LPG Pricing, Trading and Valuation

LPG Pricing, Trading and Valuation

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.

Outline_LPG Pricing, Trading and Valuation

LNG Trading and Risk Management

LNG Trading and Risk Management

 

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.

For Course Details and PDF listing course modules please click on the link below:

LNG Risk Management – course outline