Tellurian : Citi Midstream/Energy Infrastructure Conference 2020 Presentation

Citi Midstream/Energy Infrastructure Conference 2020

August 12, 2020

Cautionary statements

Forward-looking statements

The information in this presentation includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are forward-looking statements. The words "anticipate," "assume," "believe," "budget," "estimate," "expect," "forecast," "initial," "intend," "may," "model," "plan," "potential," "project," "should," "will," "would," and similar expressions are intended to identify forward-looking statements. The forward- looking statements in this presentation relate to, among other things, future contracts and contract terms, expected partners and customers, the parties' ability to complete contemplated transactions (including, where applicable, to enter into definitive agreements related to those transactions), margins, returns and payback periods, future cash flows, production, delivery of LNG, liquefaction and regasification capacity additions, infrastructure growth, equity values, future costs, prices, financial results, liquidity and financing, including project financing, reaching FID, future demand and supply affecting LNG and general energy markets and other aspects of our business and our prospects and those of other industry participants.

Our forward-looking statements are based on assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions, expected future developments, and other factors that we believe are appropriate under the circumstances. These statements are subject to numerous known and unknown risks and uncertainties which may cause actual results to be materially different from any future results or performance expressed or implied by the forward-looking statements. These risks and uncertainties include those described in the "Risk Factors" section of our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, and our other filings with the Securities and Exchange Commission, which are incorporated by reference in this presentation. Many of the forward-looking statements in this presentation relate to events or developments anticipated to occur numerous years in the future, which increases the likelihood that actual results will differ materially from those indicated in such forward-looking statements.

Projected future cash flows as set forth herein may differ from cash flows determined in accordance with GAAP.

We may not be able to complete the anticipated transactions described in the presentation. FID is subject to the completion of financing arrangements that may not be completed within the time frame expected or at all. Achieving FID will require substantial amounts of financing in addition to that contemplated by the agreements between Tellurian and each of Total and Petronet LNG discussed in this presentation, and Tellurian believes that it may enter into discussions with potential sources of such financing and Total and Petronet LNG in order to achieve commercial terms acceptable to all parties. Accordingly, each of the final agreements may have terms that differ significantly from those described in the presentation. The differences may significantly affect the projected financial information included in this presentation.

The financial information included on slides 3, 5, 6, 7, 15, 18, 19, and 21 is meant for illustrative purposes only and does not purport to show estimates of actual future financial performance. The information on those slides assumes the completion of certain acquisition, financing and other transactions. Such transactions may not be completed on the assumed terms or at all. Actual commodity prices may vary materially from the commodity prices assumed for the purposes of the illustrative financial performance information.

The forward-looking statements made in or in connection with this presentation speak only as of the date hereof. Although we may from time to time voluntarily update our prior forward-looking statements, we disclaim any commitment to do so except as required by securities laws.

2

Tellurian value proposition (Nasdaq: TELL)

Developing a global natural gas business around Driftwood LNG ("DWLNG")

Our business

• Driftwood LNG: a 27.6 mtpa LNG export terminal in Louisiana(1)
• Pioneering management team that has built ~18% of global LNG capacity
• Premier global LNG partners: TOTAL, Bechtel, Baker Hughes and Chart Industries
• Deliver cleaner air, reduce carbon emissions & slow the pace of climate change

Tellurian investment case

• ~$2 bn of FCF at full operations of Driftwood LNG(2)
• ~$5-$7annual cash flow per share to TELL shareholders(2)
• Implied equity value of ~$14-$19/share at FID(3)

Notes:	(1)	EPC guaranteed capacity of 24.1 mtpa; nameplate capacity of 27.6 mtpa.
	(2)	See assumptions discussed in notes 1 and 3 on slide 15.
.	(3)	NPV of $5-$7 cash flow per share at commercial operations in 2026 discounted at 15% for the 40-year life of the plant and assuming no terminal value.

