
China
Spain
Mexico
Dominican
Republic
Italy
Egypt
Turkey
Jordan
Malta
Japan
South Korea
Tokyo, Japan
Chile
Sabine Pass has now loaded 100 cargoes – which were delivered to 18 countries across the globe
Sabine Pass Liquefaction Project
4
U.S. LNG Exports Driving Change in the Industry
Destination-free, flexible volumes
Growing liquidity
FOB and DES hub formation
New markets facilitated by abundant, competitively
priced gas
5
A more responsive, more competitive,
more diverse and more resilient LNG
trade system
0
50
100
150
200
250
300
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
mtp
a
Commercial Evolution
6
* Contract duration of 4 years or less (GIIGNL)
Source: CEDIGAZ World Outlook for 1965 – 1985 (assumes no spot volume), Poten and Partners 1985 – 2000 (2001), GIIGNL 2000 - 2016 (2016)
LNG trade by contract length
Spot &
short-term
trade*
Mid &
long-term
contract
trade
28%
72%
Bilateral deals Slow evolution Growing flexibility
0
500
1000
No
n-
OE
CD
Asia
Mid
dle
Ea
st
Eu
rop
e &
Eu
rasia
Am
eri
ca
s
Afr
ica
OE
CD
Asia
Asian Market Context
A high growth region …
7
… but LNG market-place evolving
and buyer requirements changingPrimary energy consumption growth
(2015-2040)
0
50
100
150
Non
-O
EC
DA
sia
Am
eri
ca
s
Mid
dle
Ea
st
Eu
rop
e &
Eu
rasia
Afr
ica
OE
CD
Asia
Gas consumption growth
(2015-2040)
Source: EIA International Energy Outlook 2016
Increasing demand uncertainty
Increasing market competition
Evolving business models
But security of supply still important
Asia = 57% of total
Bcm
aQ
ua
d B
Btu
Asia = 48% of total
LNG SPAs Signed in 2016
8
0
1
2
3
4
5
6
Ja
n
Feb
Ma
r
Ap
r
Ma
y
Ju
n
Ju
l
Au
g
Se
p
Oct
No
v
De
c
mt
New projects
Existing/UC/Portfolio
10
7
5
10
3
0
2
4
6
8
10
12
< = 0.5 >0.5 to1.0
>1.0 to1.5
>1.5 to2.0
>2.0 to2.5
> 2.5
No. o
f d
ea
ls
Volume of deal (mt)
0
2
4
6
8
10
12
5 yrs >5 to 10yrs
>10 to15 yrs
>15 to20 yrs
mt
LNG deals signed by volume LNG deals signed by term
LNG deals signed by project type
~25 mt in deals signed
~65% of deals signed were for volumes of 1 mtpa or less
Over 50% had terms at 10 years or under
Only 25% were signed against new project volume
2016 deal highlights
0
5
10
15
20
25
30
35
40
45
2016 2030
Short-
term
Long
or
Mid-
term
JERA portfolio plan
Source: Press reports, Cheniere Research, and JERA
No.
of
deals
68 3
9
ST
LT
MT
LNG Contract Pricing
9
0
50
100
150
200
250
300
350
400
450
2000 2005 2010 2015 2020 2025
mtp
a
Henry Hub
Europe gas
Hybrid
Oil
LNG demand
Oil index
HH index
LNG contracts by price index
98%
82%
61%
28%
Note: Contracts excluded for projects not FIDed
Source: Cheniere interpretation of Wood Mackenzie data (Q4 2016)
Percent
of
contracts
LNG trade
forecast
Price index diversity is
increasing as more Henry
Hub contracts come into
force
The extent to which
diversification continues
will depend on contracts
signed in the coming
years
0
100
200
300
400
500
2000 2005 2010 2015 2020 2025 2030
mtp
a
LNG demand
expected to nearly
double from 2015
to 2030
Supply-demand
gap projected to
open shortly after
2020 as trade
grows and existing
production declines
~30 LNG trains(1)
need to take FID by
2025 to meet
forecasted demand
through 2030
10
Qatar
LNG trade
forecast
Australia
New supply
(127 mtpa)
Supply:
existing and
under
construction
USA
2015 to 2030
CAGR(%) = 4.4
Source: Cheniere Research
(1) Assuming 85% utilization of nameplate capacity ~150 mtpa of new liquefaction capacity would be required. 5 mtpa trains = 30 trains.
LNG Supply – Demand Gap Opens Post 2020
LNG supply by country vs. trade outlook
New LNG Market Realities
11
Fragmenting /
Evolving market
place
Globalising /
Commoditising
industry – with
regional nature
New contract
structures:
price index, term,
flexibility
Supplier challenge:
how to lower cost,
innovate &
create new markets
New market
realities …
… will require
new commercial
solutions …
… but will also have
to be financeable
Conclusions
Flexible US LNG has started to flow – and has responded to global market
signals. SPL has delivered cargoes to 18 markets – so far.
US trains under construction will drive increasing flexibility and liquidity of
trade – making the global trade system more responsive, more competitive
and more resilient – to the benefit of buyers and sellers
US LNG supply wave is ‘not done yet’ – Cheniere poised to grow its LNG
platform with two permitted, brownfield trains
12
Thank You
13
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