Liquefied Natural Gas Limited - ABN...
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ASX: LNG and OTC ADR: LNGLY Liquefied Natural Gas Limited 2017 Annual General Meeting Greg Vesey, Managing Director & Chief Executive Officer 16 November 2017
Transcript of Liquefied Natural Gas Limited - ABN...
ASX:LNGandOTCADR:LNGLY
LiquefiedNaturalGasLimited2017AnnualGeneralMeeting
GregVesey,ManagingDirector&ChiefExecutiveOfficer
16November2017
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Forwardlookingstatement/alljurisdictionsTheinformationinthispresentationisnotanofferorrecommendationtopurchaseorsubscribeforsecuritiesinanyoneormoreentitiesintheLNGLGrouportoretainorsellanysecuritiescurrentlybeingheld.Thispresentationdoesnottakeintoaccount,norisitintendedtotakeintoaccount, thepotentialand/orcurrentindividualinvestmentobjectivesand/orthefinancialsituationofinvestors.
Thispresentationwaspreparedwithduecareandattentionandtheinformationcontainedhereinis,tothebestofLNGLGroup’sknowledge,asofthedateofthepresentation.
Thispresentationcontainsforward-lookingstatementsthataresubjecttoriskfactorsassociatedwiththegasandenergyindustry.Theexpectationsreflectedinthesestatementsarecurrentlyconsideredreasonablybased,buttheymaybeaffectedbyarangeofvariablesthatcouldcauseactualresultsortrendstodiffermaterially,includingbutnotlimitedto:priceandcurrencyfluctuations,theabilitytoobtainreliablegassupply,gasreserveestimates, theabilitytolocatemarketsforLNG,fluctuationsingasandLNGprices,projectsitelatentconditions,approvalsandcostestimates,developmentprogress,operatingresults, legislative,fiscalandregulatorydevelopments,economicandfinancialmarketsconditions,includingavailabilityoffinancing.
Norepresentationorwarranty(expressorimplied)isorwillbemadebyanyperson(includingLNGLGroupanditsofficers,directors,employees,advisersandagents)inrelationtotheaccuracyorcompletenessofallorpartofthisdocument,oranyconstituentorassociatedpresentation,informationormaterial(collectively,theInformation),ortheaccuracy,likelihoodofachievementorreasonablenessofanyprojections,prospectsorreturnscontained in,orimpliedby,theInformationoranypartofit.TheInformationincludesinformationderivedfromthirdpartysourcesthathasnotnecessarilybeenindependentlyverified.
Subjecttoanycontinuingobligationsunderapplicablelaworanyrelevantstockexchangelistingrules,LNGLGroupdisclaims anyobligationorundertakingtodisseminateanyupdatesorrevisionstoanyforwardlookingstatementsinthispresentationtoreflectanychangeinexpectationsinrelationtoanyforwardlookingstatementsoranychangeinevents,conditionsorcircumstancesonwhichanysuchstatementswerebased.
Tothemaximumextentpermittedbylaw,eachentityintheLNGLGroup,alongwitheachentity’srespectiveofficers,employeesandadvisers,excludesallliability(includinginnegligence)foranylossordamagewhichmaybesufferedbyanypersonasaconsequenceofanyinformationinthispresentationoranyerrororomissiontherefrom.
Allreferencestodollars,centsor$inthisdocumentisareferencetoUSDollars,unlessotherwisestated.
ThisAnnualGeneralMeeting(AGM)presentationandQ&AsarebeingrecordedandwillbeavailableontheHomePageunder“LatestNews”and“WebcastsandInterviews”oftheCompany’swebsite(www.lnglimited.com.au)aftertheAGM.