3

Driftwood LNG update

4

DWLNG update: ~30% cost reduction in Phase I

Driftwood model - Phase 1 capital costs(1)

(14.4 mtpa EPC guaranteed capacity)

$1,473/tonne(2)

$1,042/tonne(2)

	Previous estimate	Current
	(January 2020)
Notes: (1)	Includes upstream, Driftwood pipeline, liquefaction and owner's costs. Excludes financing costs.
(2)	Based on Phase I EPC guaranteed capacity of 14.4 mtpa (Phase I nameplate capacity of 16.6 mtpa).

■

■

■

■

■

Key Business Model Benefits

Phase 1: ~$1,000/tonne including upstream, pipeline and liquefaction

<$3.50/mmBtu projected LNG FOB U.S. Gulf Coast

Inviting partners on a cost-plus basis: only project globally with this pricing structure

Achieved optimization in Driftwood Pipeline, owner's costs

Deferred PGAP/HGAP pipelines

5

Driftwood LNG and pipeline capital for Phase I

$ in billions, unless otherwise noted

	Uses ($ bn)
	 Driftwood LNG terminal	$10.6
	 Owner's cost(1)	1.8
	 DWPL, upstream & other(2)	2.6
	Cost/tonne ($/tonne)(3)	$1,042
	 Financing costs and interest	1.8
	Total Uses	$16.8

Sources ($ bn)
 Driftwood partner equity	$6.0
 Tellurian pre-FID work contribution	0.6
 Cash flow from cargo ramp-up	0.5
 Debt	9.8

Total Sources

$16.8

At ~$1,000/tonne, Driftwood is among the lowest-cost global LNG projects

Notes:	(1)	Owner's cost for Driftwood LNG terminal construction.
	(2)	Other includes pre-FID development costs and G&A during construction.
	(3)	Based on Phase I EPC guaranteed capacity of 14.4 mtpa (Phase I nameplate capacity of 16.6 mtpa).

6

Driftwood expects to deliver LNG FOB at <$3.50/mmBtu

Integrated operations deliver lower costs

Gas

sourcing

LNG

plant +

pipeline(1)

Debt

service(2)

<

<

$2.00/mmBtu

$0.75/mmBtu <$3.50/mmBtu

Average cost on the water

$0.75/mmBtu

Notes:	(1)	Includes operating expenses for Driftwood LNG plant and Driftwood pipeline and G&A.
	(2)	For phase one: ~$9.8 billion of project finance debt amortized over 20-year period.

7

LNG macro update

8

China and India LNG demand resilient

China and India LNG imports up ~8% and ~21%, respectively, through July YoY

Chinese LNG imports

million tonnes/month

7 6.3

6	6.6		5.3	5.8		5.5		6.4	6.4
			5.1
5		4.4					5.3	5.0
	4.1			4.8
			4.7	4.8
4	4.4	4.4	4.3
			4.2
3

2

1

0

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2019 2020

Indian LNG imports

million tonnes/month

7
6
5
4
3		2.8	2.4					2.7
2.3					2.3
		2.1	1.9
2
					2.4
				2.0	1.9	2.0	1.9	2.1	2.0	2.2
	1.7	1.5	1.8	1.5
1
0
Jan	Feb Mar	Apr May	Jun	Jul Aug Sep	Oct	Nov	Dec
							2019		2020

Source:

IHS Markit.

9

Emerging Asian markets are demand pull

53% of 2020 LNG demand growth from China + India

Over half of new import capacity is in China + India

2020 LNG trade through July		Regasification capacity additions
million tonnes		million tonnes

Source:	IHS CERA.
Note:	Includes existing and under construction regasification projects, including unutilized U.S. projects.

10

LNG market recovering from June bottom

Monthly global LNG trade and capacity

million tonnes/month

39	2020E export capacity
37	35.3
35
33	2020E LNG trade
31	2019 LNG trade
29

27

25 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Sources:

IHS CERA, Tellurian analysis.

