Mastering Pricing and the Price Review in Gas & LNG Contracts

Transcription

1 Learn through Real Life Projects & Case Studies - Mastering the Difficulties of Pricing and Price Review in a Volatile Global Gas Markets Market Led by a World-class Oil & Gas Negotiator Anthony Way Director & Managing Partner The Energy Contract Company, UK About Past Delegates to Anthony Way s Courses & Feedbacks Companies that have participated in Anthony s past courses include virtually all of the majors such as: BP, Shell, Santos, ChevronTexaco, Pertamina, Itochu Japan, Petronas, CNPC China, Guangdong Dapeng LNG, China Light & Power, BG Group, OMV, Petrovietnam, Petronas Carigali, PT PLN, Gujarat State Petronet Ltd, ONGC, PT BPMiGas, TOTAL, Lukoil Overseas, BHP Billiton, ADNOC, RWE DEA, QalhatLNG, Danagas, Dolphin Energy, Hess Group, ENI, Woodside Petroleum, PT Perusahaan Gas Negara Tbk, PT Kaltim Methanol Industri, PetroBangla, Cifal Elan Petroleum Ltd, South Africa Gas Dev, Margham Dubai Establishment etc. ABOUT 95% OF THE PAST DELEGATES RATED ANTHONY S COURSES IN OVERALL AS EITHER EXCELLENT OR VERY GOOD. Course Format This course will be held in a highly interactive workshop format for a small size of class. All the relevant critical issues will be addressed through a participative Case Study approach. Pre-course Questionnaire A Pre-course Questionnaire will be sent to you upon your registration, which allows you to raise your specific concerns and interests. Anthony will review and analyze them in advance and address them during the workshop, seeking to fully satisfy your learning needs. Certificate of Attendance Upon the successful completion of this course, you will receive a Certificate of Attendance bearing the signatures from both the Trainer and the Organizer. This Certificate will testify your endeavour and serve towards your professional advancement. * Photo courtesy of third parties Color printing of charts in Course Material for your easy reading! Official Endorsing Partner Media Partners Another Premier Product of

2 About This Premier Course A unique chance to get an appreciation of pricing in International Gas and LNG Sales Contracts, of the Price Review provisions that are now almost mandatory, and how disputes in this area can be resolved. This course is designed for gas industry professionals worldwide, those working in gas producers, buyers and sellers, and those advising investors contemplating development projects in the gas and LNG sectors of the energy industry. All of whom need to thoroughly understand and master the detail of product pricing and in particular the Price Review that has now become a regular feature of gas and LNG sales. In many regards, the Price Review is now key to the future price that the Parties will see in gas and LNG sales contracts. Attendees to this workshop will immensely benefit from the extensive knowledge of one of the leading Commercial Experts in this field. Attendees will come from leading or emerging companies and authority bodies in the gas and LNG sector of the energy industry. They will include professionals working in commercial, legal, finance, and regulation roles, including, but not limited to: Negotiators Legal Counsels/Advisors Contract/Agreements Managers/Specialists Buyers, Sellers & Distributors of Wholesale Gas Traders Bankers and Insurers Finance Managers/Controllers Treasury Executives Business Development Managers E & P Professionals/Managers Officials of Government Regulatory authorities Investors Project Managers/Coordinators Project Owners Engineers Operation Managers Corporate & Administration Professionals Strategists and planners Auditors Call us TODAY to reserve your seats in time! PROGRAM SCHEDULE DAY :30 - Registration & Tea 09:00 - Morning Session Begins 10:40-11:00 - Refreshments & Networking 12:30 - Lunch 13:45 - Afternoon Session Begins 15:10-15:30 - Refreshments & Networking 17:00 - Finish of Day/Course About Your World-class Trainer Anthony Way is a Director and Managing Partner of the Energy Contract Company and one of the top world experts in the successful negotiation of contracts in the LNG and gas industry. He has over 25 years of experience in the industry, becoming Senior Vice President of Enron International before leaving in 1999 to join as a Partner, The Energy Contract Company, an international transactional consultancy. In this role, he has worked extensively as an advisor to several major oil and gas companies and on a large number of energy projects, worldwide. In his time spent in the industry, he has led the negotiation team of more than fifteen LNG and gas projects in Asia and Europe, and been involved in a senior role in many project financings. Anthony Way has worked on as Expert on several price arbitrations in the gas and LNG area. Recently, he was appointed as Expert to the Arbitration Institute of the Stockholm Chamber of Commerce in the resolution of a major contractual pricing dispute in the European gas industry. He is widely regarded as a leading expert in the pricing of gas in Europe. The Energy Contract Company is one of the leading international advisers in energy-industry transactions, with over 250 clients in 30 countries worldwide. Anthony Way has advised on several international LNG and gas projects under development, including LNG export to China and Japan; international and domestic gas sales throughout Europe; commercial advice on two of the new gas terminals planned in Europe and one in the USA. His work has also included leading the detailed negotiation of the main contractual arrangements for the Terminal Use Agreement in the Singapore LNG Project, the newest Regas Terminal Project in Asia. He is currently working with clients in projects in Asia and Europe, where he is heavily involved advising a number of ongoing gas and LNG transactions. With a Masters in Chemical Engineering from Cambridge University and in Business Administration from DUBS Business School in the UK, Anthony Way has extensive global experience in commercial aspects of the upstream energy sector, and has been responsible for the creation of a number of high value assets in the gas sector. IN-HOUSE TRAINING (Save 40%) This course can be presented exclusively for your organisation on an in-house basis, tailored to meet your specific needs, at a place and time of your convenience. We have successfully conducted in-house training for BG India in 2008 and RWE Dea AG in To discuss how we can work with you to meet your training requirements please contact: Daniel Lau Senior Corporate Learning Specialist DID: Daniel.lau@neo-edge.com

