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Delhi Connector
Tellurian Midstream Group | April 2019
Solving the last mile problem
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
HaynesvillePerryville/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 T1-3Freeport T1-3
Sabine Pass T5-6Cameron T1-5
DriftwoodGolden Pass
CalcasieuPort Arthur
Elba Island
-
5
10
15
20
25
2017 2017-2025Growth
2025 2017 2017-2025Growth
2025 2017 2017-2025Growth
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
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bcf/d
Northeast production to continue to growPerfect complement to LNG demand
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Source: IHS-Markit Feb 2019 LT-outlook
0
5
10
15
20
25
30
35
40
Jan-
11
Jan-
12
Jan-
13
Jan-
14
Jan-
15
Jan-
16
Jan-
17
Jan-
18
Jan-
19
Jan-
20
Jan-
21
Jan-
22
Jan-
23
Jan-
24
Jan-
25
Appalachian production outlook (bcf/d)
Marcellus PA Marcellus WV
Utica Other Liquids focused gas production
Last mile problemYou can get to Houston or Perryville, but you still need more infrastructure to get to demand growth
Sources: ARI, Drilling Info
5
Carthage
Perryville
Transco St85
FGT Z3HSC
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/d
7.3
16.9
2017 2025
5.88.9
2017 2025
5.612.7
2017 2025
7.3 9.8
2017 2025
24.6
38.1
2017 2025Haynesville
50.6
86.4 35.8
2017 2025 Incrementalproduction
KMI: ~4.0 bcf/d
0.0
1.0
2.0
3.0
4.0
5.0
6.0
Del
iver
y
Take
away
Del
iver
y
Take
away
Del
iver
y
Take
away
Del
iver
y
Take
away
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 NetImbalance
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
6
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
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4
5
6
7
8
9
10
$(0.30)
$(0.25)
$(0.20)
$(0.15)
$(0.10)
$(0.05)
$-
Jan-
16
Feb-
16
Mar
-16
Apr
-16
May
-16
Jun-
16
Jul-1
6
Aug
-16
Sep-
16
Oct
-16
Nov
-16
Dec
-16
Jan-
17
Feb-
17
Mar
-17
Apr
-17
May
-17
Jun-
17
Jul-1
7
Aug
-17
Sep-
17
Oct
-17
Nov
-17
Dec
-17
Jan-
18
Feb-
18
Mar
-18
Apr
-18
May
-18
Jun-
18
Jul-1
8
Aug
-18
Sep-
18
Oct
-18
Nov
-18
Dec
-18
Jan-
19
Feb-
19
Mar
-19
Apr
-19
bcf
/d
$/m
mBt
u
Perryville Basis to HH Haynesville Production
The worst is yet to comeSouthbound capacity just starting to ramp up
Source: RS Energy Group
8
(8.0)
(6.0)
(4.0)
(2.0)
0.0
2.0
4.0
6.0
8.0
10.0
Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19
Cap
acity
and
Flo
w in
to N
orth
Lou
isia
na (b
cf/d
)
ANR CG Mainline NGPL TGP TGT Trunkline Total Southbound Capacity Annual Average Net Southbound Flows
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
1.9 8.7
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 Texas Transco St 85
Perryville
South LA
Katy/Ship
DCPLMap & Terms
DCPL route & potential interconnects
11
DCPL anticipated receipts
12
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.
DCPL anticipated deliveries
Note: Actual meter size/location to be determined after the open season closes, PGAP determines the shippers’ desired deliveries and verifies the interconnect with third-party pipeline.
13
Thank you
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