liquefied natural gas ltd first lng shipment in 2012

LIQUEFIED NATURAL GAS LTD First LNG shipment in 2012

Liquefied Natural Gas Limited5 Ord Street

West Perth WA 6005+61 8 9366 3700

www.LNGlimited.com.au

LIQUEFIED NATURAL GAS LIMITEDCorporate Presentation October 2009

Gladstone LNG ProjectFirst LNG shipment in 2012


Overview

The LNG Limited Business

Exploiting the CSG to LNG Opportunity

Gladstone and Our Project

Future Growth Options

Key Proposition

2


LNG Limited – An Overview

LNG Limited is in the business of developing high margin mid‐scale LNG projects that connect affordable gas reserves with high economic value LNG markets.

3

HIGH ECONOMIC VALUELNG MARKETS

AFFORDABLEGAS RESERVES

Gas Production

LNG Productionand Export

Terminal

Gas Transport(Pipeline)

LNG Transport(Shipping)

LNG Import Terminal and

Regasification

Gas Consumption

Gas Exploration

CURRENT FOCUS GROWTH STRATEGY CUSTOMERS & PARTNERS



Focused on exploiting mid‐scale LNG opportunities.

Team of world‐class professionals.

High‐calibre project partners.

OSMRTM liquefaction and membrane tank technology with clear competitive advantages.

Gaining long‐term access to suitable project sites and associated infrastructure.

Set to deliver Gladstone LNG – the first CSG to LNG export project in the world:Lower capital costs,

Shorter timelines,

Higher energy efficiency,

Lower environmental impact, and

Repeatable business model

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5

ASX Code LNG

Shares on Issue 173 million

Market Capitalisation AUD247 million (at AUD1.43/share)

Cash Reserves AUD11 million (at 30 Sep 2009)

Top 5 Shareholders 49% ownership

Top 50 Shareholders 68.5% ownership

Major Corporate Shareholders

Golar LNG Energy Limited (13.2%)Arrow Energy Limited (9.2%)

2.00

1.50

0.50

1.00

0.00

Oct OctAprJan

12 month share price (AUD)


LNG Limited – Our Board and Executive Team

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An world‐class team with strong capability in development, construction and operation of major energy and LNG projects, and reputation for managing risks and delivering outcomes.

AlintaGasARCO

Arrow EnergyBP

British GasCaltex Australia

ChevronChina Light & Power Hong Kong

Commonwealth BankDepartment of Infrastructure (QLD)

Gladstone Economic Industrial DevelopmentGolar LNG

Laing O’RourkeNiko ResourcesOrigin Energy

Ports Corporation of QueenslandShell

Woodside PetroleumWorley Engineering

Phil Harvey Chairman

Richard Beresford Non‐Executive Director

Nick Davies Non‐Executive Director

Bill Hornaday Non‐Executive Director

Gary Smith Non‐Executive Director

Maurice Brand Managing Director & Chief Executive Officer

Paul Bridgwood Executive Director & Chief Technology Officer

Norm Marshall Executive Director & Chief Financial Officer

Michael Schaumburg Project Director & General Manager

Geoffrey Ellison General Manager – Development

John Drew General Manager – Operations

Garry Triglavcanin Group Commercial Manager

Lincoln Clark Group Engineering Manager

David Cliff Managing Director Gas Link Global

David Gardner Company Secretary

INDUSTRY EXPERIENCE



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Strong growth in Queensland CSG reserves. Cumulative Australian gas consumption to 2030 not expected to exceed 26,000 PJ, creating significant gas export opportunity.

Queensland CSG positioned well relative to global LNG production nodes in supplying Asian LNG markets. These are premium LNG markets with price linked to oil.

