Which Cheniere company is right for you?

What Cheniere Investment is Best for You?

Cheniere: A Pure LNG InvestmentIn Demand for Liquefied

Natural Gas is expected to double between now and 2030

America’s Growing Gas Production will be a viable competitor on the global market

Cheniere: A Pure LNG InvestmentBased on global gas prices and the costs to liquefy and ship LNG, liquefaction facilities in US could generate greater than $3.00 per mcf in gross profit.

Photo Source: NASA

Cheniere: A Pure LNG InvestmentOf all energy companies, Cheniere is the only US based company

that’s 100% geared towards LNG exportsCurrent Assets

• Sabine Pass Liquefaction Facility • 27 million tons of LNG per year of export capacity• Currently under construction• First deliveries expected in 2015/2016

• Corpus Christi Liquefaction Facility• 13.5 million tons of LNG per year• Awaiting approval from Federal Energy Regulatory Committee to export to non-free

trade agreement countries• Estimated completion: 2019

• Domestic gas pipeline for Sabine Pass deliveries

Simple Business Model, Complex Structure

Photo Source: NASA

3 Publicly Traded EntitiesCheniere Energy (NYSEMKT: LNG)

Cheniere Energy Partners (NYSEMKT: CQP)

Cheniere Energy Partners LP Holdings (NYSEMKT: CQH)

Which One Is Best For You ???

Cheniere Energy Partners LP

Photo Source: NASAPhoto Credit: Wes Peck via Flickr. com

What do you get?

Ownership in Master Limited Partnership that possesses all assets related to Sabine Pass facility and pipelines

• 74% of capacity at facility contracted for 20 years

• Once entire facility is complete, Cheniere estimates distribution for CQP payment to be $3.80-3.90 per share

Cheniere Energy Partnets LP

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Positive: Stable, cash flows from long term contracts in MLP structure for income investors

Negative: Once fully operational, there isn’t a lot of room for distribution growth without significant capital expenditures

Cheniere Energy Partners LP Holdings, LLC

Photo Source: NASA

What do you own?

An entity that will own 49.4% of Cheniere Energy Partners LLC once all facilities are operational and all subordinated and Class B shares are converted to common shares

Huh?!?

Cheniere Energy Partners LP Holdings, LLC

Photo Source: NASA

What do These Subordinated & Class B Shares Mean?

Subordinated shares and Class B shares were a way for Cheniere to raise equity without needing to pay out dividends until its facilities were brought online. Here’s what you need to know:

• Cheniere Partners’ distributions are currently paid for with debt• Subordinated shares, will not receive full distributions until all distribution debts are paid

off, any excess cash flow after common share distribution and debt repayment is divided equally among subordinated shares

• Class B shares do not receive distributions but grow in share count by 3.5% per quarter until certain metrics are met, then they become common shares

• There will be no increase in dividends at Cheniere Partners until all related debts are paid and there is enough cash flow for subordinated shares to receive the same amount as a common share

Cheniere Energy Partners LP Holdings, LLC

Photo Source: NASA

Photo Credit: Wes Peck via Flickr. com

Benefit to owning Cheniere Holdings

• It’s a C-Corporation, so you don’t need to worry about the tax implications of owning a MLP

Downside to owning Cheniere Holdings

• You will receive smaller dividends until Cheniere Partners is done paying off those distribution related debts (likely after entire facility is online in 2017)

• Your shares have no voting rights

Cheniere Energy, Inc.

Photo Source: NASA

What do you own?

• 85% ownership of Cheniere Holdings

• General Partner Cheniere Partners (2% direct ownership with incentive distribution rights)

• Cheniere Marketing• Corpus Christi facility

Cheniere Energy, Inc.

Photo Source: NASA

Photo Credit: Wes Peck via Flickr. com

What you need to know:• Corpus Christi Facility has 33% of capacity committed to 20 year contracts• Cheniere Marketing will buy all non-contracted capacity at the two LNG facilities and sell it

on the spot market using chartered vessels.

Benefits to owning Cheniere Energy: • Incentive distribution rights means large

payments from Cheniere Partners• C-Corp=no tax worries• Direct ownership of 2nd facility

downside to Owning Cheniere Energy:

• Incentive distribution rights don’t kick-in until after subordinated shares get full payment

• Cheniere Marketing is highest risk aspect of business since sales aren’t guaranteed

What Could Change?

Photo Source: NASA

3 Big Possibilities:

• Corpus Christi facility could be cancelled• Unlikely, but would only have an impact on Cheniere Energy as it stands today

• Cheniere Energy could sell Corpus Christi facility to Cheniere Partners as a MLP dropdown• Potential to increase distribution at Cheniere Partners and Cheniere Holdings

• Cheniere Energy could sell off some of its 85% ownership of Cheniere Holdings to raise capital• If Cheniere Energy holds less than 25% of Cheniere Holdings shares, then Cheniere

Holdings gets voting rights

What does this all mean to me?

Your investment in Cheniere will depend on your level of risk and your patience:Cheniere Partners: Lowest risk since most of Sabine Pass facility is contracted for 20 years, currently pays a distributionCheniere Holdings: Same risk as Cheniere Partners, but you trade a lower dividend payment today for the ease of owning a C-CorpCheniere Energy: Highest risk because revenue from Cheniere Marketing less certain and outlook for Corpus Christi unclear, but greater earnings potential

Photo Source: NASA

How You Can Profit from America’s Energy Tax

“Loophole”…