Investor Presentation DORIAN LPG August 2019
Disclaimer Forward-Looking Statements This presentation contains certain forward-looking statements including analyses and other information based on forecasts of future results and estimates of amounts not yet determinable and statements relating to our future prospects, developments and business strategies. Forward-looking statements are identified by their use of terms and phrases such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “will” and similar terms and phrases, including references to assumptions. The forward -looking statements in this presentation are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management’s examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies that are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections. Actual results could differ materially from expectations expressed in the forward-looking statements if one or more of the underlying assumptions or expectations proves to be inaccurate or is not realized. Our actual future results may be materially different from and worse than what we expect. We qualify all of the forward-looking statements by these cautionary statements. We caution readers of this presentation not to place undue reliance on forward-looking statements. Any forward-looking statements contained herein are made only as of the date of this presentation, and we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. 2
Dorian LPG at a Glance US-Based with a Global Presence Dorian LPG is a liquefied petroleum gas (LPG) shipping company and a leading owner and operator of modern very large gas carriers (VLGCs) Copenhagen London Stamford Athens The Company provides in-house commercial and technical management services for all of the vessels in the fleet Singapore Large commercial footprint with 19 vessels Current VLGC Fleet Age Profile 1 currently employed in the Helios LPG Pool, which operates 28 vessels total and is owned jointly with 10.0 9.4 Phoenix Tankers 9.0 8.0 Modern, fuel-efficient fleet comprised of 19 ECO- 7.0 VLGCs and three modern VLGCs, in addition to 6.0 years old 5.1 one chartered-in 2018-built ECO-VLGC 5.0 4.0 Average age of owned fleet is 5.1 years vs. 3.0 global fleet average age of 9.4 years 1 2.0 1.0 - Dorian LPG Global Fleet 3 Source: CRSL Excludes Dorian’s chartered -in vessels; global fleet excludes ethane carriers 1.
Investment Highlights Dorian LPG is a Market Leader in LPG Transport LPG Transport Market is Recovering from Cyclical Lows Best in class fleet supports superior cash flow Global NGL Production & Exports Continue to potential Increase • Dorian’s fleet of 22 VLGCs has an average age of 5.1 • U.S. seaborne exports remain steady and Arabian Gulf years vs. the global average of 9.4 years 1 volumes saw a slight decline • ECO vessels’ fuel efficiency translates to superior • U.S. NGL production is pushing record levels, showing earnings power vs. peers few signs of slowing down • • The Company has committed for up 10 hybrid scrubbers New North American fractionation and export capacity and is well positioned for IMO 2020 should increase LPG production and facilitate increased exports Large commercial platform offers customer flexible Asian LPG Demand Remains Strong solutions • • Propane maintains a competitive price advantage as a Dorian LPG is one of the three largest operators of VLGC feedstock in Asia vs. Naphtha tonnage globally • • A wave of new chemical and PDH plants are planned and Including the Helios LPG Pool, Dorian commercially are under construction globally manages 32 vessels 1,2 • • LPG retail use continues to grow in India and rural China Scale allows for a mix of spot, COAs, and time charters Improved Fleet Utilization Reflects Manageable Well-capitalized to perform through the VLGC Orderbook shipping cycle • • Global fleet utilization has also improved meaningfully Cash position of $57.4mm, including restricted cash, as of June 30, 2019 • Orderbook-to-fleet remains stable at ~13% • Over 90% of Company debt is fixed at attractive rates vs. • The costs of IMO 2020 are expected to increase vessel market scrapping • No refinancing required until 2022 4 1. Excludes chartered-in vessels 2. In addition to 28 VLGCs in the Helios LPG Pool, Dorian LPG owns four vessels that are on long-term time charter
