North American LNG Projects and Outlook

June 24 2014

2

North Americans are eyeing a promising market

2013 2014 2015 2016 2017 2018 2019 20200

2

4

6

8

10

12

14

Global LNG demand (bcf/d)

Japan Korea China Other Asia & Pacific Europe India Latin America

Source: RBC Capital Markets

3

Korea, Japan, Taiwan may be slowing, but other AsiaPac beckons

Japan

Korea

China

Other Asia & Pacific

Europe

India

Latin America

-5% 0% 5% 10% 15% 20% 25%

-2%

2%

19%

13%

7%

15%

19%

LNG demand growth forecast2013-20 CAGR (%)

Source: RBC Capital Markets

4

Latter half of the decade belongs to North America

Source: IHS CERA, RBC Capital Markets

Global Liquefaction Capacity Growth Outlook 2008-20

5

US has 68 mtpa approved to non-FTA countries

Source: RBC Capital Markets, March 26th 2014

ProjectFinal

InvestmentDecision (FID)

OfftakeAgreement(s)

DOE ExportApproval

(FTA)

DOE ExportApproval(Non‐FTA)

FERCApplicationSubmitted

FERCConstruction

Approval

Sabine Pass(18mtpa, 2015‐17)

Freeport LNG(13.2mtpa, 2018)

Lake Charles(15mtpa, 2019)

Cove Point LNG(5.3mtpa, 2017)

Cameron LNG(12mtpa, 2018)

Jordan Cove: (6mtpa, 2018‐19)

Oregon LNG(9.6mtpa, 2019)

Corpus Christi(13.5mtpa, 2018)

Lavaca Bay FLNG: (4.4ttpa, 2018)

IncompleteComplete

6

Additional 41 mtpa awaiting approval to non-FTA countries

Source: RBC

ProjectFinal

InvestmentDecision (FID)

OfftakeAgreement(s)

DOE ExportApproval

(FTA)

DOE ExportApproval(Non‐FTA)

FERCApplicationSubmitted

FERCConstruction

Approval

Gulf Coast LNG:(21mtpa, 2018)

Elba Island LNG(2.5mtpa, 2016‐17)

Gulf LNG(10mtpa, 2019)

CE FLNG(8mtpa, 2018)

Golden Pass: (15.6mtpa, 2018)

Main Pass Energy: (24mtpa, 2018‐19)

Magnolia LNG(8 mtpa, 2018)

IncompleteComplete

7

The US form guide to LNG

• Tolling model

• Multiple market exposures

• HH indexed pricing

• Brownfield capital cost

• Low operating cost

• Asian partners

• Deep supply base

• Reusable infrastructure

• EPA rules, demand growth

• Mexican demand

• Weather

• Panama Canal pricing

• HH pricing volatility

• Regulatory environment

• Social license

• Contract time limits

HandicapsStrategies to Win

8

Canada has 112 mtpa awaiting customers

Source: RBC Capital Markets, March 26th 2014

ProjectUpstream

Gas SupplyFID

OfftakeAgreements

NEB ExportApproval

Douglas Channel LNG (1.8mtpa, 2016)

Kitimat LNG (10mtpa, TBD)

Pacific NorthWest: (12‐18mtpa, 2019‐20)

LNG Canada (12‐24mtpa, 2020)

Prince Rupert: (14‐22mtpa, 2020‐21)

WCC LNG (10‐30mtpa, 2021‐23)

Woodfibre LNG (2.1mtpa, 2017)

Triton LNG (2.3mtpa, TBD)

Aurora LNG (24mtpa, 2021‐23)

Woodside Petroleum (TBD)

Goldboro LNG (10mtpa, 2019‐20)

