#115 September 2021 Economic and Social Contribution of Ichthys LNG in the Northern Territory Summary Presentation ACIL ALLEN#2Ichthys LNG, 2020-2030: The next chapter 15MT Ichthys LNG Production Forecasts, MT per annum 12MT 9MT 6MT 3MT Study Period ■LNG Condensate ■LPG OMT 2010 2015 2020 2025 2030 2035 2040 2045 2050 ACIL ALLEN #1 Largest ever investment by Japanese company in Australia #1 Largest ever investment project in the NT #3 10 Currently the 3rd largest oil and gas project in Australia This study will estimate the economic and social impact of the INPEX operated Ichthys LNG in the NT during the operational period of 2020-2030#3Economic Context#4Northern Territory Economic Context NT household consumption and business investment activity, $bn $35bn ■Household consumption ■Business investment $30bn $25bn $35bn $30bn NT Exports, $bn $35bn $30bn $25bn $25bn $20bn $20bn $20bn $15bn $15bn $15bn $10bn $5bn $10bn $5bn $10bn $5bn NT GTP*, Actual and Forecast, $bn $0bn $0bn $0bn 2001-02 2006-07 2011-12 2016-17 2021-22 2010-11 2012-13 2014-15 2016-17 2018-19 2010-11 2012-13 2014-15 2016-17 2018-19 *GTP Gross Territory Product ACIL ALLEN 4#5Northern Territory Economic Context NT Gross Value Added by Industry, 2009-10 and 2019-20 NT Total Employed and Unemployment Rate, Seasonally Adjusted NT Population Growth and Net Interstate Migration 6,000 8% Mining 160,000 Total employed (LHS) Unemployment rate (RHS) 7% 4,000 140,000 Public administration & safety 120,000 Health care & social assistance 100,000 Construction 3% 2% 6% 2,000 1% 5% 80,000 4% 14 Education & training Manufacturing 0 0% 60,000 3% -2,000 40,000 Professional, scientific and technical services 2009-10 ■2019-20 20,000 -1% 2% -4,000 -2% 1% 1% Net interstate migration (LHS) Population growth (RHS) Agriculture, forestry & fishing -6,000 -3% 0 0% $0bn $2bn $4bn $6bn $8bn 2001-02 2007-08 2013-14 2019-20 2001-02 2007-08 2013-14 2019-20 ACIL ALLEN 5#6Economic Contribution (2020-2030)#7Estimating the economic impact of Ichthys LNG to the NT economy ☐ Key assumptions Production Volumes by Commodity, MTPA Study period: 2020 to 2030 16 MT ■LNG Condensate ■LPG Average production per annum: ☐ LNG: 8.56 MT ☐ LPG: 1.58 MT Condensate: 2.8 MT All values are expressed in real Australia Dollar ($) terms with a base year of 2020 Price forecasts benchmarked to brent crude oil forecasts provided by INPEX. Flat real price growth forecasts have been used to isolate the real impacts 12 MT OPEX and CAPX Expenditure, $b $4bn ■CAPX OPEX $3bn $2bn 8 MT CAPEX and OPEX expenditure forecasts provided by INPEX Taxation estimates are based on the taxation laws at the time the study. Company tax estimates reflect the overall economics of Ichthys LNG over the study period 4 MT Forecasts do not include any potential future capital expansions ACIL ALLEN $1bn 0 MT $0bn 2020 2022 2024 2026 2028 2030 2020 2022 2024 2026 2028 2030 7#8Impact on Output: Exports and Domestic Activity ༢ Highlights Contribution to Australia's Exports, $bn Contribution to GTP, by Industry, $m $84.3 billion in exports between $10bn $400m All Others Manufacturing 2020 and 2030 $7.7 billion on average each year $350m Construction ■Rental, Hiring and Real Estate Services Professional, Scientific and Technical Services ■Transport, Postal and Warehousing $2.8 billion boost to the $8bn domestic economy between $300m 2020 and 2030 $251 million on average each year $250m $6bn Transport: $48.8m = 6.5% boost to the sector $200m Professional Services: $46.2m = 4.8% boost to sector $4bn Rental, Hiring and Real Estate $150m Services: $43m = 11.5% boost to sector Exports from the Project Ө accounted for 12% of Australia's oil and gas exports in 2020 ACIL ALLEN $2bn $100m $50m $0bn $0m 2020 2022 2024 2026 2028 2030 2020 2022 2024 2026 2028 2030 8#9Impact on Jobs Highlights Contribution to Employment, Northern Territory, Full Time Equivalent Jobs Ω 2,056 FTE jobs created or 3,000FTE supported each year between 