Long-term LNG outlook Renee Pirrong | June 16, 2020
Cautionary statements Forward looking statements The information in this presentation includes “forward-looking statements” within the meaning of The projected financial information included in this presentation is provided for illustrative purposes Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange only and does not purport to show estimates of actual future financial performance. Act of 1934, as amended. All statements other than statements of historical fact are forward-looking The forward-looking statements made in or in connection with this presentation speak only as of the statements. The words “anticipate,” “assume,” “believe,” “budget,” “estimate,” “expect,” date hereof. Although we may from time to time voluntarily update our prior forward-looking “forecast,” “initial,” “intend,” “may,” “plan,” “potential,” “project,” “should,” “will,” “would,” and statements, we disclaim any commitment to do so except as required by securities laws. similar expressions are intended to identify forward-looking statements. The forward-looking statements in this presentation relate to, among other things, the terms of any offered investment in This document does not constitute an offer to any person to subscribe for or otherwise acquire Driftwood Holdings or related businesses (“Driftwood”) and Driftwood’s future: financial and securities or an undertaking by Tellurian Inc. or any of its subsidiaries to make such an offer. The operational results, transactions, operations and capabilities, development timeline, capital terms of any securities or offering, if any, will be set forth in definitive documents provided to expenditures and requirements, regulatory approvals and environment, workforce, partners, prospective investors. business and prospects. 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 Reserves and resources developments, and other factors that we believe are appropriate under the circumstances. These statements are subject to numerous known and unknown risks and uncertainties, which may cause actual results to be materially different from any future results or performance expressed or implied Estimates of non-proved reserves and resources are based on more limited information, and are by the forward-looking statements. These risks and uncertainties include those described in the “Risk subject to significantly greater risk of not being produced, than are estimates of proved reserves. Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2017 filed with the Securities and Exchange Commission (the “SEC”) on March 15, 2018 and other filings with the SEC, which are incorporated by reference in this presentation. Many of the forward-looking statements in this presentation relate to events or developments anticipated to occur numerous years in the future, which increases the likelihood that actual results will differ materially from those indicated in such forward-looking statements. Projected future cash flows and other financial measures as set forth herein may differ from those measures as determined in accordance with GAAP. 2 Disclaimer
LNG trade growing faster than capacity Monthly global LNG trade and capacity LNG production capacity at year end Expected % increase over prior year end million tonnes/month million tonnes/month production capacity 39 2020E export capacity 1.3% 37.8 37 35.3 2.8% 35 37.3 2020E LNG trade 33 31 29 2019 LNG trade 36.3 27 May 2020: 0.1% increase vs May 2019 25 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2019 2020 2021 Sources: IHS CERA, Tellurian analysis. 3
Entering 5-year starvation; expect rising price Global liquefaction capacity additions (mtpa) ~30 mtpa capacity additions ~146 mtpa capacity additions ~53 mtpa capacity additions Limited capacity additions (1) 1.6% per annum 8.3% per annum 2.3% per annum 0.8% per annum Expected delays 39 34 30 29 26 22 18 13 11 10 10 8 5 4 4 1 (0) -- (5) (14) 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 JKM annual average: $14.04 $15.12 $16.54 $13.85 $7.45 $5.73 $7.13 $9.74 $5.49 Sources: Wood Mackenzie, Tellurian analysis. Note: (1) Capacity additions for projects that have reached FID only. 4
>100 mtpa additional construction needed Recent demand growth rates imply the world will have LNG capacity constraints by 2021 Liquefaction capacity mtpa required by 2025 (1) 900 800 9.3% p.a. growth rate ~175 mtpa 8.0% (2) 700 6.6% (3) 600 ~130 mtpa 500 400 300 200 Under construction (4) In operation 100 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Sources: Wood Mackenzie, Tellurian Research. (4) Assumes 112 mtpa of projects under construction coming online by 2025, including Portovaya, Petronas FLNG 2, Coral FLNG, Petronas FLNG 2, Tortue LNG, LNG Canada, Calcasieu Pass, Mozambique LNG, Golden Pass LNG, Arctic LNG 2 and NLNG T7. Notes: (1) Assumes 86.5% utilization rate. (2) Assumes 8.0% annual demand growth rate from 2020-2025. (3) Assumes 6.6% annual demand growth rate from 2020-2025. 5
LNG can help improve air quality India, 2017 "Delhi has become a gas chamber“ - Delhi Chief Minister Arvind Kejriwal Sources: Javed Sultan, Anadolu Agency, Getty Images; CNBC
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