Building on the Promise of LNG Canada...entities from LNG Canada and the statements made in this...

Building on the Promise

of LNG Canada

Andy Calitz

CEO

LNG Canada

Disclaimer page

• LNG Canada Development Inc. (“LNG Canada”) is wholly-owned by its shareholders: Shell Canada Energy, North

Montney LNG Limited Partnership, PetroChina Kitimat LNG Partnership, Diamond LNG Canada Partnership,

Kogas Canada LNG Ltd. (together, the “Participants” and each a “Participant”). The Participants are separate

entities from LNG Canada and the statements made in this presentation are being made by LNG Canada on its

own behalf. No Participant has a controlling interest in LNG Canada.

• This presentation may contain forward looking statements of future expectations that are based on management's

current expectations and assumptions and involve known and unknown risks and uncertainties that could cause

actual results, performance or events to differ materially from those expressed or implied in these statements. The

presentation and each forward looking statement speaks only as of the date of this presentation. LNG Canada

undertakes no obligation to publicly update or revise any forward looking statement as a result of new information,

future events or other information. In light of these risks, results could differ materially from those stated, implied or

inferred from the forward looking statements contained in this presentation.

What is LNG Canada?

A Company that will export

Canadian natural gas to Asian

markets from North America’s

West Coast for the first time

A Company that transports abundant supply

of natural gas to a liquefaction facility in Kitimat, BC

A Company that transports abundant supply

of natural gas to a liquefaction facility in Kitimat, BC

Kitimat

Project site PORCHER ISLAND

TRIPLE ISLAND

PILOT STATION

KITKATLA

HECATE STRAIGHT

BANKS ISLAND

PRINCIPE CHANNEL

HARTLEY BAY

DOUGLAS CHANNEL

TERRACE

KITAMAAT

VILLAGE

PRINCE RUPERT

METLAKATLA VILLAGE

LAX KW’ALAAMS KITSUMKALUM

KITSELAS

HAIDA GWAII

A Company that has built relationships with Indigenous

groups at the facility and along the shipping route

A Company that achieved FID on October 1, 2018

surrounded by a diverse group of stakeholders and

First Nations

The largest private sector investment in Canadian history

What did LNG Canada do that was

new and different?

KOGA

S

PETRONAS PetroChina

Mitsubishi

Corporation

40%

25% 15% 15% 5%

Shell

Assembled a powerful international Joint Venture

seven years before FID, and then added Petronas

Copyright of LNG Canada

Incorporated Operator LNG

Canada

Gas sellers

LNG buyersGasSupply

Feed Gas LNGPipeline Owner(TransCanada)

BC Hydro

Federal and Provincial Governments

First NationsFEED/EPCcontractors

LNG Canada Project JVALNG Canada Shareholder Agreement

Secondment Arrangements AgreementsCapacity, Nomination, Lifting and Allocation Agreement

Marketing Arrangements

Coastal GasLink Pipeline

Shell Global SolutionsShell Research Ltd

RTA, Methanex, Other Land Owners

Participants

Affiliate Services Agreements

Marine ServiceProviders

(Vendors / Subcontractors)

LNG Canada TechnologyAgreements

LandAgreements

FEED, EPC contracts

PowerAgreements

Marine services agreement

Export Licence,Permits, Fiscals

Impact BenefitsAgreements

ParticipantsShell Canada

North Montney LNG Partnership (Petronas) PetroChina Kitimat LNG PartnershipDiamond LNG Canada (Mitsubishi)

Kogas Canada LNG

JVP Production

Gas Supply Arrangements

PipelineAgreements

Adopted a “bring your gas”, “lift and sell your own LNG” business modelAdopted a “bring your gas”, “lift and sell your

own LNG” business model

Simplified a complex value chain by allocating responsibility to those best able to execute

Satisfied demanding regulators: CEAA, OGC, EAO, NEB

0.6

0.5

0.4

0.3

0.2

0.1

0 Darwin

LNG

Rasgas

LNG

Qatar gas

LNG

Atlantic

LNG

Gorgon

LNG

Gladstone

LNG

Nigeria

LNG

Woodside

LNG

Oman

LNG

Pacific

NW

LNG

Sabine

pass

LNG

Snohvit

LNG

BC GHG

intensity

benchmark

LNG

LNG

Canada

GHG Intensity (tCO2e/tLNG)

Designed for LNG with the lowest CO2 emissions/tonne

in the world

Used an aero derivative gas turbine in an LNG facility

for the first time; efficiency provides low CO2 footprint

and maximum production

Achieved unprecedented support from community and Indigenous people

What makes LNG Canada

competitive?

World-class unconventional gas/liquids

Montney ensures supply certainty

for many decades to come

Short sailing distance to Asia

CONFIDENTIAL

A competitive fiscal framework resulting from our work with three levels of government

Carbon Tax

Corporate Income

Tax

Repeal BC LNG

Income Tax

Property Tax

Provincial Sales Tax

NEB Export License

Extension to 40 Years

BC Hydro Industrial

Rate

Capital Cost

Allowance

Infrastructure Investment

AECO lower than Henry Hub

basis

-1

0

1

2

3

4

5

6

2014 2015 2016 2017

Henry Hub

AECO

AECO basis: under -0.5 USD/MMBtu

AECO basis: over -1 USD/MMBtu

USD/MMBtu

Execution Schedule

• Minimized through modularization

Fiscal

• Persistence on tax and fiscal competitiveness

Increased production

per train

• Gas composition

• Stream days

Minimum Capex and Opex

• BCH

• Owners’ cost

• Shipping

• Value chain

• Staffing

• Pipeline Capex and Opex

• Contingency

RFP

• Competitive process for EPC lump sum construction contract

Reduction in costs, increase in production efficiency

by using every lever available

How are we building Canada’s

largest infrastructure project?

By aspiring to be the Safest Project on Earth

Copyright of LNG Canada

MODULE FABRICATION

YARDS

KITIMAT PLANT SITE JVP SCOPECGL PIPELINE

By aspiring to be the Safest Project on Earth

By making LNG Canada a collaboration with

stakeholders, First Nations and partners

Other First Nations

CEAA, EAO, OGC, NEB

CGL

ITA, BCCA, ICBA

District of Kitimat

Joint Venturers

RioTinto

Labour Providers

Government of BC

The Community

JGC Fluor

BC Hydro Haisla Nation

Government of Canada

WorkSafe BC

General Electric

By transforming from project design into

facility construction

Copyright of LNG Canada

By transforming from project design into facility construction

Cebu, ManilaDetailed Design

Office

Calgary, ABProject Directorate

Kitimat, BC Plant Site

Vancouver, BCEnvironmental

Design Office

YokohamaPlant Design

OfficeModule Fabrication Yards

Field Office, BCPipeline

Equipment FabricationPackaged Equipment

HoustonMarine & Storage

Design Office

By working with an EPC on a lump sum basis

By fabricating modules in multiple yards with a

proven track record

By providing opportunity for First Nations business,

local companies, BC and Canadian businesses

By attracting a Canadian workforce to an historical project

LNG Canada: The first Canadian LNG export facility