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19-07-2018 (Singapore)

P52249 Advanced LNG Pricing
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Advanced LNG Pricing

19 – 20 July 2018, Mandarin Orchard Singapore, by Meritus

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Team Savings: Register 2 Delegates & the 3rd Comes free!

overview

Key Learning Outcomes

  • Corporate LNG pricing strategies
  • Pricing methodologies in various markets
  • Price negotiation – critical considerations
  • LNG Price reviews and reopeners
  • Price Hedging
  • LNG Risk & Stress Tests
  • With Case Studies and Excel based exercises on:
  • Practical examples of how markets work
  • Calculating price slopes, proxy curves, etc
  • Designing the price clause in LNG contracts
  • LNG price review case study
  • Calculating financial hedges
  • Scenario and stress testing – creating an implementation strategy

Who Should Attend

Any executive from LNG Suppliers, Traders, Importers, End Users and Financiers involved in pricing negotiations and decisions, including but not limited to

  • Marketing, Sales and Business Development
  • Contracts, In house Counsel and Pricing specialists
  • Commercial, Procurement and Financial controllers

pricing

Packages Price
2 Day TrainingSGD $3495Early Bird

Early Bird Rate: Register and Pay On or Before 18 May 2018

Register 2 Delegates & the 3rd attends FREE!
Group rate is based on normal rate of 2-day main conference package only.
For Group Registrations, email register@ibcasia.com.sg or call +65 6508 2401

 

  • Special Group Discount pricing is applicable to groups of 2 or more delegates from the same organisation registering for the same event, at the same time.
  • Fee stated is the discounted price PER DELEGATE. Only one discount applies – either the early bird rate OR the Special Group Discount.
  • All fees stated include luncheons, refreshments and complete set of documentation. It does not include the cost of accommodation and travel.
  • A 7% Goods & Services Tax (GST) is applicable to all Singapore based companies for Singapore venue.

trainer

Christopher Lennon MBA, LLB, DipICArb, FCIArb, AIPN

Director, Stone Falcon Corporate & Legal Consulting Ltd

Agenda

TOPIC 1: GEOPOLITICS AND THE INTERNATIONAL LNG INDUSTRY:

  • Impacting and influencing factors on supply and demand
  • Understanding competition and market behavior (strategic perspective)
  • Oligopolistic market behavior – a danger for price regulation?
  • The location of the main suppliers (producers)
  • Storage capacities (level of inventory) and arbitrage
  • The pricing ramifications of flexible vs. inflexible supply (LNG cargos; pipeline transmission)
  • Traditional investment criteria
  • ‘Spot’ and short term trades – what does a more flexible market mean for the global LNG market?
  • Market classifications – gas on gas; indexed pricing to other fuels/substitutes; oil linked; regulated

TOPIC 2: CORPORATE LNG PRICING STRATEGIES

  • How global short-term pricing is developing (Henry Hub, NBP, TTF, JKM, EAX, JOE)
  • Equity purchase agreements
  • LNG flexibility – a key competitive factor?
  • Embedding price clauses to reflect flexibility value
  • Value sharing diversion clauses examined
  • Sourcing new suppliers with alternative pricing arrangements
  • Regional purchasing co-operation, purchasing ‘partnering’ or JV’s

TOPIC 3: PRICING METHODOLOGIES IN VARIOUS MARKETS

  • Price erosion and oversupply
  • Single buyer – single seller
  • Multiple buyers and sellers – impacting factors
  • The potential problem of destination clauses
  • Fixed pricing; fixed pricing with escalator clause; floating price
  • Pricing benchmarks and calculations (crude oil, indexation, S curve, Henry Hub spot and forward, NBT spot and forward; JCC)
  • Slopes and hybrids as well as convergence of global gas prices, hub price correlations and oil price correlations

Case studies
Practical examples of how markets work
Excel exercises on calculating price slopes, proxy curves, etc.

TOPIC 4: PRICE NEGOTIATION – CRITICAL CONSIDERATIONS

  • Market factors – economic growth; available infrastructure; oil indexation; crude price variation/fluctuations; impact of speculators; global demand patterns – emerging and declining markets – seasonal variation/ weather availability and cost (price) of substitutes (alternative fuels/energy) global supply patterns – level of global production/liquification capacity/storage capacity
  • Buyer and seller strategies – terms of agreement; price/volume strategies – economies of scale and scope factors; long term shipping contracts vs. short term ‘spot’ transactions; spot price considerations for ‘offtakers’ – tolling fees from liquefaction owners – adding volatility to the market?
  • Caution in capital investments and project selection; contractual renegotiation; procurement negotiation – security of supply – flexibility
  • Case study: Designing the price clause in LNG contracts
  • Other critical considerations: Force Majeure – buyer’s obligations relating to transportation costs where seller is prevented from delivering; the role of negligence in negating force majeure provisions;

TOPIC 5: LNG PRICE REVIEWS AND REOPENERS

  • Understanding the two primary sources of
  • LNG pricing models – oil indexation and gas hub prices.
  • The buyer’s and the seller’s perspective relative to the underlying nature of the contract
  • Why is the option for a review important?
  • What are the legal considerations – price review contractual clauses – on what is price reviewed? Analysis of other imported sources of gas supplies
  • The impact of alternative fuel usage – i.e. nuclear/coal supplied power generation
  • The ‘landed cost’ consideration
  • Market liberalisation and the ‘oil displacement’ phenomenon
  • The dangers of over reliance of import price data – the ramifications of ‘short – term’ gas vs. ‘long-term’ gas
  • JCC Indexation
  • Henry Hub Indexation

TOPIC 6: LNG PRICE HEDGING

  • ‘Long hedging’ and natural gas futures – ‘rise’ and ‘fall’ strategies
  • ‘Options’ contracts – ‘call’ options and ‘put’ options
  • Option trading strategies (‘spreads’)
  • Why use financial derivatives?
  • The question of volume of transaction for liquidity.
  • Key factors that impact/influence LNG financial derivatives
  • Interactive exercise: LNG price review case study

Excel exercise: calculating financial hedges

TOPIC 7: LNG RISK & STRESS TESTS

  • Storage and distribution issues; seasonality; substitutes; security of supply; marine supply chain vulnerability
  • What are ‘stress tests’ – a viable alternative to traditional scenario planning? Why? The critical stress test parameters; the danger of ignoring ‘tail events’
  • Constructing and implementing scenarios
  • A suggested methodological template for stress/scenario planning/implementation

Exercise: scenario and stress testing – creating an implementation strategy

TOPIC 8: LNG DISPUTES AND DISPUTE RESOLUTION

  • Factors that cause disputes – the buyer and the seller perspectives of favourable outcomes to a contract
  • The two main ‘classifications’ of LNG disputes – price and non-price (destination restrictions; liability and Force Majeure, etc.)
  • Price review and price reopener provisions – when do they come into effect? How can a contract price be adjusted?
  • What dispute resolutions provisions/methodologies are in place?
  • Key issues of consideration in LNG pricing disputes – how has the price review provision been drafted? What has ‘triggered’ the dispute? What form of dispute resolution is most appropriate? What price mechanism adjustments may resolve the dispute?
  • Changes to a party’s circumstances and
  • Force Majeure provisions
  • Trigger events and trigger notifications

when & where

19 - 20 Jul 2018

Mandarin Orchard Singapore, by Meritus
333 Orchard Road, Singapore 238867
Tel: +65 6831 6062 | Fax: +65 6737 3130
Mobile No.: +65 8298 9442
Contact Person: Tan Ai Li
Email: aili.tan@meritushotels.com
Website: www.meritushotels.com

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