1. A Global Energy Strategy The Ras Laffan Project Finance 570 – Spring ‘09 Dr. Joe Greco California State University, Fullerton Present by: Mark Skrenes Chris McMartin Eduardo Gutierrez Trung Nguyen Chun Lin 1

2. About Us We are the financial analysts at Broadway Value and Growth Fund Our objective is to find investments with an attractive risk vs. reward profile 2

3. Project Background A liquefied natural gas (LNG) joint venture Exclusive rights to the world’s largest undeveloped natural gas reserve  6,000 square kilometers  9% of the world’s proven reserve A 30-year, $3.75 billion budgeted project Already have committed buyer (Kogas) 3

4. LNG A clean alternative energy source Made by freezing natural gas to -260 0 F, reducing it to a liquid 1/600 th of its original volume. Stored under pressure and can be transported safely worldwide via tanker LNG facilities are cost intensive 4

5. LNG 5

6. The LNG Industry Most LNG is sold to utility companies Utility companies need a stable LNG supply to support electrical generation and/or natural gas delivery LNG demand growth rate: Worldwide:about 3% a year since 1980 Japan:about 6% a year since 1980 Korea:over 20% a year since 1987 6

7. The LNG Industry There is no spot market for LNG Pricing is determined using the market prices for competing commodities (e.g. oil) Comparable LNG prices for delivery to Japan & Korea 7 Borneo$3.20/MMBTU Australia$4.60/MMBTU Alaska North Slope$4.80/MMBTU Indonesia (Natuna)$5.90/MMBTU Ras Laffan$3.88/MMBTU

8. Project Status Construction is underway Contracts were awarded to top-notch contractors at low cost Issuing bonds to finance the project $400 mil. mature in 2006 at 7.6% $800 mil. mature in 2014 at 8.3% 8

9. Project’s Structure 9

10. Equity Investors (30%) State of Qatar Qatar General Petroleum Ras Laffan LNG Co. Mobil Corporation Mobil QM Gas (fully-owned) (66.5% ownership)(26.5% ownership) 10 $704M$302M (fully-owned)

11. Creditors (70%) Franc e ECA Commercial Banks Bonds Due 2006 11 Italy ECA U.K. ECA U.S. ECA Japan ECA $764M $383M $400M Bonds Due 2014 $800M

12. Major Customer (35% ownership) Republic of Korea Korea Electric Power Corp. Korean Municipalities Korea Gas Corporation (51% ownership) (50% ownership) (15% ownership) 12

13. Product Flow Ras Laffan Facilities Korea Electric Power Corp. QatarGas LNG Tanker Terminal KoGas LNG Tanker Fleet Korean Homes and Businesses North Field Gas Reserves (Qatar) KoGas LNG Tanker Terminal (Korea) 13 (note - QatarGas ownership: Qatar 88%, Mobil 12%)

14. Cash Flows Commercial Banks Ras Laffan Trust (New York) Mobil Corp (Debt Facility) Export Agency Credit Facilities (5) (“take or pay” guaranteed) Bond Trustee Bond Holders Ras Laffan LNG Co. 14

15. Delivery Timeline 4.8 MMTA/year from 2002 0.6 MMTA in 1999 15

16. Decision Criterias & Risks 16

17. Major Alternatives 17 Invest Not Invest

18. Our Decision Criteria Proven Commodity Vested Project Sponsors Strong Demand Well-structured Project Well-mitigated Risks Risk Premium 18

19. Basic Issues Force Majeure Risk Qatari Legal System InfrastructureDefault Risk Low High Importance Urgency 19

20. Immediate Issues Foreign Exchange Risk Joint Venture Risk Oil Price Cash Flow Low High Importance Urgency 20

21. Default Risk Regional InstabilityProduction Capacity Breach of ContractNo Perfected Interest 21

22. Risks Mitigation 22

23. Basic Risks Mitigation Force Majeure –Qatar dependent on U.S. military support –Transportation – no tanker ever lost at sea, proven transportation methods 23

24. Basic Risks Mitigation Qatari Legal System –Off-shore New York Trust account held by Credit Suisse 24

25. Basic Risks Mitigation Infrastructure –Currently on schedule –Experienced, Leading international construction team –Mobil human capital –Proven technology –5 year natural gas production history 25

26. Basic Risks Mitigation Default Risk –KoGas owned 50% by Republic of Korea, 34.7% by Kepco –Need to insure reliable and continuous supply as its needed for power generation –Korea greatly expanding LNG consumption –Vested interest by project sponsors, ECAs –Both customer and supplier have invested Billions –Intercreditor Protection Agreements 26

27. Immediate Risks Mitigation Foreign Exchange Risk –If Korean Won depreciates against the U.S. Dollar, utility prices can be raised to cover U.S. dollar payments 27

28. Immediate Risks Mitigation Joint Venture Risk –Mobil strategic objective is to increase its LNG market share –Qatar is seeking to diversify its economy –Huge capital investments by all parties in Billions of U.S. Dollars 28

29. Immediate Risks Mitigation Oil Prices –Minimum quantity SPA –Mobil $200 million loan fund 29

30. Immediate Risks Mitigation Cash Flow –Project is strategically important to all parties –Take or Pay SPA (SPA becomes a bankable asset) –Long-term contract of up to 25 years –Debt Service Coverage ratio is strong even if oil prices fall –Mobil Experience –Increased quantities purchased by Kogas result in economies of scale 30

31. Projection - Reduced Market Price 20012002200320042005200620072008 Price $2.48$2.53$2.58$2.63$2.69$2.74$2.79$2.85 Revenue $645.60$811.60$825.80$838.40$855.50$867.50$881.40$899.30 Cash Flow $295.34$527.30$533.89$529.60$545.19$552.25$544.04$561.28 Debt Coverage Ratio 1.161.301.361.401.491.562.022.14 31

32. Conclusion 32

33. Our Decision Criteria »Proven Commodity »Vested Project Sponsors »Strong Demand »Well-structured Project »Well-mitigated Risks »Risk Premium 33

34. Conclusion Object of the project: North Field Sponsors of the Project Kogas Long term supply & Purchase Agreement Demand for LNG 34

35. Conclusion Security Trust Intercreditor Protection Agreements Contractor for the project 35

36. Conclusion Inherent Risks Geopolitical location of Qatar Qatari Legal System Breach of contract by Kogas Expose to currency risks Contractual Incompleteness 36

37. Bonds Comparison 37 Source: Treasury Department

38. Bonds Comparison 38 Source: Treasury Department

39. Questions? 39