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Mining, Oil And Gas Yogyakarta

Optimizing Gas Pricing and Sales Strategy

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.

OBJECTIVES

• ESTABLISH good practices in gas marketing and pricing from both the technical and commercial perspectives
• GAIN a thorough understanding of the current gas market structure
• MASTER and APPLY the gas/LNG pricing strategies in a competitive global gas market
• MANAGE a good balance between the supply and demand of natural gas in a competitive global market
• RECOGNISE the importance of the physical integration of the Gas Industry or what is referred to as the Gas Chain
• UNDERSTAND various approaches for pricing natural gas and SELECT the most cost effective one aligned with your organization goals
• MAXIMIZE your practical experience by participating in simulations on gas price negotiation
• MINIMIZE transportation and storage cost of natural gas while fulfilling the contract specifications for gas delivery

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

• Access Regimes
• Transportation Obligations
• Transportation Tariffs

b. Natural Gas Transportation Agreements

• Dedicated Pipelines
• Open Access Systems

c. LNG Charters

• Long-term Charters
• Spot Cargoes

12. Part Pipeline Tariff and LNG Charter Rates

13. Natural Gas Delivery and Storage

a. Storage Access & Costs

• Integrated v. Stand-alone
• Storage Tariffs

b. Multi-User LNG Terminal Agreements

• Services
• Contract Conditions

c. Natural Gas Storage Agreements

• Services
• Contract Conditions

PARTICIPANTS

The course is designed for oil & gas professionals involved in gas/LNG production, purchase, transportation and sales including:

• Gas/LNG negotiators
• Government regulators
• Contract executives, specialists & managers
• Purchasing executives & managers
• Commercial executives & managers
• Business development executives & managers
• Project executives & managers
• Financial executives, managers and controllers
• Gas/LNG buyers, sellers, distributors and traders
• Gas/LNG project investors and advisors

TRAINING METHOD

Presentation

Discussion

Case Study

Evaluation

FACILITIES

Training Kit

Flash Disk

Handout

Certificate

Lunch

2 X Coffee Break

Souvenir

Pick Up Participants (Yogyakarta)

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