LNG production capacity at year end

Expected % increase over prior year end million tonnes/month production capacity

1.3%

37.8

2.8%

37.3

36.3

2019 2020 2021

11

Entering 5-year starvation; expect rising price

Global liquefaction capacity additions (mtpa)

~30 mtpa capacity additions		~146 mtpa capacity additions		~53 mtpa capacity additions		Limited capacity additions(1)
1.6% per annum		8.3% per annum		2.3% per annum		0.8% per annum

Expected delays

						29	30	39							34
					26
						22					18
13												11
			8						10		10
4	(0)	5						4			1		--
												(5)
																		(14)
2011	2012	2013	2014	2015	2016	2017	2018	2019	2020	2021	2022	2023	2024	2025	2026	2027	2028	2029	2030

JKM annual average:

$14.04	$15.12	$16.54	$13.85	$7.45	$5.73	$7.13	$9.74	$5.49
Sources:	Wood Mackenzie, Tellurian analysis.
Note:	(1) Capacity additions for projects that have reached FID only.

12

>100 mtpa additional construction needed

Recent demand growth rates imply the world will have LNG capacity constraints by 2021

mtpa					Liquefaction capacity
900					required by 2025(1)
800		9.3% p.a. growth rate		8.0%(2)	~175 mtpa
700			6.6%(3)
600			~130 mtpa
500

400

300

200																	Under construction(4)
100																	In operation
0
2015	2016	2017	2018	2019	2020	2021	2022	2023	2024	2025	2026	2027

Sources:	Wood Mackenzie, Tellurian Research.	(4) Assumes 112 mtpa of projects under construction coming online by 2025, including Portovaya, Petronas FLNG 2, Coral FLNG, Petronas
Notes:	(1)	Assumes 86.5% utilization rate.	FLNG 2, Tortue LNG, LNG Canada, Calcasieu Pass, Mozambique LNG, Golden Pass LNG, Arctic LNG 2 and NLNG T7.
	(2)	Assumes 8.0% annual demand growth rate from 2020-2025.
	(3)	Assumes 6.6% annual demand growth rate from 2020-2025.

13

Driftwood LNG overview

14

Positioned to deliver $5-7/sh of cash flow (1)

Tellurian ownership structure(2)

Illustrative cash flow calculation to Tellurian

Driftwood Holdings

Production		Pipeline		LNG
Company		Network		Terminal

Notes:

(1) Annual cash flow per share based on the following assumptions, among others: (a) projected $2.5 billion annual cash flow to Tellurian

at the midpoint of the range, (b) less estimated interest expense of ~$200 million related to Tellurian Marketing's acquisition of 2 mtpa of capacity at Driftwood Holdings funded by $1 billion in convertible debt with terms of 11% paid-in-kind ("PIK") interest during construction and 11% cash interest after construction, (c) ~383 million shares outstanding after issuance of ~20 million shares pursuant to Total common stock purchase agreement dated April 3, 2019, conversion of ~6.1 million shares of existing convertible

	~13.6 mtpa
x	52 conversionmmBtu

1. $3.50 margin

• $2.5 billion annual cash flow(3)

preferred stock issued to Bechtel and conversion of outstanding stock options and warrants for ~35 million shares, and (d) total Driftwood LNG production at nameplate capacity of 27.6 mtpa.

1. Pro forma construction ownership, including $7 billion investment from equity partners and final investment decision on five plants.
2. Before estimated ~$200 million interest expense related to $1 billion convertible debt financing.

15

Driftwood LNG's ideal site for exports

Access to pipeline infrastructure

Access to power and water

Support from local communities

Site size over 1,000 acres

Insulation from surge, wind and local populations

Berth over 45' depth with access to high seas

	Artist rendition
 Fully permitted	 30% engineering complete
 EPC contract signed	 Shovel ready project

16

Bechtel LSTK secures project execution

Driftwood EPC contract costs ($ per tonne)

$710	Increase from price refresh
				 Leading LNG EPC contractor
	$500	$510		~$560	― 44 LNG trains delivered to 18
			customers in 9 countries
$700			$390		― ~30% of global LNG liquefaction
				capacity (>125 mtpa)
				~$550
	$490	$500		Tellurian and Bechtel relationship
	$380	
				― 16 trains(1) delivered with Tellurian's
					executive team
Stage 1	Stage 2	Stage 3	Stage 4	Total	― Invested $50 million in Tellurian Inc.