IncompleteComplete Partially Complete

9

The Canadian form guide to LNG

• Freight

• Long contracts

• Huge resource

• Low gas cost

• Atlantic, Pacific exposure

• Asian partners

• Energy security

• Capital experience

• Favourable regulatory

• Greenfield capital cost

• Labour, supply constraints

• Fiscal uncertainty

• Infrastructure constraints

• Pipelines

• Oil-indexed pricing

• Social license challenges

HandicapsStrategies to Win

10

Australia will win the LNG race to 2016 …

• Close out existing projects

• Become excellent in all operations

• Deliver high reliability

• Explore brownfield options

• Work on social license

11

… but needs to take out $4/mcf in capital costs

Eastern Australia (CSG)

East Africa (Mozambique)

West Coast Canada (Montney)

Western Australia (Conventional

Offshore)

US Gulf Coast (Haynesville)

0

2

4

6

8

10

12

14

16

5.44 4.93 4.826.95

2.88

2.43 2.17 2.311.58

3.26

5.34.1 3.6 2.5

4.3

Integrated supply cost comparisonsEstimated Capital Cost ranges

Liquefaction Processing & Transportation Upstream Cost

$10-12/mcf

$13-14/mcf$11-13/mcf $11-13/mcf $10-12/mcf

Source: RBC Capital Markets

North American LNG Appendices

13

US LNG Export Projects: Overview

Source: FERC, API, RBC

LNG Export Projects Type Size (mtpa) Location Start-Up Partners DOE Status

Sabine Pass Trains 1‐4 Brownfield 16 Sabine, Louisiana 2015-19 Cheniere Energy Approved

Freeport LNG Brownfield 13.2 Freeport, Texas 2018-19 Michael Smith, Conoco Approved

Lake Charles Brownfield 15Lake Charles,

Louisiana2019 Energy Transfer, BG Group Approved

Cove Point Brownfield 5.3 Lusby, Maryland 2017-18 Dominion Resources Inc ApprovedFreeport LNG* Brownfield 3 Freeport, Texas 2018-19 Michael Smith Approved

Cameron LNG Brownfield 12 Hackberry, Louisiana 2019GDF Suez, Mitsubishi, Mitsui, Sempra

EnergyApproved

Jordan Cove Greenfield 6 Coos Bay, Oregon 2018-19 Veresen Inc Approved

Oregon LNG Greenfield 9.6 Warrenton, Oregon 2019 LNG Development Company Review

Corpus Christi Greenfield 15 Corpus Christi, Texas 2018+ Cheniere Energy ReviewLavaca Bay FLNG Greenfield 10 Port Lavaca, Texas 2018 Excelerate Energy Review

Gulf Coast LNG Greenfield 21 Brownsville, Texas 2018 Basin Exploration Company Review

Elba Island LNG Brownfield 4 Savannah, Georgia 2017-18 Southern LNG/Kinder Morgan Review

Gulf LNG Liquefaction Brownfield 11.5 Pascagoula, Mississippi 2019-20 GE Energy ,Kinder Morgan Review

CE FLNG Greenfield 8 Plaquemines Parish 2018 Cambridge Energy Review

Golden Pass Brownfield 15.6 Sabine, Texas 2018 Golden Pass Products LLC Review

South Texas LNG Greenfield 8 Corpus Christi, Texas 2017+ Pangea, Statoil ReviewMain Pass Energy Greenfield 24 Offshore Louisiana 2016-17 Freeport-McMoRan Energy Review

Sabine Pass Train 5 Brownfield 2 Sabine, Louisiana 2019 Cheniere Energy ReviewSabine Pass Train 5 Brownfield 1.8 Sabine, Louisiana 2019 Cheniere Energy Review

Venture Global LNG Greenfield 5Lake Charles,

Louisiana2018+ Venture Global LLC Review

Eos LNG Greenfield 12 Brownsville, Texas TBD Eos LNG LLC ReviewBarca LNG Greenfield 12 Brownsville, Texas TBD Barca LNG LLC Review

