THE GAS TRADER ACADEMY

DAY 1

Natural Gas — Introduction

• Natural gas in the hydrocarbons sequence: from methane to complex long-chain hydrocarbons
• Where natural gas, LPGs, and crude oil fit and how they are related
• Natural gas, associated gas, shale gas: is there any difference?
• What is shale gas and why is it ‘unconventional’?
• Natural gas liquids and liquefied petroleum gases (NGLs & LPG)
• Measuring natural gas
• Introducing the differences between oil and gas from a materials & energy point of view
• LNG

Natural Gas and Oil

• Different energy properties: different uses (energy density, volume considerations, containment and pollution)
• The question of transportation: how oil and gas are transported to market, the difference between transportation methods

Natural Gas — Reserves and Production

• Distribution of global natural gas reserves and Kazakhstan’s place in the hierarchy
• Regional gas production histories
• Natural gas production
• Associated gas and the pressures to reduce flaring
• Shale gas production techniques and how they differ from traditional methods
• The impact of problems of gas storage on production
• Turning raw wellhead gas into saleable products

Natural Gas — Transportation

• Transporting natural gas: pipelines, compression, liquefaction
• Gas pipelines
• Major gas pipelines of the world
• LNG
• LNG delivery chain: liquefaction, transportation, regasification
• Worldwide liquefaction and regasification terminals
• Recent trends and the impact of shale gas
• Advantages and disadvantages of pipelines vs. LNG
• Compression as an alternative to liquefaction

Gas Consumption

• The world’s major gas users
• By region / country
• By sector - power generation / industrial heat / domestic heating and cooking / transportation?
• Gas distribution and use power generation, petrochemicals, industrial heat, domestic heat, future vehicle fuels) gas-to- power and gas-to-liquids (GTL)
• Gas as a petrochemicals feedstock

Gas Storage and Distribution

• Gas storage facilities
• The seasonal nature of gas demand
• Managing gas flows

DAY 2

The Shale Gas Phenomenon

• North American resources and production
• Can the North American experience be repeated elsewhere?

Commercialisation of Natural Gas

• Gas sales and marketing strategy, negotiations

Gas Pricing and Contracts

• Gas market structures
• Gas-on-gas competition/liberalised markets: North America/UK
• Prices linked to competing fuels – Europe / SE Asia
• Prices linked to oil: Japan / Korea / Taiwan
• Regulated prices: Middle East / Russia / China

Gas Sales Arrangements

• Long-term contracts
• Spot sales

Gas Balancing Game

International Gas Trade

Gas Sales and Transportation Contracts

• Gas sales agreements
• Length of term
• Quantity
• Price terms
• Delivery point
• Delivery obligations
• Take-or-pay / ship-or-pay obligations
• Gas quality
• Renegotiation opportunities

Pricing and Formulas Used In Gas Industry, Benchmark Prices

• US: Henry Hub
• Europe: oil price linkage vs. hub pricing (NBP, TTF, etc.)
• Asia: Japanese Crude Cocktail

Gas Trading Hubs

DAY 3

Negotiation Exercise

• Game theory

Natural Gas Price Drivers

• Heating/Cooling Demand
• Power Generation
• Macro Factors
• Interconnections
• LNG imports
• Sentiment
• Price of competing fuels

Good Trading Discipline

• Trading Terminology
• Trading rules
• What can go wrong?

Flat Price Trading

• Challenges of flat price trading
• Trading Simulation

Technical Trading Techniques

• Different types of charts
• Trends
• Support and Resistance
• Retracements
• Candlestick patterns
• Moving Averages
• Trading Simulation

DAY 4

Speculative Spread trading

• What are spreads?
• Why do traders use spreads?
• Geographical gas spreads
• Gas time spreads
• Contango/Backwardation
• Trading Simulation

Monetising Transport Capacity

• Transport Costs
• The impact of FX
• Valuing transport capacity
• The importance of volatility
• Trading Simulation

Valuing a storage asset

• Storage Costs
• Standard Bundled Units
• Intrinsic and Extrinsic Value
• Hedging storage capacity

Monetising Storage Capacity

• How do traders make money?
• Rolling hedges
• Considerations when optimising
• Trading Simulation

DAY 5

Introduction to LNG Trading

• How is LNG traded?
• Price Drivers
• Shipping Terminology

Simple LNG Arbitrage

• Fixed price arbitrage
• Chartering a vessel
• The impact of FX
• Trading Simulation

Floating Prices

• Marker Prices

Complex LNG Arbitrage

• Hedging
• Trading Simulation