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Corporatestructure
LNGLisanAustralianpubliccompany(ASX:LNG)• Developerofmid-scaleLNGexportterminals
• Projectsareindirectwhollyownedsubsidiaries
• PatentedOSMR® liquefactionprocesstechnology
• 16– 20mtpaofcapacityunderdevelopment
DeliveringcompetitiveandinnovativeLNGprojectstotheglobalmarket
BEARHEADLNGMAGNOLIA
LNG
OSMR®
TechnologyLNGTechnologyPty
Ltd(Perth,WesternAustralia)
LiquefiedNaturalGasLimited
“LNGL”(Perth,WesternAustralia)
MagnoliaLNGproject
“MLNG”(LakeCharles,LAUSA)
BearPawPipelineproject
“BearPaw”(PointTupper,NovaScotia)
BearHeadLNGproject
“BHLNG”(PointTupper,NovaScotia)
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Corporatesnapshot
Nosignificantchangessincelastupdate
Corporatedata
• ASX/USOTCADRcode LNG/LNGLY• CashbalanceasatSeptember30,2017 ~A$38.2million• DebtoutstandingasatSeptember30,2017 None• Marketcapitalization(A$0.46/share)asatNov.16,2017 ~A$236million• Currentsharesonissue 513.0million• Currentincentiverights 13.6million
Shareregister(asatOctober20,2017)
• NorthAmerica 49.0%• AustraliaandAsia 17.0%• Top20shareholders 52.7%
‒ Baupost Group 12.2%‒ Valinor Management 8.2%
• NumberofShareholders 9,656
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BoardofDirectors
ExperiencedBoardofDirectorstaskedtooverseeLNGL’sgrowth
RichardBeresfordNon-ExecutiveDirector
Over30yearsexperienceininternationalenergyindustry,includingBritishGasplc,WoodsidePetroleumLtd,andCLPPowerHongKong
PhilipDMoellerNon-ExecutiveDirector(US-based)FormerCommissioneroftheFederalEnergy
RegulatoryCommission(FERC),servedinotherpublicandprivateindustryrolesthroughouthis
career
LeeanneBondNon-ExecutiveDirector
Aprofessionalcompanydirectorwithboardrolesintheenergy,waterandengineeringservicessectors
PaulCavicchiChairman
Over25yearsexperienceininternationalenergy,includingExecutiveVicePresidentofGDFSUEZEnergy
NorthAmerica,Inc.
MichaelSteuertNon-ExecutiveDirector(US-based)
Over30yearsseniorleadershipexperience,includingwithengineeringandconstructionindustryasCFOand
SeniorVicePresidentatFluorCorporation
GregVeseyManagingDirector&CEO
ExtensiveexperiencewithChevronCorporationandTexacoover35years,includingPresidentofChevron’s
NaturalGas&VPGasSupplyandTrading
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Leadership
DeepandbroadLNGexperienceenhancesprojectdeliveryassurance
.
.
MikeMottChiefFinancialOfficerOver30yearsoffinanceand
accountingexperienceinseniorexecutiveroles.Mikeisbasedin
Houston.
Kinga DorisGeneralCounsel andJoint
Company SecretaryOver20yearsoflegalexperienceadvisingglobalenergycompanies.
KingaisbasedinHouston.
Greg VeseyManagingDirector/CEOofLNGL
Over35yearsintheinternationalenergysectorwithChevronandTexaco.Gregisbasedin
Houston.
LisaVassalloVP,HumanResources
Over20 yearsHRexperienceinretailenergy,oilfieldservices,renewableenergy,andLNG.Lisaisbasedin
Houston.
JohnBaguleyChiefOperatingOfficer
Over30yearsindeliveryoffrontendengineeringdesignandEPCservicestomajorLNGprojectsworldwide.Johnisbasedin
Houston.
AndrewGouldGroupDevelopmentManagerandJointCompanySecretaryOver20yearsinseniorrolesinthe
financeandenergysectors.AndrewisbasedinAustralia.