Sabine Pass Trains 5‐6 Brownfield 6.4 Sabine, Texas 2019 Cheniere Energy Review

Magnolia LNG Greenfield 8Lake Charles,

Louisiana2018 LNG Ltd Review

Delfin FLNG Greenfield 13 Offshore Louisiana 2017-20 Delfin LNG LLC Review

Waller Point LNG Greenfield 1.5Lake Charles,

LouisianaTBD Waller LNG Services, LLC Review

Gasfin Development Greenfield 1.5Lake Charles,

Louisiana2019+ Gasfin Development USA, LLC Review

Texas LNG Greenfield 2 Brownsville, Texas 2018 Texas LNG LLC Review

Louisiana LNG Energy Greenfield 2 Plaquemines Parish 2017 Louisiana LNG Energy LLC Review

Note*: Freeport- Freeport filed two separate non‐FTA applications (combined 2.8 bcf/d) and received approval for 1.8 bcf/d, consistent with its FERC application;

14

LNG Export Terminals in the US: Under Review

14

TexasLouisiana

Gulf CoastSize: 21 mtpaPartners: Basin Exploration CompanyCapex: US$12 billionStart date: NAOfftake Agreement: No agreement

Eos LNG LLC and BarcaSize: 12 mtpa, 12 mtppaPartners: Eros & Barca LLCCapex: US$3 billionStart date: 2019Offtake Agreement: No agreement

Texas LNGSize: 2 mtpaPartners: Texas LNG LLCCapex: NAStart date: 2018Offtake Agreement: No agreement

Corpus ChristiSize: 13.5 mtpaPartners: Cheniere EnergyCapex: NAStart date: 2018+Offtake Agreement: 3.2 mtpa, Endesa (1.5), Pertamina (0.8)

South Texas LNGSize: 8 mtpaPartners: Pangea LNG, Statoil NACapex: US$5-6 billionStart date: 2017+Offtake Agreement: No agreement

Lavaca Bay FLNGSize: 4.4 mtpaPartners: Excelerate EnergyCapex: US$2 billionStart date: 2018+Offtake Agreement: No agreement

Golden PassSize: 15.6 mtpaPartners: Exxon Mobil / Qatar PetroleumCapex: US$10 billionStart date: 2018Offtake Agreement: No agreement

Louisiana LNGSize: 2 mtpaPartners: Louisiana LNG EnergyCapex: NAStart date: 2017Offtake Agreement: No agreement

Oregon LNGSize: 9.6 mtpaPartners: LNG Development CompanyCapex: US6.3 billionStart date: 2019Offtake Agreement: No agreement

Main Pass Energy HubSize: 24 mtpaPartners: Freeport-McMoran Energy, United LNGCapex: NAStart date: 2018-19Offtake Agreement: 4 Mtpa, Petronet LNG Limited (4)

Waller LNGSize: 1.5 mtpaPartners: Waller LNG ServicesCapex: NAStart date: TBDOfftake Agreement: No agreement

Gasfin LNGSize: 1.5 mtpaPartners: Gasfin Development Capex: NAStart date: 2019Offtake Agreement: No agreement

Venture global LNGSize: 5.1 mtpaPartners: Venture Global LLCCapex: NAStart date: 2018+Offtake Agreement: No agreement

Elba Island LNGSize: 2.5 mtpaPartners: Southern LNG/Kinder MorganCapex: US$1.4-2 billionStart date: 2017-18Offtake Agreement: No agreement

Oregon

Georgia

Source: FERC, API

Magnolia LNGSize: 8 mtpaPartners: LNG LtdCapex: US$3.7 billionStart date: 2018Offtake Agreement: 1.7 mtpa, West face capital (1.7)

Gulf LNGSize: 11.5 mtpaPartners: GE Energy ,Kinder MorganCapex: US$6.9 billionStart date: 2019-20Offtake Agreement: No agreement

CE FLNGSize: 8.2 mtpaPartners: Cambridge EnergyCapex: NAStart date: 2018

Offtake Agreement: No agreement

Delfin LNGSize: 13 mtpaPartners: Delfin LNG LLCCapex: NAStart date: 2017-20Offtake Agreement: No agreement