Capacity	11.0	5.5	5.5	5.5	27.6	 Price refresh in April 2019 resulted in ~2%
(mtpa)
		Plants 1&2	Plant 3	Plant 4	Plant 5		increase after ~24 months
Sources:	Tellurian-Bechtel agreements; Bechtel website.
Note:	(1) Includes all trains from Sabine Pass LNG, Corpus Christi LNG, Atlantic LNG, QCLNG and ELNG.

17

Value to Tellurian Inc.

Every $1.00 reduction in gas costs or increase in LNG price adds $1.85/share in cash flow in 5-plant case

			Base case					3 Plants		5 Plants
USGC netback	Cost of LNG(1)			Margin		Cash flows(2)(3)(4)
($/mmBtu)		($/mmBtu)			($/mmBtu)			$ millions ($ per share)
Tellurian capacity						6.6 mtpa		13.6 mtpa
based on 27.6 mtpa
production profile
$5.00			$3.50	$1.50		$340	($0.89)	$880 ($2.30)
$7.00			$3.50			$3.50		$1,030	($2.69)		$2,300 ($6.00)
$9.00			$3.50	$5.50		$1,710	($4.46)	$3,710 ($9.68)
$11.00			$3.50	$7.50		$2,400	($6.26)	$5,130 ($13.38)

Notes:	(1)	$3.50/mmBtu cost of LNG FOB Gulf Coast assumes $2.00/mmBtu cost of gas at Driftwood LNG terminal.
	(2)	Annual cash flow equals the margin multiplied by 52 mmBtu per tonne; does not reflect potential impact of management fees paid to
		Tellurian nor G&A.
	(3)	Annual cash flow per share based on ~383 million shares outstanding after issuance of ~20 million shares pursuant to Total common
		stock purchase agreement dated April 3, 2019, conversion of ~6.1 million shares of existing convertible preferred stock issued to Bechtel

and conversion of outstanding stock options and warrants for ~35 million shares.

1. Assumes Tellurian Marketing acquires 2 mtpa of capacity at Driftwood Holdings, financed by $1 billion in convertible debt funding with 11% paid-in-kind ("PIK") interest during construction and 11% cash interest after construction.

18

Returns to Driftwood Holdings' partners

		U.S. Gulf Coast netback price ($/mmBtu)
	$5.00	$7.00	$9.00	$11.00
Driftwood LNG, FOB U.S. Gulf Coast
$(3.50)	$(3.50)	$(3.50)	$(3.50)
($/mmBtu)
Margin	$1.50	$3.50	$5.50	$7.50
($/mmBtu)
Annual partner cash flow(1)	$80	$180	$285	$390
($ millions per tonne)
Cash on cash return(2)	16%	36%	57%	78%
Payback(3)	6	3	2	1
(years)

Notes:	(1)	Annual partner cash flow equals the margin multiplied by 52 mmBtu per tonne.
	(2)	Based on 1 mtpa of capacity in Driftwood Holdings; all estimates before federal income tax; does not reflect potential impact of management fees paid to Tellurian.
	(3)	Payback period based on full production.

