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LNG Pricing, Trading & Risk Management: 2-Day Training Program

Capra Energy Group

Training

In London ()

£ 1,495 VAT exempt

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Description

  • Type

    Training

  • Level

    Intermediate

  • Class hours

    14h

  • Duration

    2 Days

The global LNG market is rapidly growing, in both size and complexity. Trading and risk management are critical components of the LNG value chain, and it is important that professionals involved in the LNG industry acquire a solid understanding of these areas.

The main objective of the LNG Pricing, Trading & Risk Management 2-Day Training Program is to provide participants with the practical skills and tools they will need to take their LNG pricing, trading and risk management analysis and decisions to the next level.

This includes key areas such as: building LNG forward price, volatility and correlation curves; pricing and structuring LNG transactions; optimizing physical LNG trades and financial hedges; and controlling risk within LNG marketing and trading operations.

About this course

The main objective of the LNG Pricing, Trading & Risk Management 2-Day Training Program is to provide participants with the practical skills and tools they will need to take their LNG pricing, trading and risk management analysis and decisions to the next level.

This includes key areas such as: building LNG forward price, volatility and correlation curves; pricing and structuring LNG transactions; optimizing physical LNG trades and financial hedges; and controlling risk within LNG marketing and trading operations.

The training program is intended for:
- Spot and term traders
- Commercial transactors
- Quantitative analysts
- Fundamental analysts
- Risk managers and analysts
- ETRM systems professionals
- Back-office support professionals
- Derivative accountants

An understanding of basic physical and financial derivatives used in the energy markets (e.g., forwards, vanilla options) would help a participant maximize the value derived from the course. Also, a basic knowledge of Microsoft Excel (or comparable spreadsheet software) is assumed in the course.

Capra Energy's LNG Pricing, Trading & Risk Management 2-Day Training Program is highly focused on demonstrating practical tools and methods, which the participants will be able to take with them and apply independently following the course. This includes Excel templates and algorithms for building curves, estimating LNG losses and consumption, and modeling the value of certain LNG structures. This practical orientation also accounts for the course's reliance to multiple case studies and exercises, all of which rely on actual LNG transactions, projects and market data to the greatest extent possible.

Additional training program information and instructions for registering can be found at: www.capraenergy.com/lng-training-program.html

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Subjects

  • Building LNG forward price and volatility curves
  • Pricing and structuring LNG transactions
  • Measuring risk and value for LNG portfolios
  • Physical and financial LNG trading and hedging
  • Controlling LNG trading operation risk

Teachers and trainers (1)

Tamir Druz

Tamir Druz

Director and Lead Trainer

Tamir Druz is the Director of Capra Energy Group, and the co-editor of its LNG Forward Market Wire service, which publishes daily forward price curves for the major LNG markets. He has served as a key strategy, finance, trading and risk management advisor for LNG exporting nations, major global energy firms, and other leading organizations, such as Exxon International, Morgan Stanley and Iberdrola. Mr. Druz earned an MBA in Finance from the Wharton School of the University of Pennsylvania and a BS in Chemical Engineering from The Cooper Union.

Course programme

8.30am

Registration

9.00am

Welcome and Course Overview
• Introductions and Course Overview
• Distribution of Course Materials

9.30am

The Global LNG Market: Fundamental Drivers & Trends

• Current & Emerging Sources and Trends for LNG Supply & Demand by Region

• Fiscal & Regulatory Drivers of Demand by Sector (e.g., Power Gen, Marine Fuel, etc.)

• Global LNG Trade Flows: LNG Supply & Demand Hubs and Capacities

• Spot Market Price Levels, Spreads & Drivers

11.00am

Operations & Logistics Along The LNG Value Chain

• Inputs, Outputs, Costs, Losses and Timing Across the LNG Value Chain
• Liquefaction & Regasification Plant Operations & Technology

• Shipping, Storage, Loading & Offloading Operations & Technology

• LNG Quality (GCV, Impurities, etc.): Economic & Operational Implications/Optimization

• Excel Examples: Calculating Boil-Off, Freight Costs, Yields, etc.

Case Study: From the Field to the End-User - An in-depth look at the operations, logistics, costs and times required to process, transport and regasify an LNG cargo.

12.30pm

Lunch Break

1.30pm

LNG Forward Market Prices, Volatilities & Correlations

• Sources & Uses for Observable Spot & Forward LNG Prices (e.g., Platts, ICAP)

• Methods & Applications of Netback-Based Price Estimation

• Curve Construction Based on Proxies (e.g., Brent Crude, Henry Hub, NBP)

• Volatility & Correlation Curve Construction Methods & Applications

• Excel Examples: Netback Price Calculations, etc.

Case Study: Build a Long-Term Forward Price Curve - Starting with observed long-term transactions and historical data, use proxy-based method to estimate long-term forward price curves for selected markets.

4.00pm

End of Day 1


-----------------------------------------------------------DAY 2 ---------------------------------------------------------

8.30am

Long-Term LNG Transactions: Structuring & Pricing

• Review of Sale & Purchase Agreements (SPAs): Typical Terms & Conditions

- Pricing Formulas, Indices, Pricing Windows, etc.

- Diversion Rights & Destination Clauses

- Force Majeure, Liquidated Damages, etc.

-Price Re-Openers, Cancellation Clauses, etc.

-Cargo Take-or-Pay and Up/Down Flexibility

• Derivative Structures Appropriate for Modeling SPA Features Listed Above

• Valuation Guidance for Basic & Structured Positions (Spot, Term, Inventory, SPAs, etc.)

• Excel Examples: Valuation of Term Deal (Fixed & Floating Price), Flexible Destination SPA

10.30am

Physical & Financial LNG Trading: Strategies & Mechanics
• LNG Trading Strategies: Reloads/Re-exports, Cargo Swaps, Diversions, Spot Arbitrage, etc.

• LNG Physical Transaction Mechanics: Pricing, Nominations, Timing, etc.

• LNG Financial Transaction Mechanics: Markets, Instruments, Ratable Hedging, etc.

Case Study: Three LNG Trades in Detail - A presentation of the execution details and economic results for the physical trade, financial hedge and freight components of three LNG transactions based on actual market transactions.

12.30pm

Lunch Break

1.30pm

LNG Risk Control Environment: Systems, Processes & Organizational Issues
• Integration of LNG Business with Legacy ETRM Systems

• Incorporating LNG Activity into Risk Policies and Procedures

• Customization of Risk Metrics and Risk Limit Structure for LNG

• Other Organizational and Process Considerations for LNG

3.00pm

End of Course

Additional information

Additional information can be found at www.capraenergy.com/lng-training-program.html

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LNG Pricing, Trading & Risk Management: 2-Day Training Program

£ 1,495 VAT exempt

The best Financial Derivatives courses

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