War

rent

on

Lake CharlesLake CharlesLake Charles

Lake Charles

Plaq

uem

ines

Paris

h

Pas

cag

ou

la,

Mis

sis

sip

pi

Savan

nah

, GA

Plaq

uem

ines

Parish

Offs

hore

Louisia

na

Offs

hore

Loui

sian

a

Sabine, Texas

Brownsville, Texas

Brownsville

, Texas

Brownsville, Texas

Corpus Christi, Texas

Corpus Christi, Texas

Port Lavaca, Texas

15

LNG Export Terminals in the US: Approved for Export

Jordan CoveSize: 6-9 mtpaPartners: Veresen IncCapex: US$7.5 billionStart date: 2018-19Offtake Agreement: No agreement

15

TexasFreeport LNG Expansion, L.P. and FLNG Liquefaction, LLCSize: 13.2 mtpaPartners: Michael SmithCapex: US$3 billionStart date: 2018-19Offtake Agreement: 13.2 Mtpa, Osaka Gas (2.2); Chubu (2.2); BP (4.4); Toshiba (2.2); SK E&S (2.2)

Louisiana

Sabine PassSize: 27 mtpaPartners: Cheniere EnergyCapex: US$10 billionStart date: 2015-19Offtake Agreement: 19.8 mtpa, BG (5.5),Gas Natural Fenosa(3.5), Gail (3.5), KoGas (3.5), Total (2), Centrica (1.75) 

Cameron LNGSize: 12 mtpaPartners: GDF Suez (16.6%); Mitsubishi (16.6%); Mitsui (16.6%), Sempra Energy (50.2)Capex: US$10 billionStart date: 2019Offtake Agreement: 0.8 mtpaCPC Corporation (0.8)

Lake CharlesSize: 15 mtpaPartners: Energy Transfer, BG GroupCapex: NAStart date: 2019Offtake Agreement: 15 Mtpa, BG (15)

Cove PointSize: 5.25 mtpaPartners: Dominion Resources IncCapex: US$3.4-3.8 billionStart date: 2017-18Offtake Agreement: 5.2 mtpa, Sumitomo (2.6); Gail (2.6)

Maryland

Oregon

Source: FERC, API

Sabine

Freeport, Texas

Coos Bay

Lake Charles

Lusb

y

Hackb

erry

16

Canada LNG Export Projects: Overview

Source: FERC, API, RBC Capital Markets

LNG Export Projects

Type Size (mtpa) Location Start-Up Partners DOE Status

Douglas Channel Proposed 0.7‐1.8 Kitimat, BC 2016LNG Partners (47.5%), Haisla (27.5%),Golar

LNG (25%)Approved

Kitimat LNG Proposed 10 Kitimat, BC TBDChevron (50%), Apache

(50%)Approved

Pacific NorthWest Proposed 12‐18 Prince Rupert, BC 2019‐20

PETRONAS (77%), JAPEX (10%), Indian Oil (10%), Petroleum

Brunei (3%)

Approved

LNG Canada Proposed 12‐24 Kitimat, BC 2020Shell (40%), KOGAS

(20%),Mitsubishi (20%), PetroChina (20%)

Approved

Prince Rupert LNG Proposed 14‐22 Prince Rupert, BC 2020‐21 BG Group (100%) Approved

WCC LNG Proposed 10‐30 TBD, BC 2021‐23ExxonMobil (50%), Imperial Oil (50%)

Approved

Woodfibre LNG Proposed 2.1 Squamish, BC 2017Pacific Oil & Gas

(100%)Approved

Triton LNG Proposed 2.3 TBD, BC TBDAltaGas (50%), Idemitsu (50%)

