Project Overview & Shipping Impact

Texas LNG
On track to supply US LNG to global markets
under flexible terms and competitive prices

CONFIDENTIAL
Copyright Texas LNG LLC

November 2014
www.txlng.com

We are a Pure Play US LNG Export Project

which will produce 2 MTA of LNG from 2019

We are a credible alternative to the status-quo where few LNG suppliers

control the market and the customer is taken for granted.
We will encourage flexible terms, no destination restrictions, & delivered
prices based on gas-on-gas economics and true costs.
Our project will leverage Asian shipyards to reduce capex and thus offer
the best price for our customers.
As of TODAY, we are fully funded until FID, including engineering and
permitting activities.
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Optimal location for LNG export project

One of the closest ports to the Panama Canal

Deep Ship Channel

Project Site

Gulf of
Mexico

Brownsville, Texas, USA

Matamoros, Mexico

Project concept
o 2 MTA LNG export facility in Brownsville, South
Texas, USA
o 110+ Acre site directly adjoining Deepwater Ship
Channel (12.9 meters) and 4 lane highway.
Within 10 km from town infrastructure
o Multiple feed gas supply options
o Pre-FEED completing, FEED beginning in Nov
2014, First LNG in 2019

Texas LNGs site in Port of Brownsville is ideal for an LNG export

project
Texas LNG site meets all critical criteria
Plot Size
Waterfront Deep Water
42 feet
110+ Acres
2,400 feet
(12.8 m)
(~750 m)

Wide
Channel
~1,000 feet
(300 m)

Close Proximity to Gas Pipelines

Multiple suppliers under discussion Feed Gas Supply agreement signed with one of largest gas
trading companies in the US (company manages or sells close to 10% of US natural gas consumption).

Turning

system

to be built on site

Power Grid Access

Possible use of electric compressors

Samsung Partnership: responsible for all

engineering and minority equity owner in project
FEED ENGINEERING BEGAN TWO WEEKS AGO

Conceptual
Study
Completed in May
2014

Pre-FEED
Commenced in June
2014 completed
end Oct 2014.
13,000+ man-hours

FEED

Detailed
Engineering

Begun in
Nov 2014

Estimated:
Late 2015

Conceptual Study and Pre-FEED engineering is complete. Currently,

over 80 full-time Samsung engineers working on FEED in Houston
and Seoul, under Texas LNG technical supervision.
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Post pre-FEED Capex estimates = ~$1.3 Billion for 2 MTA

Item

Current pre-FEED
estimate

Barge / Skid Liquefaction Unit (2 MTA) + Storage Tank

~$1000 million

[LNG Plant: $415 MM, Storage Tank: $135 MM, Gas Pre-treatment +
Utilities: $390 MM, post FID PM: $20 MM + Flares: $40 MM]
Port & Shore-side Facilities

~$300 million

[Infrastructure, Dredging & Civils: $300 MM]

TOTAL CAPEX
(w/contingency; preliminary pre-FEED estimate)

~$1,300 million
(~$1.3 billion)

Texas LNG will leverage Asian shipyard construction cost and

schedule advantage
Development Capital (pre-FID) excluded
[Engineering, Environmental, Legal, Community studies and Samsung FEED payment].

Typical Australia contract terms vs Texas LNG model

$/MMBtu

Delivered to North Asia: $15/MMBtu

Delivered to North Asia: $10.7/MMBtu

Feed Gas

Shipping

Shipping

Take or Pay
portion

Operating
Charge

Liquefaction

Pipeline
Feed
Gas

Take
or
Pay

Tolling

Texas LNGs Take or Pay = $2.80*

Australian LNG project Take or Pay = $13.50

Australia (Queensland)

$/MMBtu

Texas LNG

$/MMBtu

Liquefaction
Feed Gas @ plant
Shipping Costs
Total Delivered Price

$
6.50
$
7.00
$
1.50
$ 15.00

Tolling Fee* (rise with inflation)

Feed Gas assumed price
Pipeline Tariff*
Operating Charge* (rise with inflation)
Shipping estimated
Panama Canal estimated
Total Delivered Price*

$
$
$
$
$
$
$

* Texas LNG charges based on current CAPEX and OPEX pre-FEED

estimates and may be adjusted as project development continues

2.80
4.00
0.40
0.45
2.80
0.25
10.70
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Texas LNGs pricing model provides very large price

advantages especially over long run
Offtaker has a price advantage as long as oil price above $73/bbl
(assuming US gas price = $4.00 + Texas LNG fees + Est. shipping vs 13.5% slope contracts in NE Asia)