Bowen & Surat Basins2P – 15,858 PJ3P – 36,969 PJProspective – 43,261 PJ

Galilee BasinProspective – 21,745 PJ

CSG‐LNG Margin Opportunity

CSG Supply Price

LNG Off-take Price

1.5mtpa LNG requires

~90PJ/yr gas

Bowen & Surat Reserves (2P & 3P)



(‘000 PJ)



LNG LimitedDevelopment Strategy

ConventionalDevelopment Strategy

Securing gas supply Mid‐scale reserves targetedPartnerships or integration

Large‐scale reserves onlyAcquisitions / integration

Accessing LNG markets Partnerships ordirect marketing to users

Short‐term contracts possible

Direct marketing to users orinternal trading

15‐25 year contracts required

Key project characteristics

Low capital costHigh efficiencyLow emissions

Reduced time‐to‐market

High capital costMediocre efficiency

Prolonged development schedule

Liquefaction technology ProprietaryMid‐scale trains

LicensedLarge‐scale trains

Storage technology Membrane tanks Full containment tanks

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CHALLENGING THE CONVENTIONAL


Gladstone LNG Project Overview

GLADSTONE LNG

PROJECT

3. LNG OFFTAKE2. GAS SUPPLY

5. PROJECT FUNDING & ECONOMICS

ARROW ENERGY HOA(TRAIN 1)

GOLAR & TOYOTA TSUSHO HOAs(TRAIN 1)

12 years + 24 month ramp-up90PJ/yr gas supply

12 years + 24 month ramp-up1.5 mtpa LNG offtake

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1. PROJECT LOCATIONFISHERMAN’S LANDING

OSMRTM LIQUEFACTION & MEMBRANE TANKSSKEC & Laing O’Rourke EPC ContractCB&I Project Management Consultant

USD500m CAPITAL COST (EXCLUDING PORT)BNP Paribas Project Financial Advisor

Acceptable returns on one train at floor price and strong economic improvement

with additional trains

4. TECHNOLOGY & EPC CONTRACTS

Under utilised site with existing infrastructure well suited to mid-scale LNG plant


Fisherman's Landing LNG ProjectsProject Scale

Considered (mtpa)First LNG

LNG Limited ~3 2012

Curtis Island LNG ProjectsProject Scale

Considered (mtpa)First LNG

Origin and ConocoPhillips ~16 2014

Santos and Petronas ~10 2014

BG Group ~12 Late 2013

Shell and Arrow ~16 2014

1. Project Location

GLADSTONE LNGFisherman’s Landing

Curtis Island

LNG Export

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Advantages of Fisherman’s Landing

11

Low complexity, under utilised and well suited to mid‐scale

LNG plant.

Site is serviced by a natural deepwater harbour with

dredging approvals for a larger Targinie Channel in place.

Site is protected and does not require breakwater

infrastructure.

Essential infrastructure elements including roads and

water are in place.

Potential for expansion.


2. Gas Supply

Success requires a reliable long‐term supply of affordable gas reserves of the right volume and specification.

Heads of Agreement with Arrow Energy for CSG of specified quality restated in February 2009 and progress of Arrow’s project being carefully monitored.

Requisite Pipeline Licence from Surat Basin to Gladstone Gas Gate required by Arrow.

Entire gas supply for Train 1 sourced from Arrow (1,200 PJ):

45PJ/A (Year 1) Ramp‐up gas,

75PJ/A (Year 2) Ramp‐up gas, and

90PJ/A (Year 3 – Year 14) On‐stream gas.

CSG floor price with upside linked to oil price agreed.

Mid‐scale LNG trains easily duplicated...major benefit to gas suppliers.

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GLADSTONE LNGPROJECT

Arrow Energy Limited (ASX:AOE) is Australia's largest holder of CSG acreage with interests in more than 65,000 km2 and currently certified gross gas reserves of 703 PJ (1P), 4,092 PJ (2P) and 9,312 PJ (3P).


3. LNG Off‐take

Heads of Agreement with Golar LNG Energy in February 2009 to deliver LNG to Golar at the existing Fisherman’s Landing No. 5 Berth at The Port of Gladstone on a free on board (FOB) basis.

Golar entered into a Heads of Agreement with Toyota Tsusho in September 2009 to purchase 1.5 MTPA from Gladstone LNG.