Pending

Kitsault FLNG Proposed 20 Kitsault, BC 2018 Kitsault Energy (100%) Pending

Goldboro LNG Proposed 10 Goldboro, NS 2019‐20 Pieridae Energy (100%) Pending

Aurora LNG Proposed 24 Grassy Point, BC 2021‐23CNOOC (60%), INPEX

(20%), JGC (20%)Pending

H‐Energy Proposed 4.5 Melford, NS 2020 H‐Energy (100%) NA

Stewart Energy LNG Proposed 5‐30 Stewart, BC 2017+Canada Stewart Energy

Group (100%)Pending

Woodside Proposed NA Grassy Point, BC NA Woodside Petroleum NA

17

LNG Export Terminal in Canada: Operating & Planned

17Source: FERC, API, RBC Capital Markets

Canada

Douglas Channel LNGSize: 1.8 mtpaPartners: Haisla Nation, LNG Partners, Golar LNGCapex: US$0.5 billionStart date: 2016Offtake Agreement: Signed, details not available

LNG CanadaSize: 12-24 mtpaPartners: Shell, PetroChina, KOGAS, MitsubishiCapex: US$12 billionStart date: 2020Offtake Agreement: Partners are LNG buyers

Kitimat LNGSize: 10 mtpaPartners: Chevron, ApacheCapex: US$4.5 billionStart date: FID 2014Offtake Agreement: 2 mtpa, Kogas (2)

Prince RupertSize: 14-22 mtpaPartners: BG GroupCapex: US$11 billionStart date: 2020-21Offtake Agreement: No agreement

Nikiski,

Alaska

Woodfibre LNGSize: 2.1; mtpaPartners: Pacific oil & gasCapex: US$1.7 billionStart date: 2018Offtake Agreement: No agreement

Alaska LNGSize: 15-18 mtpaPartners: ConocoPhillips, ExxonMobil, BP, TranscanadaCapex: US$11 billionStart date: 2023+Offtake Agreement: No agreement

H-Energy LNGSize: 4.5 mtpaPartners: H-EnergyCapex: US$3 billionStart date: 2020Offtake Agreement: No agreement

Goldboro LNGSize: 10 mtpaPartners: Pieridae EnergyCapex: CAD$5-10 billionStart date: 2019Offtake Agreement: E.ON Global Commodities (5 mtpa)

Pacific NorthWestSize: 12-18 mtpaPartners: Petronas, Japex, IndianOil, Petroleum Brunei, SinopecCapex: US$11 billionStart date: 2019-20Offtake Agreement: 3 mtpa, Indian Oil (1.2), Sinopec (1.8)

Kenai LNGSize: 0.4 mtpaPartners: ConocoPhillipsCapex: NAStart date: Operating SeasonallyOfftake Agreement: NA

Stewart Energy LNGSize: 5-30 mtpaPartners: Stewart EnergyCapex: NAStart date: 2017+Offtake Agreement: No agreement

Kitsault Energy lngSize: 20 mtpaPartners: Kitsault EnergyCapex: NAStart date: 2018

Offtake Agreement: No agreement

Aurora LNGSize: 24 mtpaPartners: CNOOC, Inpex, JGCCapex: NAStart date: 2021-23Offtake Agreement: No agreement

Woodside PetroleumSize: TBDPartners: TBDCapex: TBDStart date: TBDOfftake Agreement: No agreementWCC LNG

Size: 10-30 mtpaPartners: ExxonMobil, Esso, Imperial OilCapex: NAStart date: 2021-23Offtake Agreement: No agreement

Triton LNGSize: 2.3 mtpaPartners: Atlas Gas, Idemitsu Kosan Co.ltdCapex: NAStart date: TBDOfftake Agreement: No agreement

Nik

isk

i,

Ala

ska

Ste

war

t, B

C

Kits

ault,

BC

Grassy Point, BC

To be decided

To be decided

Melford, Nova ScotiaGoldboro, Nova

Scotia

Squamish, BC

Kitimat, BC

Kit

imat

, BC

Kitim

at, BC

Prince Rupert,

BCPrince Rupert, BC

18

Contact me for more insights: Geoffrey Cann

• National Director, Oil and Gas, Deloitte Brisbane

• Project experience in Canada, Korea, Japan, China, Hong Kong, Australia, USA, Caribbean

• Strategy, transformation, cost reduction

• Blog: www.geoffreycann.com

• Twitter: @geoffreycann

• Email: gecann@deloitte.com.au

• Phone: 61-447-366-333