Estimated delivered price $10.70

Source: Deutsche Bank

US will be the next wave of LNG supply

The US has the potential to

export upto >100 MTA by
2020..this would increase global
LNG capacity by >30%.
Very disruptive as it will be
priced very differently than
current LNG
Independents (like Texas LNG,
can and will develop projects
that will not be controlled by
big oil

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Source: RWE spot market presentation LNGgc Mar 2014

Number of LNG shipping routes has grown

Source: Singapore Energy Studies Institute presentation Prospects for Trans-Pacific Gas Trade, March 2012

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And LNG Shipping distances have already increased..

Source: U Western Australia at LNG World Singapore Aug 2014

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But once the US enters the picture, things will really change!

Source: BG Canada at Gastech April 2014

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In addition, many buyers of US LNG are not end-users

Source: JP Morgan Cazenove Global

LNG updated April 2014

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Number of ships required is a function distance to market

Every 1
MTA of US
exports to
Asia = 2.3
ships for
the trade

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Source: Braemar Shipping Services presentation Assessment of Global LNG Shipping Sept 2012

US LNG exports will dramatically increase demand for ships

Every 1 Bcf/d = 7 MTA

requires 25 ships
(if market is Japan
from US) AND 17 for
Korea

Source: Morgan Stanley : LNG Exports Helpful, but No Panacea Nov 2012

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The numbers are huge..

If less than 50% of all US
project proceed,
80 MTA will be exported
from US by 2020
If 40% goes to Asia

If 60% goes to Europe

32 MTA (4.3 Bcf/d)

48 MTA (6.5 Bcf/d)

73 Ships

58 Ships

Total : 130 Ships

Required
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Thankfully, there are many new ships coming to the market..but are they
enough?

Approximately 300 LNG Tankers active today

Source: Simpson Spence Young at Gastech April 18
2014

Project highlights
Pure Play US
LNG Export
Company

Low-Risk
Customer
- Friendly
Tolling
model

Multiple
Feed Gas
Supply
options
Innovative
Barge/SkidBased
Solution

Optimal
Location
and
Community
Support

Pre-FEED
engineering
completed
FEED began
Nov2014

Experienced
& Motivated
Team

Limited
environmenta
l impact
expected
Strong
Partnership
with
Samsung

Efficient use
of local
labor
Ready to
commence
FERC
process

FULLY FUNDED AND FEED HAS BEGUN

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Parting thoughts

For the first time in history, small independent entrepreneurial

companies (such as Texas LNG) are able to develop LNG export projects.
These players, as well as larger known LNG plant operators are betting
big on US exports
Thus, US exports WILL change the LNG shipping world as we know it.

BUT will you, members of the Shipping Industry be prepared for this?

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Disclaimer
Cautionary Statement:
The information and materials in this document are ; Provided for informational purposes only and are subject
to addition, deletion and modification without notice at the sole discretion of Texas LNG LLC. ; Not warranted or
guaranteed to be correct, complete or up-to-date. The information and materials could include technical
inaccuracies and other errors. ; Provided As Is without any representation or warranties of any kind. No
liability, direct or consequential, of any kind arising from the use of information and materials contained in this
document or linked website is accepted. ; Not to be considered or to be constituted as investment advice or as
any type of offer, offer, invitation, solicitation or recommendation in relation to the purchase or sale of any type
of financial instruments or security in any jurisdiction.
Any forward looking statements contained in the information and materials in this document are only
predictions and are subject to risks, uncertainties and assumptions, many of which are outside the control of
Texas LNG LLC or its officers or representatives. These risks, uncertainties and assumptions include commodity
prices, currency fluctuations, economic and financial market conditions in various countries and regions,
environmental risks and legislative, fiscal or regulatory developments, political risks, project delay or
advancement, approvals and cost estimates. Actual values, results or events may be materially different to
those expressed or implied in this document. Given these uncertainties, readers are cautioned not to place
reliance on forward looking statements .
Readers are strongly advised to complete their own investigations to the accuracy and completeness of the
contents of this or any other communication or document, written or oral, provided by or referred to by Texas
LNG LLC or its officers or representatives.

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