Elixir Energy : QUPEX Presentation

1.

The desired energy

transition is very hard

• A wide variety of challenges - physical, economic and political - to the desired energy transition
• Increasingly being recognised by various (but not all) parties
• Gas is not optional - demand will in fact grow

2.

LNG demand forecast

to rise

• Multiple industry and Government parties forecast growing LNG demand
• Asian demand particularly strong
• Australian security of supply increasingly valued

3.

East Coast Australia

gas supply crisis

• The long recognised supply crunch is nearly upon us
• To date Govt actions and inactions have arguably increased risks
• Current prices of >A$12 expected to be a long term floor

The Uber-realists

Vaclav Smil:

"Since Kyoto in 1997, there has been no absolute worldwide

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decarbonization. In fact the very opposite is the case….

In 2022 the world consumed nearly 55% more energy locked in fossil carbon than it did in 1997….

In that quarter century, the world has substantially increased its dependence on

fossil carbon….

Responsible analyses must acknowledge existing energy, material, engineering, managerial, economic and

political realities".

Jeremy Grantham:

"Indeed, the long-term correlation between energy use and GDP growth is over 0.95 (see Exhibit 1).

That is the equivalent of saying that since the industrial revolution - which was really based on the introduction of fossil fuels into our economy - almost all our gains have been dependent on increased resource use.

Without new sources of effective energy, cheap and in vast quantities,

there would have been very little science, and very little productivity".

• The now imminent East Coast gas supply crunch has been forecast for some time

• It is almost upon us - a cold winter and

falling Gippsland supplies could hit this year

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• Demand destruction has happened but cannot keep pace with falling supply
• Only one FSRU project FID'ed (but with an unpredictable owner) - the others face material political and financing challenges
• Any new gas material gas supplies from NSW and Victoria seem highly unlikely
• Although multiple constraints on more supply from Queensland - physical capacity, State politics, geo-politics, sovereign risk, etc - there are very few alternatives

Source: ACCC