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VISION
VALUES
World’spremierproviderofmid-scale LNGliquefactionsolutions
Safety—Performance—Partnership—Environment—Integrity—Diversity—Innovation—People
MISSION
STRATEGY
Deliversafe,reliable,energyefficient,flexiblemid-scaleLNGliquefactionsolutionsatthe industry’slowestfullcyclecosttoourcustomersand partners,whileminimizingecologicalimpacts
ParticipateinglobalLNGprojectsby:•Owning,developing,andoperatinggreenfieldLNGsites•ContributingOSMR®technologysolutionstosecureequityownership innewandexistingthird-partyLNGprojects• LicensingtheOSMR®processtechnologytothird-parties
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2017highlights
• AmendedandRestatedEquityCommitmentAgreementwithStonepeakInfrastructurePartners
• MagnoliaLNGextendedpricevalidityoftheengineering,procurement,andconstruction(EPC)contractwithKSJV(aKBR– SKE&CjointventureledbyKBR)throughDecember31,2017
• MagnoliaLNGreceiveditsNoticetoProceed(NTP)fromtheFERCtocommenceInitialSitePreparationactivities
• TheNovaScotiaEnvironment(NSE)approvedBearHeadLNG’sGreenhouseGasandAirEmissionManagementPlan
• TransportCanada’sTERMPOLReviewCommitteecompletedtheirreviewoftheBearHeadLNGTERMPOLreport
• BearPawPipelineCorporationInc.(BearPaw)receivedNovaScotiaUtilityandReviewBoardapprovaltoconstructa62.5kmnaturalgaspipelineconnectingBearHeadLNGtothepipelinegrid
• BearPawreceiveditsenvironmentalassessment(EA)approvalfromtheNSE
• ExitedFisherman’sLandingLNGproject
• SuccessfulexecutionoftheCompany’sliquiditymanagementplaninmanagingcashburn
OurprojectsarepositionedwelltoleadnextwaveofLNGconstruction
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LNGsupplyanddemandfundamentalsbalancein2022
Mostpunditsagreewiththisrange
GlobalLNGsupply/demandfundamentals
Source:BloombergNewEnergyFinance(2017)
Market over-contracted during 2019-20
• ClearsupportforLNGL’sviewofa2022shiftfromover- toundersuppliedLNGmarket• Forecastedgrowthcontinuestoclimbtowardsadoublingofconsumptionfromcurrentlevels• ThematurityofourprojectsplaceLNGLattheforefrontofthenextwaveofLNGconstruction
Supplycapacity:LinerepresentsexpectedglobaldesigncapacityandnotprojectedLNGsupplydeliveredtotheLNGmarket
Note:SupplycapacityexplanationaddedforclaritybyLNGLimited
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YearlynetLNGimports/exportsin2035
LNGiscirca50%ofgloballytradedgasin2035upfrom32%currently
Asia315mtpa136mtpa
CentralandSouthAmerica
14mtpa(4mtpa)
Europe121mtpa28mtpa
Projected2035RangeofTrade
(Exports)– 430mtpaImports– 450mtpa
NorthAmerica(158mtpa)3mtpa
Africa(50mtpa)(27mtpa)
MiddleEast
(64mtpa)(81mtpa)
Russia(36mtpa)(11mtpa)
Australia(122mtpa)(44mtpa)
Sources:LNGLinterpretationofdatafromBP,Shell,WoodMackenzie,andPoten&Partners
Actual2016LNGTradeImports(Exports)
Note:Differencesinsupplyvs.demandresultsfromvariationsinestimates
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DriversofLNGdemandgrowthforecast
DiversityofbusinessdriversunderpinfundamentalviewforLNGgrowth
Newdemandsources– e.g.,bunkerfuel
Replacementofdeclininglegacyindigenousordomesticproductionsources
LNGcomplementsexistingdomesticproductionandpipelinegas,economicallyexpandingdiversificationofregionalfuelmix
LNGprovidesbaseloadenergysourceintoresourcechallengedregions(e.g.,Japan,Korea,Taiwan,Caribbeanarea,etc.)
