LPG Pricing, Trading and Valuation

LPG Pricing, Trading and Valuation

by | Mar 21, 2023 | HP Slider, TC Gases and LNG, TC Refined Products, Training Courses

Course: LPG Pricing, Trading and Valuation

Course Overview

This 4-day course provides a comprehensive overview of the LPG market, trading, pricing, valuation and the opportunities for risk management. Each day has a clear focus covering:

  • the LPG value chain and sectoral use of LPG in the petrochemical sector, heating and residential use of LPG, and LPG in transport and industry;
  • the pricing methodologies and contractual structures used in LPG trading; including Contract Prices and how Argus benchmarks are used in settlements of spot and term contracts, and derivatives;
  • the trading and transportation of LPG by region (Middle East/Asia, the Americas and Europe/Africa),
  • the impact of the Energy Transition on LPG use, and how risk management and hedging can be used to mitigate price volatility.

Each of the four days is sub-divided logically into manageable sub-topics to facilitate retention of the knowledge imparted during the course.

Learning Objectives

  • Understand price formation in the underlying markets that drive the value of LPG
  • Know the pricing structures used in each of the main LPG trading regions
  • Understand the use of Contract prices and PRA benchmarks in the pricing of LPG
  • Quantify the sectoral use of LPG in each geographical region, and in the Middle East
  • Know regional trading patterns and how LPG is transported in and between regions
  • Learn some tools for valuation of LPG when specific PRA prices are unavailable
  • Understand how the availability of competing petrochemical feedstocks affects LPG prices
  • Do basic calculations of LPG value against naphtha, crude oil and heating fuels
  • Know how to model LPG prices and hedge during periods of market volatility
  • Have an opinion about how the Energy Transition will affect LPG demand and prices

Course Modules (12 modules over 4 days)

LPG Value Chain and Sectoral Use

  • LPG Value Chain and Market Structure
  • Introduction to LPG Regional markets
  • Sectoral Use of LPG by Region

LPG Pricing and Commercial Structures

  • LPG Pricing structures: Contract prices, Assessments
  • LPG Contractual Structures: Spot and Term
  • LPG Transportation and Freight

 

LPG Regional Trading and Pricing

  • Middle East and Asian LPG Markets
  • LPG in the Americas and the Shale Revolution
  • LPG Market in Europe, Africa and Turkey

LPG Opportunities and Competitors

  • LPG Price Exposure and Risk Management
  • Emerging Trends in Global LPG Markets
  • LPG and the Energy Transition

Who should attend?

LPG traders and trading analysts; petrochemical feedstock analysts; treasury and financial control managers with IOCs and NOCs; regulators and taxation bodies; industry analysts with exposure to LPG prices; energy portfolio strategists; industry planners; banking, finance executives; lawyers, accountants and other advisors; utility and end-user groups exposed to the price of LPG.

Course Director

Peter Stewart is a highly experienced analyst in the oil and gas markets. He was a director of the British Institute of Energy Economics (2013-2021) and has written extensively for the Oxford Institute of Energy Studies and the Oxford Energy Forum. He runs the training and consulting firm Resource Economist Ltd, and has worked as associate with a number of large consulting firms including IPA Advisory Ltd and KBC Energy Economics. He has been an expert advisor to the energy ministries of Norway and Angola on oil trading. Peter has many years experience in the trading and pricing of oil and gas, having worked for nearly 20 years with the pricing agency Platts, in London, the Middle East and Asia. Peter is a qualified executive leadership coach and is accredited with the European Mentoring and Coaching Council. Peter has written a number of books with a business focus. He graduated in English and Oriental Studies from Emmanuel College, Cambridge in 1982.

Detailed Scope

This four-day programme provides a detailed knowledge of the LPG value chain and the associated risk landscape.

 The LPG value chain from field or refinery to the final consumer is fully explained. The course provides in-depth analysis on the sectoral use of LPG in each of the main geographical regions.

 The basic commercial structures of LPG trading are outlined systematically, including fixed price and floating price trading and contract prices. The course explains how benchmarks provided by Price Reporting Agencies such as Argus Media are used in the settlement of physical and derivative transactions.

 The course provides a comprehensive overview of LPG trading by region and by sector, focussed on Middle East and Asia, the Americas, and Europe and Africa. Inter-regional flows between these three main regions are explained.

