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.