LNGprovidesfuelbalancing(peakanddisruption)
Newdemandsources– e.g.,bunkerfuel
LNGimportsbyroleinmeetinggasdemand(mtpa)
Source:LNGLinterpretationRoyalDutchShellpresentation(2017)
Newdemandsources– e.g.,bunkerfuel
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AsianLNGdemand
Source:OIES(2017)
ForecastedrangeforAsiademandgrowthisbullishinnearterm
ChinawillleadnextwaveofAsianLNGGrowth
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Recentpricingandforecastedgrowthrates
• RecentlowgaspricesreflectcurrentoversuppliedLNGmarketanddepressedBrentpricing• HenryHubremainingresilient;exportspreadsareweak• Slopesforoillinkedcontractscontinuetolower;Brentremainsstubbornlystagnant• 2017LNGdemandgrowthkeepingpacewithnewprojectramp(Gorgon,SabinePass,etc.)
Source:MorganStanley(2017) Source:MorganStanley(2017)
CurrentbearishpricingreflectssupplyoverhangandlowBrentpricing
Recentpricingtrends Forecasteddemandgrowth
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NewliquefactioncapacityFIDs
LackofnewFIDswillquickentheswingtoanundersuppliedLNGmarket
NewFIDactivityunsupportiveofdemandgrowth
Source:MorganStanley(2017)
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FERCapproval– awellestablishedprocess
FERCprocesswillensuresafeandreliablefacilities
MagnoliaLNG
JordanCove
Driftwood
CalcasieuPass
PlaqueminesLNG
RioGrande
Legacy ApprovalTimeline– 45– 50Months
Pre-Filing
~ 15months
NoticeofSchedule~15months
DraftEIS
~3months
FinalEIS
~3months
FERCOrder
~6 months
FERCFinalOrder
~6 months
FERCNTP
~ 2months
DelfinLNG
MARADEquivalentApproval
BearHeadLNGCanadianEquivalentApprovalCurrentregulatorystatusofproposedGreenfieldU.S.LNGprojects
Source:K&LGatesLLP
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Predictingthewinners
ExternalpartiesrecognizingMagnoliaLNGispoisedtoleadnextwave
Ranking Project1 CorpusChristiTrain3
2 MagnoliaLNG
3 SabinePassTrain6
4 GoldenPass
5 RioGrande
6 Driftwood
7 CameronTrain4-5
8 JordanCove
9 DelfinFLNG
10 LakeCharles
Top10SecondWaveU.S.LNGProjectsAccordingtoEnergyIntelligence
Source:WorldGasIntelligence
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Competitivestrengths
• CostandenergyefficientOSMR®technologyandimplementationstrategy
• Matureregulatory,engineering,contracting,andfinancingstatus
• Siteselectionadvantagedbyexistingindustrialinfrastructure
• AccesstosignificantanddiversefeedgassourcesatMagnoliaLNG
• Stakeholderrelations• Experiencedmanagementteam
Visiblegrowthtrajectory
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LNGL’sthree-pathexecutionstrategy
Progressbeingmadeinallthreestrategypaths
DevelopEquityProjects
MagnoliaLNG
BearHeadLNG
Access3rd PartyProjects
ContributeOSMR®
TechnologyforProjectEquity
MarketOSMR®
DeriveLicensingFeesfromOSMR®Technology
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Marketing
• ConsultantssupportingmarketingeffortsinChina
• MultiplemeetingswithcustomersinJapan,Korea,Thailand,China,andotherLNGimportmarkets
• NewChiefDevelopmentOfficertorevampourmarketingefforts
• Holdingthelineonpriceinordertogetaproperreturnandmaximizeshareholdervalue
• Discussionsheavilyfocusedoninvestmentgradeandcreditworthybuyers
Intotal,LNGLismarketingtoofftakersneedingnearly70mtpaofLNG
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60
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OfftakeDiscussions
Inm
illiontonn
esperann
um
Currentofftakepotential
Requestforproposal(RFP)Duediligence/advanceddiscussionsTermsheetexchanged/underconsiderationTermsheet/LTA/SPAunderongoingnegotiationMeridianLNGHoldingsCorp
Magnolia8mtpa
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U.S.redomicilingandlistingupdate
WeremaincommittedtoredomicilingandlistingintheU.S.