LPG Market Fundamentals
The Basics . . . What is LPG? The LPG Value Chain • Gas production (~60%) LPG shipping Retail (~52%) Liquefied petroleum gas ("LPG") is a combination of C3 (propane) and C4 (butane) • Both are natural gas liquids Chemical (~23%) (“NGLs”) and are a byproduct of oil and natural gas production • These molecules are extracted or Oil production (~40%) fractionated through natural gas Industrial (~10%) processing and oil refining Engine fuel (~8%) Why Use LPG? • LPG is cleaner than coal and oil; as an alternative fuel it can remove sulfur and particulate exhaust, Refinery (~5%) reducing greenhouse gas emissions • LPG is also highly portable, Other (~2%) making it a convenient source of energy usable in remote places where ordinary gas supplies are unavailable or have been interrupted Source: WLPGA 6
Seaborne LPG Trade Flows Major VLGC Trade Routes = major exporter = major importer Longer Trade Routes Favor Larger VLGCs Very Large Gas Large Gas Medium Gas Handysize Carrier “VLGC” Carrier “LGC” Carrier “MGC” 78K – 84K cbm 50K – 60K cbm 18K – 42K cbm 2K – 22K cbm 7
Global LPG Supply
Seaborne LPG Volumes Continue to Grow Global Liftings Remain Up 15% 2019 100 YTD 95.0 95 92.5 90.6 62.7 MT 90 85.4 85 MT + 15% 80 75.1 75 70 54.5 MT 63.0 65 2018 60 YTD 2013 2014 2015 2016 2017 2018 U.S. Waterborne Exports Up 23% Arabian Gulf Waterborne Exports down -3% 2019 39.2 2019 40 35 38.9 32.7 YTD YTD 29.7 36.7 36.7 30 22.6 22.5 MT 25.4 34.8 MT 25 35 20.5 32.1 MT MT 20 + 23% - 3% 13.9 15 30 9.5 18.3 23.4 10 MT MT 5 2018 25 2018 2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018 YTD YTD Source: IHS Waterborne 9 Note: YTD values shown through July 31, 2019
U.S. LPG has Increased Global Market Share A New Era of Supply The U.S. has emerged as the largest exporting nation, • forcing price competition amongst all suppliers U.S. export growth has surprised to the upside – • exports are up 23% Y/Y The Asian markets have become increasing reliant on • U.S. LPG exports Seaborne LPG Exports by Origin 100% 7% 9% 11% 11% 12% 13% 14% 8% 8% 8% 8% 7% 10% 80% 11% 10% 11% 10% 10% 10% 10% 10% 60% 41% 37% 40% 42% 43% 43% 46% 40% 20% 34% 35% 32% 29% 28% 24% 19% - 2014 2015 2016 2017 2018 2018 YTD 2019 YTD US MEG N. Sea Med Others Source: IHS Waterborne 10
Evolving U.S. NGL and LPG Seaborne Trade Flows Ethane and Butane Fueling Seaborne NGL Export Growth • May 2019 YTD NGL exports were 1,600 + 9% 9% above the 2018 average +17% 1,400 1,200 +29% • At same time, propane exports 1,000 have grown 8% Mbbl/d 800 • Butane and Ethane exports were 600 up, showing Y/Y of 57% and 12%, 400 respectively 200 - J-16 A-16 J-16 O-16 J-17 A-17 J-17 O-17 J-18 A-18 J-18 O-18 J-19 A-19 Ethane Propane Butane U.S. VLGC Cargoes to Asia Remain Resilient Despite China Tariffs • 2019 YTD Arbs to the east were positive for 2018 YTD the majority of 2018, allowing Chinese bound cargoes to be diverted elsewhere in Asia Americas Americas Europe Europe 27.2% • 2019 arbs to the East remain 29.6% 18.5% 16.2% strong SE Asia Africa Africa 5.5% 1.0% SE Asia 2.1% • Chinese PDH and other Asian India 6.4% 2.0% cracking demand are expected to Far East outstrip incremental Middle India 45.8% Eastern supply, and force suppliers 3.2% Far East to look West, boosting ton miles 42.6% 11 Source: EIA, IHS Waterborne Note: YTD values shown through July 31, 2019
U.S. LPG Expected to Remain Price Competitive Growing U.S. Propane Production Continues at Record Volumes • August marked record propane Production production of 2.4 MMbbl/d 2.6 • 2019 YTD production has 2.4 averaged 2.1 MMbbl/d – 10.9% 2.2 above the 2018 YTD average of MMbbl/d 2.0 1.9 MMbbl/d 1.8 1.6 • Growing oil production in the 1.4 Permian and Mid-Continent are 1.2 likely to push NGL production J F M A M J J A S O N D higher 5-yr Range 2019 • Appalachian wet gas production also continues to grow Building Inventories Encourages Near-Term Propane Exports • U.S. propane inventories have Inventory remained elevated; Inventories currently stand at 86.5 MMbbl/d 120 100 • Mont Belvieu pricing increasingly reacts to international propane MMbbl 80 prices, making U.S. volumes 60 increasingly competitive for export 40 20 J F M A M J J A S O N D 5-yr Range 2019 12 Source: EIA Note: YTD through July 26, 2019
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