LNG Trading & Optimisation Virtual Training Course
CONDUCTED OVER FOUR HALF-DAY SESSIONS
The LNG Trading & Optimisation course aims to give an overview of spot and short-term trading and LNG cargo diversions and the activities involved and team work needed to ensure smooth controlled trading and optimisation of LNG cargoes. It is designed for delegates who are either in LNG trading teams or are working in support functions, such as cargo operations, shipping, finance, risk management and legal.
2022 has delivered a big shock to some LNG traders who have seen extreme price spikes, pricing volatility and lack of liquidity. Suddenly LNG trading has broken the established rule book as it tries to accommodate and adapt around a very difficult business environment triggered by the Russian invasion of Ukraine.
It will look at physical trades and operations as well as an overview of price and volume risk management. It will illustrate how to build a practical risk matrix for trading which can be adapted to any organisation that is trading or starting to trade LNG.
Real life examples will be used to illustrate how to trade LNG. The value of negotiating flexibility into agreements will be discussed to show how it creates and protects value.
Organised by:
Course Objectives
- To provide the structure for a professional physical and price risk management approach for LNG trading companies as 2022 is stress testing LNG trading and optimisation to new limits
- To understand LNG trading – what it is, players involved and current trends as the business matures
- To understand the mechanics of LNG diversions, how to structure and negotiate them
- To understand Master Sales Agreements and Confirmation notices
- To practice trading an LNG cargo and optimising it for value (based on a real cargo diversion)
Course Methodology
The course will be taught via a video conferencing platform, covering a combination of theoretical and practical case studies. The course instructor will adopt an interactive approach which will encourage active participation, delegate engagement and contribution through live sharing of views and experiences. The case study will convey real life scenario challenges in portraying or simulating the participants’ working environment.
Course Director
Dr. Patricia Roberts
Director, LNG Worldwide
Dr. Patricia Roberts is the Director of LNG-Worldwide Ltd since 2005. It is a consulting company offering commercial and practical advice in the gas/LNG supply chain globally.
Dr. Roberts spent 7 years, out of her 24 years with the Shell Group of companies in the front line, building the Shell Group’s global LNG business from both as an aggregator and as a long-term traditional offtaker from LNG projects, which included term purchase agreements in Oman, Nigeria, Qatar and Trinidad.
Current areas of consultancy expertise include fundamental analysis, supply/demand/price forecasting, Buyers’ new market entry, FSRUs as a fast-track to market, Sellers new project developments, LNG trading, LNG contracting advice and deal negotiations, creating, managing and optimizing LNG supply portfolios and helping to resolve disputes.
Course Outline
+ − DAY 1
- What is LNG trading and LNG optimisation of cargoes?
- Who are the various players, their activities and likely trends for the business 2022- 2025?
- Impact of the Russian invasion of the Ukraine- what are the new risks emerging for LNG trading
- Impact of USLNG in the global market
- Organisations and commercial models for trading using examples of NOCs, IOCs, traders, utilities and banks.
- Trading in Asia : – changes from Covid 19, expiring LNG contracts and rising prices
- Trading in Europe: the new LNG premium import market – how long may it last? Pricing at hubs and interface of LNG with pipeline gas in key downstream markets – what has 2022 taught us?
- Interplay between Asia and Europe for spot LNG trading and arbitrage opportunities
- Contractual MSAs – key features. Interactive negotiation of key elements
- LNG spot pricing trends, development of Hub pricing and liquidity to trade
- Identifying, measuring and managing LNG cargo trading risks
+ − DAY 2
- Developing a Risk Matrix
- Operational issues and an introduction to risk management for both physical risks and financial risks
- Hidden risks and exposures
- Developing an LNG risk register including:
- Physical risks
- Volume shortfall
- Ship compliance
- Product Quality
- Scheduling
- Force Majeure
- Contractual Risks
- Governing law
- Contractual mismatches between purchase and sales contracts
- Financial Risks
- Pricing
- Credit
- Working capital
+ − DAY 3
MEASURING RISK
- Profitability vs. impact analysis
- Risk matrix
- Assessing tangible and intangible risks
MITIGATING RISK
- What are low probability/high impact risks that could impact your business?
- What does the risk matrix look like for your company?
- How much risk do you want to manage, how much should you lay off to other parties?
- What does your counterparties’ risk matrix look like?
- For the risks you need to manage: –
- What mitigants can you put in place?
- Risk management instruments
- Company portfolio
- Fully integrated supply chain
- Liquidity in downstream markets
- Seasonal or structural risks vs. occasional single cargoes
- Trading controls, delegated authorities
+ − DAY 4
EXERCISE: OPTIMISING SHORT-TERM LNG AREEMENTS: THE LIFE OF A DIVERTIBLE LNG CARGO
This session demonstrates how to manage the operational and contractual options for a divertible LNG cargo, which is loading in a dynamic business environment.
This is based on an actual cargo experience. This interactive role-play in small groups allows participants to practice: –
- Assessing the risk / reward to divert the cargo from its original destination
- Managing the day-to-day cargo operational issues
- Responding to new opportunities that arise
- Balancing new risks and rewards
- Negotiating with various new counterparties along the LNG supply chain
- Managing relationships
- Monitoring expected profitability versus actual results
Who Should Attend
- LNG Traders
- Risk Management Managers
- Commercial Managers
- Finance/ Revenue Managers
- Business Developers of new LNG projects
- Business Developers focusing on new market entry and the value of LNG trading to support it
- Commercial Negotiators
- Commercial Advisors
- Strategy and Commercial Planners
- Economists and Analysts
- Regulators & Government Officials
- LNG Cargo Operators
- LNG Shipping Professionals
- Legal Counsel and Lawyers
The course will be taught live via a video conferencing platform, over four sessions of four hours each. The course director will adopt an interactive approach for active participation and delegate engagement.
Contact Us
+65 6338 0064
lngto@ccacademy.co