2020 and 2030 ДА For every full time job employed on the Project, an additional 2.2 full time jobs are created or supported across the 2,500FTE NT economy on average over the study period 2,000FTE B The total number full time jobs created by the Project is greater than the average number of full time jobs in the NT Agriculture sector 38 The indirect jobs created by the Project on average each year is greater than the total number of full time employees in the NT Arts and Recreation Sector ACIL ALLEN 1,500FTE 1,000FTE 500FTE ■ Direct ■Indirect OFTE 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 6#10Impact on Incomes Highlights Contribution to Incomes, Northern Territory, Real Terms, $m $2.8 billion boost to wages and $350m ($ salaries in NT between 2020 and 2030, averaging $251m per ■ Direct Indirect annum $300m Wages and salaries directly paid by Project workers estimated to average $132m per annum, with a $250m further $118m per annum paid to workers employed indirectly as a result of the Project $200m The boost to wages and salaries = A is equivalent to an additional $150m $2,500 per annum for every full- time worker in the Territory $100m Increased incomes will support additional spending on goods and ភ services by Territorians - $50m potentially boosting retail spending by up to 7.7% each year $0m 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 ACIL ALLEN 10#11Impact on Taxation Payments to Commonwealth and NT Governments Highlights 圓 Taxation impact, by head of taxation (LHS) and flow of taxation revenue (RHS), Real Terms, $m x+ |·|· $7.1 billion in Commonwealth and Territory taxes potentially $1,400m $1,400m payable, primarily after 2024 ■Company tax ■GST Personal income taxes ■NT Payroll tax Taxation revenue flowing to NT Annual tax payments projected to peak at $2 billion in 2025 and ■Other NT taxes ■Taxation revenue flowing to other States and Territories $1,200m $1,200m 2026 $1,000m Almost $90m in payroll tax is projected to be paid to the NT Government, and an estimated $800m $225m in other NT taxes and charges and GST payments between 2020 and 2030 $1,000m $800m $600m $600m The estimated average taxation $400m $400m payable to the NT Government is worth $34.1m per annum. This is enough to fund the $200m $200m development of two new primary schools every year over the 10 year study period $0m $0m 2020 2022 2024 2026 2028 2030 2020 2022 2024 2026 2028 2030 ACIL ALLEN#12Impact of higher oil price outlook Highlights High Price Outlook - Impact on Output (LHS) and Taxation Payments (RHS), $m 目 The economics of the Project is highly sensitive to price changes $14bn $3,500m Base Case Direct Base Case Indirect Base Case Other NT taxes Base Case - NT Payroll tax High Case - Total Base Case GST $12bn $3,000m Base Case Personal income taxes Under higher oil price outlook (US$75), output is expected to increase 35% to $10.7 billion per annum between 2020 and 2030 $10bn $8bn Base Case Company tax High Case - Total $2,500m $2,000m Under the higher price outlook (US$75), taxation payments are $6bn $1,500m expected to increase by 61% to total $11.5 billion per annum between 2020 and 2030 ACIL ALLEN $4bn $2bn $1,000m $500m $0bn $0m 2020 2022 2024 2026 2028 2030 2020 2022 2024 2026 2028 2030#13Social Contribution (2020)#14Workforce perceptions of INPEX in the NT community In December 2020, ACIL Allen distributed a survey to INPEX's workforce in the NT to understand workforce perceptions of living in the Territory and the role of INPEX in the economy and community more broadly. A 265 respondents to the survey over a 4 week period with an average age of 41, predominantly male (77%), married (63%), with children (47%), home owners (63%) and active in the community (58%) 40% of respondents indicated that they lived outside of the Territory prior to taking up a role with INPEX 58% of respondents indicated that INPEX played an "important" or "very important" role in the NT economy 74% of