Online Training - Optimizing Gas Pricing and Sales Strategy

Dilihat 103

DESCRIPTION Natural gas is rapidly becoming ‘the fuel of choice’ in many countries. At the same time it is one of the world’s most capital-intensive industries. As such, participants in the natural gas industry must confront the central issue of the ability to mobilise the investment required to undertake project development. The solution to this question turns strategies for (1) Marketing and (2) Pricing. Marketing is viewed in terms of balancing demand with supply. Pricing considerations include both the energy value of gas as a commodity as well as costs for processing, transportation and storage. Approaches to both issues vary regionally according to the role that natural gas plays in relation to alternative sources of energy. This course will cover the essence of establishing good practices in gas marketing and pricing from both the technical and commercial perspectives through specific understanding of the current gas market structure and mastering the gas/LNG pricing strategies in a competitive global gas market reinforced with real world gas/LNG case studies learning. OUTLINE MATERI 1. Commercial Consideration in Natural Gas Development 2. Development of Natural Gas a. First Principles of Natural Gas Development

Understanding the Gas Chain
Project Development Stages

b. Managing Development Risks

Completion Risk
Market Risk
Political Risk

c. Role of Governments

Legal Framework
Prescriptive v. Light-handed Regulation

d. Analysis of Project Feasibility

Economic Yardsticks – Rate of Return, Pay-out, etc
Cash-flow Analysis

e. Final Investment Decision

Design & Construction
Key Commercial Agreements
Financing

3. Upstream Project Financial Analysis Commercial Issues a. Natural Gas Markets

Market Characteristics
Global Gas Trade

b. Gas Marketing Strategies

Fuel v. Feedstock
Supply Security

c. Competing Fuels

Energy Conversions
Handling & Storage
Price Volatility
Environmental Issues

d. Natural Gas Sales & Purchase Agreements

Contractual Formats
Key Terms & Trade-offs

4. Calculating Energy Equivalent Fuel Prices 5. Options for Pricing Natural Gas 6. Gas Pricing a. Long-term Contracts

Indefinite Price Formula
Alternative Fuel References

b. Spot Contracts

Pricing Hubs

c. LNG Supply Contracts

Atlantic Basin
Pacific Basin

d. Price Indexation & Adjustments

Inflation
Changes in Commodities

e. Price Re-negotiation

Periodic Reopener
Market Changes & Economic Hardships
Arbitration

7. Gas Pricing Formula for Pacific Basin LNG 8. Negotiation Simulation a. Using Financial Models

Production Costs & Revenue
Discount Rate
Contract Duration

b. Project Evaluation

Target Rate of Return
Competing Fuel Cost

c. Indicative Prices

Base Price
Point of Delivery

d. Adjustments Between Price and Delivery Obligations

Minimum Bill
Firm vs. Interruptible

9. Cost of Power Generation from Natural Gas 10. Costs and Value of Transportation and Storage 11. Natural Gas Transportation a. Transportation Access & Costs