19

On path to deliver LNG from Driftwood

	Fully-	FERC & DOE
Premier site	wrapped EPC	Financing	Construction
approval
	contract

Complete	Value creation catalysts
	 LNG market recovery from COVID-19
	with JKM approaching $5/mmBtu
	 Marketing of new commercial terms
	 Announce commercial agreements
	 Secure project financing
	 Final investment decision (Phase I)

20

Key investment highlights

Driftwood LNG is shovel ready, all permits secured

Engineering ~30% complete, >$150 mm invested in EPC Phase 1 low-cost capital ~$1,000/tonne

LNG delivered FOB U.S. Gulf Coast <$3.50/mmBtu to maximize margins in growing LNG market

Premier management team with performance track record

21

Contact us

• Matt Phillips
  Director, Investor Relations & Finance [phone] [e-mail]
• Joi Lecznar
  SVP, Public Affairs & Communication [phone] [e-mail]

Social media

@TellurianLNG

22

Appendix

23

Tellurian commercial progress

Total Driftwood equity investment and SPA

Tellurian Marketing investment in Driftwood

• On July 10, 2019, Total agreed to make a $500 million equity investment in Driftwood project and to purchase 1 mtpa of LNG
• Total also agreed to purchase 1.5 mtpa of LNG from Tellurian Marketing's LNG offtake volumes from the Driftwood LNG export terminal
  ― FOB, minimum term of 15 years
  ― Price based on Platts Japan Korea Marker ("JKM")

• Tellurian Marketing to purchase an equity interest(2) in Driftwood project and 2 mtpa of LNG with anticipated private equity funding
• • Tellurian's LNG volumes from Driftwood project will increase to 13.6 mtpa at full development

Common stock purchase agreement with Total

• Total to purchase ~20 million additional shares in Tellurian for $200 million upon(1):
• • Final investment decision ("FID")
  • Tellurian's purchase of 7.2% of Driftwood equity

Notes:	(1)	Common stock purchase agreement executed with Total Delaware, Inc. at $10.064/share.
	(2)	Tellurian Marketing to purchase 7.2% equity interest in Driftwood project.

Tellurian MOU with Petronet

• On September 21, 2019, Tellurian and Petronet LNG Limited INDIA ("Petronet LNG") signed a memorandum of understanding ("MOU") for up to five million tonnes per annum of liquefied natural gas ("LNG") through an equity investment in Driftwood

24

Global energy needs require natural gas

The shifting landscape of energy consumption

Tonnes8 oil equivalent/capita

Drivers of shifting landscape

35% Non-OECD energy consumption growth rate was

7

31%

30% ~13x that of OECD's over the past decade

6		23%		2030 target for	24%
			gas' share in both
5
		19%	India and China's
4				energy mix
7.0			15%	15%
3
2		4.0	4.3	6%	7%
1					2.3	0.9
-				0.6
U.S.	Europe	JKT	India	China	Rest of
		2018 energy consumption per capita	Asia
		Gas' share of 2018 total energy mix
Sources:	BP Statistical Review of World Energy, Tellurian Research
Note:	(1) Based on total 2018 energy demand for non-OECD countries and 0.855 mtpa LNG per 1 million tonnes oil equivalent.

25%	 Despite massive energy growth, natural gas is
	just 22% of non-OECD's energy mix, while coal's
20%	share is 36%

• If gas moved to just 25%, over 200 mtpa of LNG

15% would be required to meet demand(1)

10% Population and economic growth to encourage further energy consumption growth in Asia

5%

 9 of 10 world's most polluted cities located in just 0% two Asian countries (India & China)

 A drive towards cleaner energy sources will require both natural gas and renewables

25

China & India: ~90 mtpa growth potential

LNG demand growth (2019-2025)

mtpa

	45.5	43.3
15.3		21.0
India		China

Based on consultant forecast(1)

Based on existing and planned infrastructure(2)

Sources:	BP Statistical Review of Energy, WoodMac, SIA, Tellurian Research.
Notes:	(1) Based on WoodMac's LNG demand outlook for both India and China.

1. Based on existing, firm and likely regas capacity in addition to downstream pipeline infrastructure projects, per project sponsors.
2. Based on 2018 coal-fired power generation.

