Corporate presentation January 2019 Cautionary statements - PowerPoint PPT Presentation

Corporate presentation January 2019

Cautionary statements Forward-looking statements The information in this presentation includes “forward-looking statements” within the meaning of Plans for the Permian Global Access Pipeline and Haynesville Global Access Pipeline projects Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange discussed herein are in the early stages of development and numerous aspects of the projects, Act of 1934, as amended. All statements other than statements of historical fact are forward-looking such as detailed engineering and permitting, have not commenced. Accordingly, the nature, statements. The words “anticipate,” “assume,” “believe,” “budget,” “estimate,” “expect,” timing, scope and benefits of those projects may vary significantly from our current plans due to a “forecast,” “initial,” “intend,” “may,” “model,” “plan,” “potential,” “project,” “should,” “will,” wide variety of factors, including future changes to the proposals. Although the Driftwood pipeline “would,” and similar expressions are intended to identify forward-looking statements. The forward- project is significantly more advanced in terms of engineering, permitting and other factors, its looking statements in this presentation relate to, among other things, future contracts and contract construction, budget and timing are also subject to significant risks and uncertainties. terms, margins, returns and payback periods, future cash flows and production, delivery of LNG, future costs, prices, financial results, liquidity and financing, regulatory and permitting Projected future cash flows as set forth herein may differ from cash flows determined in developments, construction and permitting of pipelines and other facilities, future demand and accordance with GAAP. supply affecting LNG and general energy markets and other aspects of our business and our prospects and those of other industry participants. We may not be able to enter into definitive agreements with Vitol on the terms contemplated in the MOU or at all. Our forward-looking statements are based on assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions, expected future The financial information on slides 4, 6, 7, 9, 19, 20, 22, 23, 29, and 33-35 is meant for illustrative developments, and other factors that we believe are appropriate under the circumstances. These purposes only and does not purport to show estimates of actual future financial performance. The statements are subject to numerous known and unknown risks and uncertainties which may cause information on those slides assumes the completion of certain acquisition, financing and other actual results to be materially different from any future results or performance expressed or implied transactions. Such transactions may not be completed on the assumed terms or at all. Actual by the forward-looking statements. These risks and uncertainties include those described in the “Risk commodity prices may vary materially from the commodity prices assumed for the purposes of the Factors” section of our Annual Report on Form 10-K for the fiscal year ended December 31, 2017 illustrative financial performance information. and of our Quarterly Report on Form 10Q for the quarter ended September 30, 2018, and other filings with the Securities and Exchange Commission, which are incorporated by reference in this The forward-looking statements made in or in connection with this presentation speak only as of the presentation. Many of the forward-looking statements in this presentation relate to events or date hereof. Although we may from time to time voluntarily update our prior forward-looking developments anticipated to occur numerous years in the future, which increases the likelihood statements, we disclaim any commitment to do so except as required by securities laws. that actual results will differ materially from those indicated in such forward-looking statements. Reserves and resources Estimates of non-proved reserves and resources are based on more limited information, and are subject to significantly greater risk of not being produced, than are estimates of proved reserves. 2 Disclaimer

Introduction 3 Introduction

Tellurian is capturing LNG value Strong global fundamentals call for ~100 mtpa of additional U.S. LNG Tellurian developing ~$30 billion of assets to generate ~$8 cash flow per share annually Guaranteed EPC with Bechtel differentiates Tellurian and secures project execution 4 Introduction

New LNG capacity call: ~100-250 mtpa mtpa Global LNG supply outlook 800 Capacity required (1) 9.6% p.a. growth rate 700 ~250 mtpa 10% (2) 600 500 ~100 mtpa 5% (3) 400 Under construction 300 In operation 200 100 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Sources: Wood Mackenzie, Tellurian Research. Notes: (1) Assumes 85% utilization rate. (2) Assuming sustained 2015-2018 demand growth rate of ~9.6% p.a. post-2020. (3) Conservative estimate of 4.5% p.a. demand growth rate post-2020. 5 Introduction

2018 LNG hub price ~$10/mmBtu = JKM $/mmBtu $20 2018 LNG market presents opportunity for $18 ~ $8 billion of annual $16 EBITDA for Driftwood (1) $14 $12 $10 JKM $8 $6 Henry Hub $4 TELL gas $2 production $0 cost: J A J O J A J O J A J O J A J O J A J O J A J O $2.25/mmbtu 2014 2017 2013 2015 2016 2018 Annual avg. $9.76 $5.72 $7.14 $16.58 $13.88 $7.45 JKM ($/mmBtu) Sources: Platts, Tellurian research. Note: (1) Based on full development of Driftwood LNG terminal, assuming JKM price of $10/mmBtu, a shipping rate of $1.50/mmBtu and a delivered FOB cost of $3.00/mmBtu. 6 Introduction

