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HGAP
Tellurian Midstream Group | April 2019
Haynesville Global Access
Pipeline
SW Louisiana: core of US gas demand2025
Notes: LNG demand includes ambient capacity; Sources: company data,
Drilling Info, Entergy, Tellurian estimates
2
L o u i s i a n aT e x a s
G u l f o f M e x i c o
Driftwood LNG
Cameron LNG
Sabine Pass LNG
+20 bcf/d of potential demand
by 2023-25 includes:
(1) Sabine Pass 1-6
(2) Cameron LNG 1-5
(3) Driftwood LNG
(4) Golden Pass
(5) Calcasieu Pass
(6) Port Arthur LNG
(7) Lake Charles
(8) Magnolia
(9) SASOL
(10) Lake Charles CCGT
(11) OCI Methanol/Ammonia
(12) Exxon Beaumont
expansion
West
Inbound to SWLA (2019)
~11 bcf/d
Haynesville
Perryville/Delhi
Eunice/Station 85
Lake Charles, LA
SW Louisiana is the epicenter of US
LNG growth
• 11 bcf/d of expected pipeline
capacity not enough for +20 bcf/d
of potential demand in 2025
• Need North/South infrastructure to
connect supply to demand
Golden Pass LNG
Corpus Christi T1-3
Freeport T1-3
Sabine Pass T5-6
Cameron T1-5
Driftwood
Golden Pass
Calcasieu
Port Arthur
Elba Island
-
5
10
15
20
25
2017 2017-2025
Growth
2025 2017 2017-2025
Growth
2025 2017 2017-2025
Growth
2025
Texas Louisiana Other Gulf Coast*
Sector demand growth 2017-2025 (bcf/d)
IndustrialPowerLNG
*MS, AL, GA and FLSource: IHS-Markit (long-term outlook 2H 2018), LNG TELL Analysis; Golden Pass and Port Arthur included in LA due to connectivity
LNG dominates demand growthNo better market in the Southeast or US Gulf Coast than SW Louisiana
3
bcf/d
Haynesville: a world class shale play…on the doorstep of US LNG demand
Source: Drilling Info; Haynesville wet gas produciton at $2.75/MMBtu Henry Hub price
4
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
16,000,000
18,000,000
Ja
n-0
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Ja
n-0
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Ja
n-1
0
Ja
n-1
1
Ja
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Ja
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5
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Ja
n-1
8
Ja
n-1
9
Ja
n-2
0
Ja
n-2
1
Ja
n-2
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Ja
n-2
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Ja
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Ja
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Ja
n-3
0
mc
f/d
Arkla - Haynesville Haynesville North East Texas Arkla
Haynesville production built to lastResilient in low gas price environment
Source; RS Energy
5
$1.14 $0.85
$1.04
$0.20 $0.59
$0.59 $0.27
$0.40
$0.38 $0.08
$0.23 $0.24
$0.62
$0.52
$0.63 $2.31
$2.59
$2.88
Haynesville Marcellus Utica
$/m
mB
tu
Capex Operating Transportation Differentials Royalties and Severence
Last mile problemDespite Haynesville’s position, the infrastructure doesn’t exist to bring it to market
Sources: ARI, Drilling Info
6
Carthage
Perryville
Transco St85
FGT Z3
HSC
HHAD
441
Marcellus-Utica196
Permian
Anadarko
111
102
Eagle Ford
131Total selected basin shale
production,
bcf/d
Resource
size, tcf
Marcellus pipelines:
7.7 bcf/d
Midship:
1.3 bcf/d7.3
16.9
2017 2025
5.88.9
2017 2025
5.6
12.7
2017 2025
7.39.8
2017 2025
24.6
38.1
2017 2025Haynesville
50.6
86.4 35.8
2017 2025 Incremental
production
KMI: ~4.0
bcf/d
0.0
1.0
2.0
3.0
4.0
5.0
6.0
De
live
ry
Take
aw
ay
De
live
ry
Take
aw
ay
De
live
ry
Take
aw
ay
De
live
ry
Take
aw
ay
Perryville Delhi Inverness Kosci
Shipper delivery vs. takeaway comparison (bcf/d)
0.0
0.5
1.0
1.5
2.0
2.5
3.0
Perryville Delhi Inverness Kosci Total Net
Imbalance
Net pipeline delivery/takeaway (bcf/d)
Market driven out of balanceA significant portion of Northeast pipeline capacity reversals do not reach end-user markets due to physical pipeline constraints
7
Market is looking for new infrastructure to solve the problem
Source: Informational postings on company EBB’s, PointLogic
Perryville basis weakeningHaynesville production largely headed to Perryville/Delhi
Source: iCE, RS Energy
8
4
5
6
7
8
9
10
$(0.30)
$(0.25)
$(0.20)
$(0.15)
$(0.10)
$(0.05)
$-
Jan
-16
Feb
-16
Ma
r-16
Ap
r-16
Ma
y-1
6
Jun
-16
Jul-16
Au
g-1
6
Se
p-1
6
Oc
t-1
6
No
v-1
6
De
c-1
6
Jan
-17
Feb
-17
Ma
r-17
Ap
r-17
Ma
y-1
7
Jun
-17
Jul-17
Au
g-1
7
Se
p-1
7
Oc
t-1
7
No
v-1
7
De
c-1
7
Jan
-18
Feb
-18
Ma
r-18
Ap
r-18
Ma
y-1
8
Jun
-18
Jul-18
Au
g-1
8
Se
p-1
8
Oc
t-1
8
No
v-1
8
De
c-1
8
Jan
-19
Feb
-19
Ma
r-19
Ap
r-19
bc
f/d
$/m
mB
tu
Perryville Basis to HH Haynesville Production
The worst is yet to comeSouthbound capacity just starting to ramp up
Source; RS Energy
9
Other markets becoming less attractiveHouston Ship Channel rolling forward curve –
Permian wave looming
Transco Station 85 rolling forward curve – Northeast volumes are coming
10
-$0.20
-$0.15
-$0.10
-$0.05
$0.00
$0.05
$0.10
$0.15
MA
Y 1
9
NO
V 1
9
MA
Y 2
0
NO
V 2
0
MA
Y 2
1
NO
V 2
1
MA
Y 2
2
NO
V 2
2
MA
Y 2
3
NO
V 2
3
$/m
mB
tu
52 WK Range Last 3 Month 6 Month 1 Year 2 Year
Source: Bloomberg, ICE
-$0.08
-$0.07
-$0.06
-$0.05
-$0.04
-$0.03
-$0.02
-$0.01
$0.00
MA
Y 1
9
AU
G 1
9
NO
V 1
9
FEB
20
MA
Y 2
0
AU
G 2
0
NO
V 2
0
FEB
21
MA
Y 2
1
AU
G 2
1
NO
V 2
1
FEB
22
MA
Y 2
2
AU
G 2
2
NO
V 2
2
FEB
23
MA
Y 2
3
AU
G 2
3
NO
V 2
3
$/m
mB
tu
52 WK Range Last 3 Month 6 Month 1 Year 2 Year
Louisiana gas flows and basis - 2023RBN Energy
Haynesville S&D (bcf/d):Production: 9.6Demand: 0.5 Net Outflows: 9.1
South Louisiana S&D (bcf/d):Production: 2.6Demand: 4.1 Net Inflows: 1.5Imbalance -0.8-$0.45
2.2
7.9
1.7
0.6
1.98.7
1.5
*Haynesville, Bossier, Cotton Valley (Terryville)
Perryville S&D (bcf/d):Production: 0.0Demand: 0.2 Net Inflows: 0.2
3.9
5.5
-$0.40
TCO
-$0.62
Haynesville*
East TexasTransco St 85
Perryville
South LA
Katy/Ship
HGAPMap & Terms
HGAP route
13
HGAP anticipated receipts
14
Note: Actual meter size/location to be determined after the open season closes, PGAP determines the shippers’ desired receipts and verifies the interconnect with third-party pipeline.
HGAP anticipated deliveries
Note: Actual meter size/location to be determined after the open season closes, PGAP determines the shippers’ desired deliver ies and verifies the interconnect with third-party pipeline.
15
Thank you
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