Entire LNG production from Train 1 sold:

45PJ/A (Year 1) Ramp‐up gas,

75PJ/A (Year 2) Ramp‐up gas, and

90PJ/A (Year 3 – Year 14) On‐stream gas.

LNG floor price with upside linked to oil price agreed.

13

Golar LNG Limited (OSE:GOL and NASDAQ:GLNG) is one of the world’s largest independent owners and operators of LNG carriers with over 30 years of experience. Its subsidiaryGolar LNG Energy Limited is advancing the company’s midstream to upstream integration.

Toyota Tsusho Corporation (TSE:8015) is the trading company of the Toyota Motor Group and is the sixth largest trading company in the world. It undertakes a wide range of business including trading, manufacturing, processing, and retailing.

Success requires long‐term sale of high economic value gas to off‐takers and contracted end‐buyers with solid credit ratings.

GLADSTONE LNGPROJECT


Technical highlights of LNG Limited Approach Benefits for LNG Project Development

Smaller land access requirement Increases ability to strategically locate LNG projectsPotential to site closer to gas supplyPotential to site closer to existing infrastructure such as sheltered deepwater harbours and roads

Simple and efficient processUsing proven liquefaction technologyLow equipment count

Highly efficientLow construction costEasier installationEasier operation & maintenanceFast shut down and start upFaster on‐site construction

Use of proven membrane tank technology Lower construction cost of around 50%Faster construction by around 8 months

4. Technology and EPC Contracts

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Mid‐scale liquefaction technology is critical to LNG Limited’s strategic focus in developing mid‐scale LNG projects.

OSMRTM ProcessDeveloped and owned by LNG Limited


MixedRefrigerant System

MR Cooler (x2)

BOGCompressor (x2)

Feedgas

LNGShipLoading

CHP Plant

Inlet AirChiller

SuctionScrubber (x2)Once

ThroughSteamGenertor

Gas Sweatening Plant

DehydrationPlantChillerHeater

LP Fuel(Aux Boiler)

Gas Turbine Compressor (x2) HP Fuel

ProcessSteam

AmmoniaRefrigeration

Plant

PlantPower

CO2

H2 0

MarineFlare

Ammonia Refrigerant

Aux Boiler

MR Make-up

OSMRTM PROCESS

AmineRegen

STG

ACC

BFWPump

LNG Storage& Ship Loading LNG Tank

LNG Pumps (x4)

H2 0

ColdBox(x2)

GridPower

To ColdBox # 2

From ColdBox # 2


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Cold-Box Liquefactio

n UnitPre‐Cooling

Cool Gas

Mixed RefrigerantCooling &

Compression

Membrane Tank Storage and Shipping

Cold‐Box Liquefaction

Unit

1

2

OSMRTM KEY DESIGN FEATURES

Simplicity in design, construction and operation

Faster build

Reduced capital intensity

Mid‐scale

Location flexibility

Reduced capital requirement

High efficiency and low emissions

Better economics

Reduced emissions

Gas turbine inlet air cooling improves plant capacity by 15%

Supplementary cold‐box cooling improves plant capacity and efficiency by 20%

1

2

Total energy efficiency improvement of 30%over conventional LNG processes results fromOSMRTM process innovations:



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Performance Metric C3 MR* Optimized Cascade* OSMR

Total Plant Efficiency

90‐92%90‐93%

(Aero Derivatives)93‐94%

(Aero Derivatives)

Availability 92‐93%92‐94%

(2 in 1 Train)95‐96%

(2 in 1 Train)

Liquefaction Process Comparison

LNG Limited’s OSMRTM Process will have superior performanceagainst globally dominant liquefaction technologies.

Credible independent technical validation obtained.

Project Execution

SK Engineering & Construction (SKEC) and Laing O’Rourke (LOR) jointly undertaking FEED to ensure definitive and seamless EPC Contract. SKEC and LOR are proven contractors in major infrastructure projects and both have strong balance sheets.

CB&I, the world’s leading EPC contractor in conventional LNG storage and with recent large‐scale LNG plant EPC experience, has been appointed Project Management Consultant to mitigate execution risks.