The course ends with a broad discussion of the risks and opportunities in LPG trading, focussed on how the Energy Transition will affect the use of LPG and regional trade flows, and how hedging can be used to mitigate price exposure.

The course simplifies and explains the jargon and technical terms used in the LPG market. This is a highly interactive course which uses hands-on exercises and visual aids to help delegates retain what they learn.

Course Delivery

The course is delivered over four days and is divided into 12 modules. Each module takes around 1.5 hours to complete, so around 4.5 hours per day of tuition and exercises (3 modules per day).

Exercises and questionnaires are provided in the classroom and for overnight scrutiny to allow delegates to consolidate the intensive course materials provided. Delegates are fully supported by the course instructor to successfully complete the various exercises and assignments.

The course can be delivered online or in person at the client’s office. The style of tuition is informal, friendly and highly interactive, with regular recaps of key course material provided. Delegates are encouraged to ask questions at the end of each module.

 

Crude Oil Trading and Risk Management

Crude Oil Trading and Risk Management

by | Mar 21, 2023 | HP Slider, TC Crude Oil, Training Courses

Crude Oil Trading and Risk Management

Course Overview

This 3-day course provides a comprehensive overview of Crude Oil pricing and risk management strategies. Each day has a clear focus covering first, the Crude Oil volatility and the value chain risk landscape from oilfield to refinery; benchmark pricing methodologies (Brent, Oman/Dubai and WTI), crude oil differentials and market structure; hedging of benchmark and differentials; and risk management monitoring and strategy, including VaR and other quantitative tools for risk evaluation, mitigation, monitoring and reporting. Each of the three days is sub-divided logically into manageable sub-topics to facilitate retention of the knowledge imparted during the course.

Learning Objectives

  • Understand the system of crude oil benchmark pricing and differentials
  • Understand how PRAs calculate Dated Brent, Oman/Dubai and WTI assessments
  • Know the basic structures for hedging crude oil sales and purchases
  • Become familiar with crude oil futures, options and swaps and their use in hedging
  • Master the calculations you need to manage risk relative to benchmarks
  • Understand how to lock in a trading margin using derivatives
  • Track GPW, GRM, crack spreads and transportation costs
  • Confidently discuss the technical terms, concepts and buzzwords with your peers and clients

 

Course Modules

  • Crude oil benchmarks and their use in physical and derivatives pricing
  • How crude oil deal parameters affect differentials to benchmarks
  • Identifying Risk Exposure: Drivers and Measurement of Crude Oil Volatility
  • The Crude Oil Derivatives Markets: Futures, Options, Swaps
  • Hedging and the Basic Principle of Risk Offsetting
  • Locking In Arbitrage Using Derivatives
  • Risk Management Strategy and Hedge Ratios
  • Hedging Crude Oil Refining Margins
  • Risk Measurement, Monitoring and Reporting

Who should attend?

Crude oil marketers, traders; refining industry planners; banking, finance execs; lawyers, accountants; oil company graduate trainees; power companies with exposure to oil prices; refined product end-users. Banks with a presence in the commodities markets; swaps sales and marketing staff; regulatory and taxation authorities; oil refiners; National Oil Companies; independent exploration companies;  oil and commodities traders; business development staff at futures exchanges; fund managers; private equity executives.

Course Director

Peter Stewart is a highly experienced analyst in the oil and gas markets. He was a director of the British Institute of Energy Economics (2013-2021) and has written extensively for the Oxford Institute of Energy Studies and the Oxford Energy Forum. He runs the training and consulting firm Resource Economist Ltd, and has worked as associate with a number of large consulting firms including IPA Advisory Ltd and KBC Energy Economics. He has been an expert advisor to the energy ministries of Norway and Angola on oil trading. Peter has many years’ experience in the trading and pricing of oil and gas, having worked for nearly 20 years with the pricing agency Platts, in London, the Middle East and Asia. Peter is a qualified executive leadership coach and is accredited with the European Mentoring and Coaching Council. Peter has written a number of books with a business focus. He graduated in English and Oriental Studies from Emmanuel College, Cambridge in 1982.

Detailed Scope

This 3-Day programme provides a detailed knowledge of crude oil pricing and risk management. The course follows a logical order looking first at crude oil pricing, including how benchmark prices and grade differentials are set; using this to identify risk exposure from price and spread volatility; and then exploring the range of instruments that can be used to mitigate price risk.

