LNG Face-to-Face Academy

Day 1

Derivatives

• What is trading and why do companies trade
• The major gas hubs
• What is a gas derivative
• What the difference between forwards, futures, swaps and options are
• Explains some trading terminology
• How a futures exchange works
• How traders use gas derivatives

Ignite simulations – 2 trading simulations where delegates will be able to trade futures, swaps and forwards

Trading Best Practice

• What is risk
• The different types of risk - price, credit, operational, reputational
• How risk can be managed successfully by a trader
• Technical analysis
• How risk is measured, what is VAR and how is it usedTrading lessons - common pitfalls

Ignite simulations – 2 trading simulations where delegates will be able to trade NBP, ZBR, PEG, TTF and NCG futures within a VAR trading limit

Time Spreads

• What is spread trading/different types of spread.
• Principles of spread trading
• What a forward curve is and market structure
• Different types of market structure and what they signify
• How traders use time spreads

Ignite simulations – 2 trading simulations where delegates will be able to trade NBP and TTF futures within a trading limit

Day 2

Price Exposures 

• What is physical LNG trading
• Why trade physical LNG
• Physical LNG trading issues
• Factors that influence supply
• Factors that influence demand
• Natural Gas/LNG quality
• Contractual considerations
• Explains floating prices and benchmark prices
• LNG price risks - oil v gas
• Managing LNG price risks

Ignite simulations – 2 trading simulations where delegates will be able to trade JKM, TTF, Brent and Henry Hub futures

Arbitrage

• Explains physical arbitrage
• Contractual delivery terms
• LNG cargo lifecycle
• Time charter
• Port and canal costs
• Operational costs of arbitrage
• Financial risks
• When traders arbitrage
• Netback calculation
• Managing arbitrage price risks

Ignite simulations – 2 trading simulations where delegates will be able to trade American, European and Middle Eastern LNG cargoes, charter vessels and manage price risk exposures

Hedging

• Why hedge
• Basis risk
• Futures as hedging instruments
• JKM swaps as hedging instruments
• Hedging considerations
• Types of hedging
• A detailed example of hedging a fixed price cargoes
• A detailed example of hedging a floating price cargoes
• Futures or swaps?
• Dirty or imperfect hedging

Ignite simulations – Up to 3 trading simulations where delegates will be able to apply arbitrage and unwinding hedges and charter vessels as LNG cargoes price in/out

Day 3:

Storage

• What is storage
• Storage considerations
• Why companies might want storage
• The costs associated with storing LNG
• Valuing storage
• Optimisation of storage
• Types of market structure
• How to hedge a storage play
• Intrinsic and Extrinsic Value

Ignite simulations – 2 trading simulations where delegates will be able to store American LNG cargoes and apply hedges to capture the storage play

Team Dynamics

• How to extract value from a physical LNG portfolio
• Why speedy evaluation of opportunities is critical
• Why teamwork is important
• Applying all the trading concepts learnt across a portfolio
• Understanding the value of tenders

Ignite simulations – Working as a team, the delegates will apply all the trading concepts across a portfolio of LNG cargoes, trading spot cargoes, entering tenders, hedging, arbitrage, seeking storage opportunities and speculatively trading the futures markets with flat price and spreads positions.