International Business House

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COURSE: LNG Trading and Operations

3 - 5 October 2018, Singapore


The LNG Market : Global Overview

Playing the Analyst

Browsing through a selection of recent real-life events and deals in the LNG markets, we will rate each of them: what are their impacts on prices, supply/demand balance, and global market dynamics?

-   West African integrated LNG project

A West African country is keen to replace its CAPEX-­‐intensive diesel-­‐fueled power generators by a

Combined Cycle Gas Turbine (CCGT) fed by an LNG FSRU terminal.

In two teams, one bullish and the other bearish, we’ll assess whether this project is going to fly.

-   Asian strip of cargos for a private player

An ambitious private consortium is keen to negotiate a strip of cargos into an Asian terminal. They approached a trading house. Is it the deal of the decade, or a beginner’s trap ?

In two teams, we’ll assess the potential sellers, and the limitations posed by Buyer’s conditions

(price, volumes, vessel size etc.)

LNG Trading & Risks

 -  Tender and  Netbacks

A Mediterranean buyer wants to organize a spot cargo tender. Atlantic prices are unusually high, while Asian prices are easing up as spring comes in. What are the chances that the Buyer can attract a cargo, and which sellers will be in a good position to strike a deal ?

In two teams, one working on behalf of the Buyer and the other working as a trader, we’ll assess the best period to sail towards the Med, and whether any ships are likely to cross Suez.

-   Incremental Spanish sale on the way to Greece

Buyer purchased from Seller a US cargo to Greece. Due to terminal limitations at delivery point, the vessel had to be shortloaded. One way to improve the economics would be to do a partial discharge in Spain. But are the extra costs worth it, can the partial cargo be hedged, and is the voyage put under too much pressure ?

In two teams, one working for Seller and the other for Buyer, we’ll discuss risks and rewards. 

LNG Operations

-   Demurrage : the Bill, please !

Our ship was kept longer than expected along the regassification plant’s jetty.

Using the port log, we’ll run the calculations and see how much money we can claim to our Buyer. 

-   Where to Load ?

One of our ships is back from Japan, currently on her ballast voyage in the Singapore Straits. Next unloading is in China, and base case is to load in Qatar. In our portfolio, we have several optimization opportunities at other loading ports. However, each of them has its own peculiarities. Which loading port seems the best choice ?  How to mitigate risks ?

-   Measurement & Testing : oops, we forgot something…

It was supposed to be the perfect back to back. But someone didn’t pay attention to the Measurement & testing clauses. Different temperature references, and the concept of vapor return seems absent in one of the contractual legs… Will the margin of the trade be preserved ? 

Trading & Shipping Agreements

-   Negotiating a Force Majeure Clause

The FM clause doesn’t seem to be fair… A big debate takes place between Seller and Buyer. In two teams, we’ll fight for our respective rights and try to end up with a balanced wording.

-   Finding Mistakes in a Confirmation Notice

The deal is done, and Seller has suggested a confirmation notice. But it seems that the draft was done a bit too fast before the weekend … Will you find the five omisisons or mistakes ? 

Long Term LNG Contracts


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