The basic structures of commodity trading are systematically explained, including physical, forwards, futures, options and swap markets, and the interaction between the value of the physical crude oils and the instruments that are traded as derivatives.

The course explains how the benchmarks provided by Price Reporting Agencies such as Standard & Poors/Platts and Petroleum Argus are used in settlement of physical and derivative transactions. The drivers of crude oil prices relative to refined products prices are explained, as well as the changing drivers of market volatility, and how these are relevant to risk management.

A comprehensive overview is provided of crude oil price risk management, including quantitative tools for risk analysis; volatility and correlation measures; calculating hedging ratios; risk-offsetting and basis risk; liquidity risk management; modelling portfolio risk; Value-at-Risk (VaR) and other risk measures; and market risk reporting.

Delivery

The course is delivered over three days and is divided into 9 modules. Each module takes around 1.5 hours to complete, so around 4.5 hours per day of core tuition and exercises (3 modules per day). The course can be delivered online or in person at the client’s office. The style of tuition is informal, friendly and highly interactive, with regular recaps of key course material provided. The course simplifies and explains the jargon and technical terms used in the oil market, with hands-on exercises and visual aids used to help delegates retain what they learn. Delegates are encouraged to ask questions at the end of each module. Exercises and questionnaires are provided for overnight scrutiny to allow delegates to consolidate the intensive course materials provided.

 

LNG Trading and Risk Management

LNG Trading and Risk Management

by | Mar 21, 2023 | HP Slider, TC Gases and LNG, Training Courses

 

LNG Trading and Risk Management – course outline

This online course provides a comprehensive overview of the LNG trading sector and LNG trading and risk management strategies.

Scope

This course provides a comprehensive overview of the LNG trading sector, including mass, volume and energy conversions; the LNG value train from liquefaction to regasification; transport logistics; the structure of LNG contracts; the concept of oil parity and the pricing of LNG; hub-related pricing; risk management models; the economics of LNG portfolio trading; price drivers and the impact of interfuel competition; and the role of sustainable LNG in the energy transition. Peter’s aim as a trainer is not just to present the course materials but to do so in a relaxed and enjoyable way that allows delegates to absorb the content of the lessons and to make the knowledge their own.

Delivery

The course is delivered over four days and is divided into 8 modules. Each module takes around 1.5 hours to complete, so around 3 hours per day of tuition and exercises (2 modules per day). Each day has a clear focus covering first, the LNG value chain; the pricing methodologies and market structure; trading and risk management; and finally emerging trends for the LNG market outlook. Each of the four days is sub-divided logically into sub-topics to facilitate retention of the knowledge imparted during the course.

Objectives

  • Gain broad perspective of global LNG business from liquefaction to regas
  • Understand how LNG long-term and short-term contracts are structured
  • Master the calculations that you need to understand mass, volume and energy conversions relevant to LNG
  • Understand the trading and pricing structures for LNG including oil parity, slope and coefficient, and hub-related pricing
  • Be confident to negotiate prices relative to established benchmarks within contractual structures.
  • Understand the concept of LNG portfolio management, optimization and risk
  • Be aware of risk management and the basic structures for hedging LNG sales and purchases, and for locking in a trading margin.
  • Confidently discuss the technical terms, concepts and buzzwords with your peers and clients

 

 

Topics Covered

  • What are Gas and LNG?
  • Basic calculations of mass/volume/energy
  • The LNG Value Chain: from Liquefaction to Receiving Terminals
  • LNG transportation logistics
  • Drivers of gas and LNG prices
  • LNG Contracts: Long Term, Short Term, spot
  • LNG Pricing: Oil Indexed and Hub-related
  • Slope and coefficient, S curves
  • LNG market participants and portfolio players
  • Basics of Hedging
  • Hedge selection and instruments
  • Portfolio risk
  • Economics of LNG and Interfuel Competition
  • Sustainable LNG and the Energy Transition

 

Who should attend?

Natural gas and LNG marketers, traders and trading analysts; energy portfolio strategists; industry planners; banking, finance execs; lawyers, accountants and other advisors; gas and LNG graduate trainees with IOCs and NOCs; power companies with exposure to gas prices; regasification terminal operators; gas end-users.