*Company estimates based on information in the public domain.


5. Project Economics and FundingPROJECT FUNDING

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Golar LNG Energy providing financial support to LNG Limited as agreed in Equity Support Agreement.

BNP Paribas appointed as Project Financial Advisor.

USD250m Equity (50%) USD250m Debt (50%)

Finance to be sourced from:40%

40%20%

LNG LimitedUSD100m

Golar LNG Energy & Toyota TsushoUSD100m

Arrow EnergyUSD50m

Banking Consortium

Export Credit Agencies

Equipment Suppliers

USD500m* Project Capital Cost‡

*Subject to final exchange rates.‡Excluding port costs.


5. Project Economics and FundingPROJECT ECONOMICS

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Acceptable project returns for Train 1.

Low Train 2 capital cost (USD200‐250m) further improves project business case.

Gladstone Project Economics Summary Train 1

LNG Production Volume 1.5 Mtpa of LNG (Post Ramp‐up Period)77 million MMBtu/yr of LNG

Ramp‐up Period 24 monthsLNG Offtake / Gas Supply Price Margin Target ~USD2.50 per MMBtu of LNG at Floor PriceLNG Production Cost Target (excluding gas) ~USD0.50‐0.70 per MMBtu of LNG

Capital Cost USD500* million‡

Ownership (proposed) LNG Limited (40%)Golar LNG Energy / Toyota Tsusho (40%)Arrow Energy (20%)

*Subject to final exchange rates.‡Excluding port costs.


Future Growth Options

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LNG Limited will grow through:

Gladstone LNG Project expansion – Train 2 gas supply key focus,

Upstream integration, and

Regional diversification.

Major opportunities are emerging in Australia and other global markets.

Commit to our next LNG Project and provide guidance in the current financial year.



Gas Production

LNG Productionand Export

Terminal

Gas Transport(Pipeline)

LNG Transport(Shipping)

LNG Import Terminal and

Regasification

Gas Consumption

Gas Exploration

CURRENT FOCUS GROWTH STRATEGY CUSTOMERS & PARTNERS


Key Proposition

LNG Limited is in the business of developing high margin LNG projects.

Gladstone LNG remains the company’s strategic focus and is on‐track to deliver first LNG in 2012.

Next steps:Finalise development approvals to enable commencement of construction,Convert existing HOAs into definitive agreements,Raise project funding, andSecure gas for Train 2.

Current and future projects have strong economics and will be characterised by:Lower capital costs,Shorter development and construction timelines, Higher energy efficiency, andLower carbon emissions and lower overall environmental impact.

High‐calibre project partners and a driven team of experienced professionals will underpin our success.

Repeatable formula is underpinned by proprietary engineering, site selection, partner selection, and financing.

Project expansion, upstream integration and regional diversification underpin future growth options.

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Disclaimer

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The information in this presentation is not an offer or recommendation to purchase or subscribe for securities in Liquefied Natural Gas Limited (ASX:LNG) or to retain any securities currently being held. This presentation does not take into account the potential and current individual investment objectives or the financial situation of investors.

This presentation was prepared with due care and attention and the information contained herein is current at the date of the presentation.

This presentation contains forward looking statements that are subject to risk factors associated with the gas and energy industry. The expectations reflected in these statements are reasonable, but they may be affected by a range of variables that could cause actual results or trends to differ materially, including but not limited to: price and currency fluctuations, geotechnical factors, drilling and production results, development progress, operating results, reserve estimates, legislative, fiscal and regulatory developments, economic and financial markets conditions in various countries, approvals and cost estimates.

All references to dollars, cents or $ in this document is a reference to US Dollars, unless otherwise stated.


Liquefied Natural Gas Limited5 Ord Street

West Perth WA 6005+61 8 9366 3700

www.LNGlimited.com.au

LIQUEFIED NATURAL GAS LIMITEDCorporate Presentation October 2009

Gladstone LNG ProjectFirst LNG shipment in 2012

liquefied natural gas ltd first lng shipment in 2012

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