“WeremaincommittedtobringingtheCompanytotheU.S.marketatanappropriatetimebestsuitedtomaximizeinvestorvalue.AU.S.listingistherightstepforLNGL,butwemustensureweproceeddeliberatelyremainingattentivetoshareholderexpectations.”
PaulCavicchi,Chairman,LNGLimited,6October2017
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2018Objectives
• SecureofftakeforMagnoliaLNG
• Focusonextendingourliquidityrunwaypasttheendof2018
• ContinuetoseektheoptimumsolutiontoBearHeadLNG’sgassupplychallenge
• LicensingOSMR®orusingittosecureequityownershipinneworexistingthird-partyprojects
• Continueexecutionofallthreetiersofourcorporatestrategy
Thankyouforyoursupport.Weareveryexcitedfor2018.
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APPENDICES
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LNGDemandGrowthDriversByCountry
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MagnoliaLNG’ssequenceofeventstofirstLNG
• Acquiredrightstositeandleasedproperty• Designedliquefactionconfiguration• PerformedFEED• SignedbindingturnkeyEPCcontract• Finalizeddetailedprocurementplans• Agreeddetailedconstruction
implementationplans• AgreeddetailedO&Mtransitionand
operatingplans• Alignedwithindustryleadingservice
providers• Receivedfullregulatoryapprovals• NegotiatedEquityCommitmentAgreement
2013- 2016 2017– 2022ProcessandTimetoFirstLNG
• Finalizeofftake• Finalizefinancing• Construction• FirstLNG
MaturityinMagnoliaLNG’splanningdifferentiatesproject
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Contacts
LiquefiedNaturalGasLimited45VentnorAvenue,WestPerthWA6005,Australia
Telephone: (08)93663700;Facsimile: (08)942988001001McKinney,Suite600Houston,Texas77002,USA
Telephone:+17138156900;Facsimile:+17138156905Email:[email protected] Website:www.LNGLimited.com.au
ASX:LNG;OTCADR:LNGLY
Australia/AsiaMr. AndrewGould
Group DevelopmentManagerandJointCompanySecretary
Americas/EuropeMr. MicahHirschfield
Sr. Manager,CommunicationsandInvestorRelations
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Forwardlookingstatement/Non-GAAPfinancialmeasures
Thefollowingpresentation,togetherwithallinformationanddatacontainedinverbalandotherwrittenstatementsorpresentationsmadebyoronbehalfofLiquefiedNationalGasLimited(“LNGL”)(ASX:LNG)(OTCADR:LNGLY),whetherrelatedtoLNGLoranyofitsassets,affiliatesorsubsidiaries,including,withoutlimitation,MagnoliaLNG,LLC(“MagnoliaLNG”),LNGTechnologyPtyLtd(“LNGTechnology”),GladstoneLNGPtyLtd(“GladstoneLNG”),BearHeadLNGCorporation(“BearheadLNG”)(LNGL,MagnoliaLNG,LNGTechnology,GladstoneLNG,BearHeadLNGandanyotherassets,affiliatesorsubsidiaries,whethernamedor unnamed,arereferredtohereinasthe”LNGLGroup”),containsforward-lookingstatementsconcerningLNGLGroup’sstrategy,operations,financialperformance,plans,projectionsandexpectations,allofwhicharesubjecttouncertainconditionsandcircumstancesinthevariouscountries,sectorsandmarketsinwhichLNGLGroupoperates orisplanningtooperate.
