LNG Supply & Pricing Virtual Training Course
A 3 Day Virtual Course on
LNG Supply & Pricing Virtual Training Course
Overview
Global LNG supply and demand increased by 5.4% to 394 mt in 2022, as Covid restriction eased, and economies recovered from the pandemic. The fastest growth in demand was in Europe where LNG imports were up by 46 mt (60.1%) as it turned to LNG to replace the loss of imports of natural gas by pipeline following Russia’s invasion of Ukraine. It resulted in a major change in trade flows as cargoes from the USA and other Atlantic basin producers were diverted from Asia and South America. The US was the main source of new supply, as production increased by 8.7 mt, but the increase was less than expected because an accident halted production at the 15 mtpa Freeport LNG in early June. Elsewhere, technical problems and shortfalls in feed gas supply to liquefaction plants also affected output leading to a tight LNG market with buyers competing for supply to meet the growing demand.
Prices escalated to record levels with spot LNG reaching $70/ MMBtu in Asia and close to $100/MMBtu in Europe. It meant that the value of a cargo of LNG on a 174,000m³ LNG carrier, which had fallen to around $10m in 2020 at the height of the Covid crisis, when prices in Asia and Europe were $2/MMBtu, rose to close to $300m, more than the cost of the ship. The Covid crisis delayed Final Investment Decisions on some LNG projects and the progress of some that are under construction, so LNG supply growth is expected to be slow in 2023 and 2024, with the market remaining tight. However, 2025 and 2026 should see major LNG projects in the USA, Canada and Qatar come on stream easing the tightness in the market. In the longer term, growth will depend on which of the over 400 mtpa of proposed capacity, 50% of which is in the USA, take FID in the next two years.
Course Director
Andy Flower
LNG & Natural Gas Consultant, UK
Andy Flower has been consultant in LNG & Natural Gas since his retirement from BP in 2001. During his 25 years working on LNG in BP, Andy managed BP’s interests in projects in Nigeria, Abu Dhabi, Qatar and Australia. He also led a team responsible for evaluating potential new projects in PNG, Venezuela, Angola, Egypt, Indonesia and Iran. His expertise is in the commercial aspects of LNG including, marketing, project development, supply and demand, contracts, pricing, shipping and short-term trading. He has run LNG courses in Europe, Asia, the Middle East and the Americas. He is the author of many articles in journals and chapters in books on LNG and natural gas.
Course Objective
This virtual course, to be held over three sessions of 3.5 hours each, will focus on the demand, supply and pricing of LNG. There will be a short introduction to the LNG chain and the infrastructure in place (liquefaction, regasification, shipping) in 2022 before the focus moves to the outlook for the industry. The objective is to give participants an understanding of the LNG business as it is today and the prospects for its development over the period to 2040. There will be the opportunity to participate in exercises, including identifying the preferred sources of supply for a new buyer and considering the options for pricing in a long-term contract.
The course will be taught via a video conferencing platform, over 3 days of 3.5 hours each. The course instructor will adopt an interactive approach which will encourage active participation and delegate engagement.
Who Should Attend
Analysts
Operations, Business, Economic, Market
Managers
Commercial, Biz Devt, Supply Chain
Professionals
Legal, Financial, Audit, Engineers
Corporate Executives
Policy Developers, Economists
Traders
Bunkering, LNG
Government Officials /Investors
Regulators, Investors, Financiers
Programme at a Glance
- What is LNG? Why LNG?
- The LNG Chain (natural gas production, liquefaction, shipping, regasification)
- The LNG industry in 2023
- Exporters and importers
- LNG supply and demand 1964 to 2022
- LNG ships in operation and on order
- LNG prices in 2022 and the first half of 2023
- What will be the role of LNG in energy transition?
- How much CO2 and methane is emitted by the LNG chain from wellhead to consumer?
- What is the LNG industry doing to reduce emissions?
- Carbon-neutral LNG cargoes
- LNG projects in operation and under construction in mid-2023
- Planned LNG projects
- Final Investment Decisions (FIDs) on new liquefaction capacity in 2022 and 2023
- Which planned projects will take FID by the end of 2024?
- Forecast LNG supply from projects in operation and under construction in 2023
- How much output from new projects is needed to meet expected demand by 2030 and 2040?
LNG in 2023
LNG and Energy Transition
LNG Supply
Introduction of Exercise 1: Preferred Options for Securing LNG Supply
LNG Markets
- Established markets in Asia – Japan, Korea and Taiwan
- What are the prospects for the Chinese market?
- How are price-sensitive markets in S. Asia being affected by high prices?
- S.E. Asia – how many of the planned LNG-to-power projects be implemented?
- Europe – how much LNG will Europe need as it implements a policy of net-zero by 2050?
- will imports of natural gas by pipeline from Russia resume?
- Latin America and the Caribbean – how quickly will LNG import infrastructure be developed?
- Africa – how many countries will succeed in implementing plans to import LNG?
- LNG for transport – road vehicles and ship bunkering
- Outlook for global LNG demand 2023 to 2040
LNG Pricing
- Formula-based and market-based pricing
- Oil indexation in Asia – does it have a future?
- How will spot pricing (JKM) evolve in Asia?
- Market prices in Europe NBP and TTF. Will a European LNG index emerge?
- How competitive is US LNG?
LNG Shipping
- FOB v DES
- Owning or chartering LNG ships?
- The cost of transporting LNG
- LNG ships in operation and on order
- FSRUs and FLNG
LNG Spot and Short-term Trading
- What is spot and short-term LNG trading?
- The share of spot and short-term LNG in total LNG supply in 2022
- What is needed for LNG spot and short-term trading?
- Which companies trade LNG on a spot and short-term basis?
- The outlook for spot and short-term trading
The Outlook for LNG
- LNG supply and demand 2023 to 2027 – will demand be met?
- LNG supply and demand 2028 to 2040 – which new projects will be developed to meet demand?
- What will be the role of long-term contracts?
- Which new markets will emerge?
Fundamentals of Refining Economics
- Fundamentals of refinery economics and margin optimization overview
- Tactical planning applications for maximizing refinery financial performance
- Financial Metrics
- Capital costs