Key growth drivers

• Infrastructure:
• • ~2x growth in India's pipeline grid by 2025
  • ~2x growth in India's regas capacity by 2025
  • ~1.5x growth in China's pipeline grid by 2025
  • ~2x growth in China's regas capacity by 2025
• Policy:
• • India and China's infrastructure growth allows each to remain on track to reach their targets of 15% for gas' share in the energy mix by 2030
• Latent demand:
• • India and China's total latent demand for cleaner energy is equivalent to ~885 mtpa(3)

26

India's targets suggest even higher gas use

India natural gas demand - primary sources

mtpa

Incremental supply required for 15% target(1)	153
Uncontracted LNG
Contracted LNG
Indigenous Production
	75

		70	28
	48	15
41
7	23	15
8
19
14		36
	32
19	21
2018	2020	2025	2030

India's gas demand drivers

• Prime Minister Modi has set a target of 15% for natural gas' share of India's energy mix by 2030
• ~$100 billion in energy infrastructure investment currently underway(2)
• Industrial use will lead gas demand growth as India seeks food security for ~1.3 billion people
• • India seeks to become a self-reliant supplier of urea, triggering a revival of closed fertilizer plants and the conversion of naphtha-based plants to gas
• India's build-out of city gas distribution networks is expected to connect an incremental ~35 million homes to the national gas grid

Sources:	Wood Mackenzie, BP Energy Outlook 2019 Edition.
Notes:	(1)	Based on BP Energy Outlook's estimate of India's total primary energy consumption and Prime Minister Narendra Modi's 15% target for
		natural gas' share of India's total primary energy consumption by 2030; 52.17 mmBtu per tonne of LNG.
	(2)	Per India Oil Minister Dharmendra Pradhan.

27

India is rapidly building out gas infrastructure

Sharp increase in LNG and gas-related infrastructure will tap into significant latent gas demand

India's emerging regas & gas transport infrastructure	India's regasification capacity buildout
	mtpa
				Existing
				Under construction		78
				Likely in-service	69
				21
	57		12
					19
							57	57
	38

Today

2025

2030

Sources:

Wood Mackenzie, BP Energy Outlook 2019 Edition, Tellurian Research.

28

New Asian markets grow ~41 mtpa by 2025

Emerging markets could add the equivalent of another South Korean market by 2025

• Bangladesh, Malaysia, Pakistan, Thailand:
• • > 32% gas market penetration, declining indigenous gas production and strong economic growth increase the call for imports
• Philippines, Taiwan, Vietnam, Indonesia:
• • <17% gas market penetration with growing gas demand for power, especially as coal and nuclear lose favor

LNG demand by region

mtpa

600

500

400

300

200

100

-

2019 2020 2025 2030 JKT Other China + India New Asian markets

Sources:	Wood Mackenzie, FGE.
Note:	New Asian markets include: Indonesia, Malaysia, Pakistan, Philippines, Singapore, Sri Lanka, Thailand and Vietnam.

29

Environmental and social leadership

Driftwood LNG project expected to reduce lifecycle carbon emissions and support local communities

Lifecycle emission reduction

• Provide an outlet for currently flared natural gas in the U.S.
• Replace coal and oil in emerging markets to reduce carbon emissions and improve air quality
• Facilitate growth of renewables by providing energy reliability

Sustainable development

• Liquefaction facility to have near zero methane emissions
• Use the latest equipment, technology and monitoring systems to minimize emissions
• Conduct green completions in upstream operations

Social engagement

• Extensive community outreach and support programs
• Create 350 permanent and 6,400 construction jobs
• Fund climate change research at Columbia University

30

LNG's role in the energy transition

Today: Reduce carbon intensity, improve air quality

Future: Net zero carbon emissions

Facilitates coal-to-gas

switching

Supports growth of

renewables

Cleaner heavy

transportation fuel

• Increasingly cost-competitive with coal
• Reduces carbon emissions by up to 50%
• Reduces SOx, NOx and particulate matter

Carbon capture,

utilization and storage

• Grid reliability
• Seasonal storage
• High-temperatureheat for industry
• Winter heating for buildings

Carbon offsets

• Long-haulLNG trucking in areas without electrification
• LNG-poweredvessels support IMO 2020 compliance

31