Tellurian projects annual ~$8 cash flow/sh (1)  Integrated model ― Production Company, Pipeline Partners Network, LNG Terminal (~$8 billion in equity) ― Variable and operating costs expected to be $3.00/mmBtu FOB ~40% 100% ~60% Equity ownership  Financing Driftwood Holdings ― ~$8 billion in Partners’ capital (~$20 billion in project finance debt) through investment of $500 per tonne of LNG ― ~$20 billion in project finance debt ~12 equates to $1.50/mmBtu with mtpa projected interest and amortization Production Pipeline LNG Tellurian Company Network Terminal Marketing  Tellurian ~16 mtpa ― Tellurian will retain ~12 mpta and ~40% of the assets Partners ― Estimated $2 billion annual cash flow to Tellurian (2) Notes: (1) Annual cash flow per share based on anticipated $2 billion annual cash flow to Tellurian and ~247 million shares outstanding. (2) See slide 23 for estimated annual Tellurian cash flow at various assumed U.S. Gulf Coast netback prices and margin levels. Introduction 7

Bechtel LSTK secures project execution Driftwood EPC contract costs ($ per tonne) $700  Leading LNG EPC contractor ― 44 LNG trains delivered to 18 customers ~$550 in 9 countries $500 $490 ― ~30% of global LNG liquefaction $380 capacity (>125 mtpa)  Tellurian and Bechtel relationship ― 16 trains (1) delivered with Tellurian’s Phase 1 Phase 2 Phase 3 Phase 4 Total executive team Capacity ― Invested $50 million in Tellurian Inc. 11.0 5.5 5.5 5.5 27.6 (mtpa) Source: Bechtel website. Note: (1) Includes all trains from Sabine Pass LNG, Corpus Christi LNG, Atlantic LNG, QCLNG, ELNG. 8 Introduction

Tellurian and Vitol sign JKM-indexed MOU Summary of MOU agreement JKM liquidity is increasing (1)  Tellurian to supply Vitol with 1.5 mtpa for Cleared JKM swaps on an LNG equivalent basis (2) a minimum of 15 years on an FOB basis ~32.0  Volumes derived from Tellurian’s retained ~186.5% CAGR offtake capacity at Driftwood LNG  ~$430 million annual EBITDA opportunity, ~$6.5 billion over 15 years (3) 26.6  Agreement aligns with evolving commoditization of the LNG industry 9.5  Vitol also considering potential equity 0.58 0.08 0.35 investment in Driftwood Holdings 0.06 2.9 2012 2013 2014 2015 2016 2017 YTD 2018 Sources: S&P Global Platts, ICE, CME. (3) Assuming $10/mmBtu JKM price and a $5.50/mmBtu margin. Notes: (1) Based on year-to-date swaps through exchanges through October 2018. (2) Assumes 1 lot = 10,000 mmBtu and 52 mmBtu per tonne of LNG. 9 Introduction

Final Investment Decision expected 1H 2019 Milestone Target date Fully-wrapped EPC contract November 2017 • • Draft FERC EIS September 2018 • • Final FERC EIS January 2019 • • Final FERC Order 1H 2019 • • Final Investment Decision 1H 2019 • • Notice to Proceed to Bechtel 1H 2019 • • First LNG 2023 • • 10 Introduction

Tellurian differentiated to provide value Experienced World-class Fixed-cost EPC Regulatory Unique business management partners contract certainty model  Management  Guaranteed  FERC  Integrated track record at lump sum scheduling ― Upstream reserves Cheniere and turnkey notice indicates ― Pipeline network BG Group contract with final EIS will be ― LNG terminal Bechtel received by  Low-cost  43% of Tellurian January 2019  Flexible owned by  $15.2 billion for founders and 27.6 mtpa management capacity 11 Introduction

Contact us  Amit Marwaha Social media Director, Investor Relations & Finance @TellurianLNG +1 832 485 2004 amit.marwaha@tellurianinc.com  Joi Lecznar SVP, Public Affairs & Communication +1 832 962 4044 joi.lecznar@tellurianinc.com 12 Introduction

Project details 13 Project details