respondents indicated they felt INPEX played a positive role in the community Benefits of living in the Northern Territory Outdoor lifestyle Urban density and congestion (or lack of) Weather and climate Employment and jobs Size of capital city Available amenities (parks, recreation) Access to interstae and overseas travel Social opportunities and events Social services Housing availability and quality Affordability and cost of living. I Crime and security 0% 20% 40% 60% 80% Role in local community Community sports as a player Involved in school fundraising or other school community activities Community services volunteering Community sports as a coach/administrator Member of community/not for profit boards and committees Involved in religious institutions 0 20 40 60 80 100 ACIL ALLEN 14#15Social Impact of INPEX in the Northern Territory Total NT demographic footprint of the combined INPEX and TRACE operational workforce D 550 INPEX and TRACE employees ! Estimated that every direct INPEX or TRACE employee contributes an additional 2.33 residents in the Northern Territory Estimated total NT demographic footprint of 1,832 people Up to an estimated 1,006 Territorians moved to the NT due to jobs on Ichthys LNG since first gas in 2018 Contribution to social services 3) 92 childcare places ACIL ALLEN +÷ x+ 318 primary school enrolments + 11,395 primary health enrolments 183 secondary school enrolments 50,862 volunteer hours valued at a $1 million contribution to the local community 15#16Ichthys LNG's infrastructure legacy#17Community infrastructure and programs Whilst not quantified in this study, there significant economic and societal benefits arising from the infrastructure and other programs developed by the Project NATION EMERGENCY DEPARTMENT Jenkins Road A high-grade road for the local community that alleviated pressure on roads in the Palmerston area during construction of the onshore processing facility at Bladin Point. Royal Darwin Hospital Helipad Provided a significant boost to the RDH's ability to support critical care in emergency response situations, including accommodating larger helicopters and landings 24-hours per day. Darwin Harbour Dredging A large dredging program costing approximately $1 billion was required to provide a safe shipping channel through Darwin Harbour to Bladin Point to enable shipments from Ichthys LNG. ACIL ALLEN Voluntary Offset Programs Facilitating research that aims to improve environment and conservation outcomes in the Northern Territory. Larrakia Ichthys LNG Foundation Trust Provides economic and social benefits for the Larrakia People over the life of the project. 17#18Case Study: Social benefits of the Centre for National Resilience to Australia ה (7) Avoided incidence of lockdown Prevented between $365.7m and $733.2m in lost economic activity Savings to the quarantine system The cost to develop a purpose-built facility of this specification would be significant $450 million of total benefits to Australia since opening Avoided mortality / morbidity Avoided between $37m and $74.1m in morbidity and mortality from a quarantine breach Enhanced amenity during quarantine Facilities at the CNR make it a more enjoyable place to serve a period of quarantine ACIL ALLEN Local Employment Estimated $46.5m in salaries and employment for over 750 people working for the NT Government or through its contractors More expedient repatriation The CNR has increased the capacity of Australia to repatriate nationals leaving overseas 18#19ACIL Allen is a leading independent economics, policy and strategy advisory firm, dedicated to helping clients solve complex issues. Our purpose is to help clients make informed decisions about complex economic and public policy issues. Our vision is to be Australia's most trusted economics, policy and strategy advisory firm. We are committed and passionate about providing rigorous independent advice that contributes to a better world. ACIL ALLEN