 

Course Director

Peter Stewart is a highly experienced analyst in the oil and gas markets. He is a director of the British Institute of Energy Economics and has written extensively for the Oxford Institute of Energy Studies and the Oxford Energy Forum. He runs the training and consulting firm Resource Economist Ltd, and has worked as associate with a number of consulting firms including IPA Advisory Ltd and he was chief economist at KBC Energy Economics. He has been an expert advisor to the energy ministries of Norway and Angola on the short-term oil and gas outlook and on oil trading. Peter has many years experience in the trading and pricing of oil and gas, having worked for nearly 20 years with the pricing agency Platts, in London, the Middle East and Asia. Peter is a qualified executive leadership coach. He has a relaxed and interactive tuition style, and seeks to maximize the learning experience of delegates through the use of coaching techniques.

Hydrocarbon Development and the Energy Transition

Hydrocarbon Development and the Energy Transition

by | Mar 7, 2023 | HP Slider, TC Energy Transition, Training Courses

Course title: Hydrocarbon Development and the Energy Transition

Course Code: ET-HDT

Availability: 4 days, online or in-house

Course summary
This 4-day course provides a comprehensive overview of the challenges and opportunities faced by companies developing hydrocarbon resources during the Energy Transition. While many governments are phasing out the use of fossil fuels in transport, heating and electricity, regional implementation of the switch to low carbon fuels is uneven. Certain sectors such as petrochemicals will remain reliant on oil and gas. This course provides case studies, interactive exercises and the opportunity for open discussion around hydrocarbon development in the new energy era.
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Hydrocarbon Development and the Energy Transition

Energy Transition: Culture, Strategy and Dynamics

by | Mar 7, 2023 | HP Slider, TC Energy Transition, Training Courses

Course title: Energy Transition: Culture, Strategy and Dynamics
Course Code: ET-CSD
Availability: 3-day course, in-house only 

Course summary
This 3-day course allows companies to explore the dynamics of the organisational transformation required to meet the upcoming challenges of the energy transition. Whether you are working in the traditional fossil fuel sector, as a producer or energy-intensive consumer, the Energy Transition will have a significant impact not only on your bottom line, but also on your staff and shareholders. This course alolows companies to explore the dynamics of change within their organisations.

Course details
This is a highly interactive course. Over three days, participants will get to know themselves better, and will understand how their own values fit in with those of their organisation. Starting with this solid base, the course explores the organisational culture that underlies the business goals and strategies of the organisation in which you work. This becomes the basis for strategic decision-making. Understanding the corporate culture is the first step to defining a strategy, because implementing a strategy involves harnessing the energy of people with values and a sense of purpose. The course recognises the reality that organisations are complex systems, and that organisational change involves transformation at multiple levels of the system.  

Who should attend?
This course is essential for anyone with leadership responsibility in  an energy company or in large companies exposed to the challenges of the energy transition. This includes senior executives, board members and those with treasury responsibility. It will appeal to those who want to make CSR a central plank of their decision-making and strategy, and are committed to deep organisational change as a way to achieve this. Given the scope of the transformation over the next 30 years, this course has wide appeal and relevance to those committed to change. 

Key objectives
The key objective of the ET-CSD course is to allow companies to make the deep changes in their organisational structures and strategy that will be necessitated by the energy transitikn, and to implement these fearlessly on a sustainable basis. The course will engage anyone with leadership responsibility in a company whose culture, strategy and goals will be affected by the switch to low carbon fuels and the societal changes taking place around the energy transition. 

 

This course is under development and the detailed outline will be posted here soon.

Forecasting Energy Prices

Forecasting Energy Prices

by | Mar 1, 2023 | HP Slider, TC Forecasting, Training Courses

Course title: Forecasting Energy Prices
Course Code: FEPR
Course summary: The 4-day course Forecasting Energy Prices explains the key drivers of the oil, gas, coal and power markets, and the interactions between the competing fuels. The course outlines the three main forecasting techniques: fundamental analysis, technical analysis and econometric analysis, and explains their relevance to forecasting energy prices in particular time frames. An approach to forecasting energy prices is outlined, using a model of substitution between the competing fuels depending on prices and environmental constraints. Key exogenous factors that may impact energy prices are identified, and consideration is also given of the potential impact of new technology on the fundamentals of supply and demand for each of the fuels in the future. The use of high/low and base case scenarios, and the concept of nominal and constant dollar forecasts are explained.
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