ThePrivateSecuritiesLitigationReformActof1995(“PSLRA”)providessafeharborprotectionsforforward-lookingstatementsinordertoencouragecompaniestoprovideprospectiveinformationabouttheirbusiness.LNGLGroupintendstorelyonthebenefitsofthesafeharborprovisionsofthe PSLRAandincludesthiscautionarystatementforpurposesofdisclosureanddisclaimer.Forward-lookingstatementsarebasedonassumptionsinvolvingjudgmentsandpredictionsconcerningthefutureandarenotstatementsofhistoricalfacts.Withoutlimitation,thewords"anticipate,"“assumptions,”"believe,"“could,”“enable,”"estimate,"“estimated,”"expect,""expected,""forecast,"“formulated,”"intends,""may,"“ontrack,”“opportunity,”"pending,""plan,""potential,"“progress,”"project," “ready,”“replicate,”"should,"“targeting,”“tracking,”andsimilarexpressionsidentifyforward-lookingstatements.Forward-lookingstatementsarenotguaranteesofoutcome,results,performanceoranyprojections,andinvolvesignificantrisks,uncertaintiesandassumptions,theresultsofwhichoftendiffermateriallyfromthoseexpressedintheforward-lookingstatements.FactorsinfluencingtheseresultsarebeyondLNGLGroup’sabilitytocontrolorpredict.
LNGLGroup’sabilitytofulfillitsobjectives,goals,strategies,synergiesandrevenue,incomeorcashflowaresubjecttosignificantnational,international,regionalandlocaleconomic,competitiveandregulatoryconditionsanddevelopments,aswellastechnologicalcompetitivedevelopments;energy,creditandcapitalmarketsconditions;inflationandinterestrates;politicalandeconomicinstabilityofoilproducingandconsumingnations;businessandregulatory orlegalchallenges,decisionsandoutcomes;timingandsuccessofbusinessdevelopmenteffortsandopportunities;aswellasweatherconditionsandotheruncertainties.Nopersonorcompanyshouldputunduerelianceonforward-lookingstatements.Nothinginthispresentationoranyforward-lookingstatementshouldbeusedasasubstituteforanyparty’sownduediligenceinvestigation,norrelieduponbyanypartyindecidingtoinvestinLNGLGrouporanyofitsprojects,ortoretainorsellany securitiesinanyoneormoreoftheentitiesintheLNGLGroup.NopersonactingdirectlyorindirectlyforLNGLGroupisauthorizedtomakeanyrepresentationorwarranty,expressorimplied,concerningtheaccuracyorcompletenessoftheinformationinthispresentationandanyforward-lookingstatements.
LNGLGroupundertakesnoobligationtoupdateanyforward-lookingstatements,anddoesnoassumeoracceptanyresponsibilityor liabilityforanyinaccuraciesinthispresentationorforward-lookingstatements.Neitherthispresentationnoranyforward-lookingstatementmadebyoronbehalfof LNGLGroupshallconstituteanoffertosellorthesolicitationofanoffertosellanysecuritiesinanyjurisdictioninwhichsuchoffer,solicitationorsalewouldbeunlawfulpriortoregistrationorqualificationunderapplicationsecuritieslawsofsuchjurisdiction.NoofferofsecuritiesinLNGLGroupshallbemadeexceptbymeansofaprospectussatisfyingthestandardsoftheSecuritiesActof1933,asamendedorotherapplicablelaw.
LNGLGroupmayuseorexpressnon-generallyacceptedaccountingprinciples(“non-GAAP”)financialmeasuresinthispresentationandforward-lookingstatements.LNGLGroupundertakesnoobligationtoreconcilenon-GAAPfinancialmeasuretocomparableGAAPmeasures.Non-GAAPmeasuresshouldnotbeconsideredanalternativetoorsubstituteforGAAPfinancialmeasures.
NOTHINGINTHISPRESENTATIONORFORWARD-LOOKINGSTATEMENTSSHALLSERVEASASUBSTITUTEFORANYREGISTRATIONSTATEMENT,PROXYSTATEMENTORPROSPECTUS,IFANY,FILEDBYLNGLGROUPWITHAPPLICABLESECURITIESEXCHANGES.INVESTORSANDINTERESTEDPARTIESAREURGEDTOCAREFULLYREVIEWANYREGISTRATIONSTATEMENTS,PROXYSTATEMENTSANDPROSPECTUS,IFANY,FILEDWITHAPPLICABLESECURITIESEXCHANGES.