3 WORKSHOP OUTLINE (4 DAYS) This advanced course is carefully structured in 12 Modules plus 3 Case Studies for your most effective learning results. Module 1: PRICING FUNDAMENTALS IN GLOBAL GAS & LNG MARKETS Module 2: MARKET SECTORS IN THE WHOLESALE GAS INDUSTRY Module 3: AGREEMENTS FOR THE SALE AND PURCHASE OF GAS AND LNG Module 4:... Module 5: Case Study 1: Module 6: Module 7: Module 8:... Module 9: Detailed Course Outline PRICING IN LONG TERM GAS SALES AGREEMENTS PRICING IN LNG SALES AGREEMENTS GAS PRICE FORMULA TO TRACK MARKET VALUE EUROPEAN TRADED GAS MARKETS LNG SALE INTO THE US GAS MARKET PRICE RISK MANAGEMENT THE ROLE OF THE PRICE REVIEW IN LONG TERM GAS & LNG SALES AGREEMENTS Case Study 2: EXAMPLES OF PRICE REVIEW CLAUSES Module 10: THE MARKET VALUE OF GAS IN THE END-USER MARKET OF THE BUYER Case Study 3: CALCULATION OF MARKET VALUE Module 11: NEGOTIATED SETTLEMENT OF PRICE REVIEW Module 12: INTERNATIONAL ARBITRATION OF PRICE REVIEW DISPUTES Module 1: PRICING FUNDAMENTALS IN GLOBAL GAS & LNG MARKETS 1.1 Global Gas Markets Commercial Fundamentals of Natural Gas; the LNG Value Chain from wellhead to burner tip LNG transportation fundamentals The value of gas in the Global Market 1.2 Cost of Carry Analysis of the costs associated with transporting gas and LNG Cost of Carry of Pipeline Gas and LNG compared to Oil 1.3 Gas Price parity to Crude Oil The value of Gas compared with the value of oil in world markets Correlation analysis in various gas markets Value of alternative fuels as a determining factor in the value of gas Module 2: MARKET SECTORS IN THE WHOLESALE GAS INDUSTRY 2.1 Market Sectors where Gas is sold Gas as a primary fuel for power generation; Gas usage vs. coal & oil: efficiency of fuel usage Gas usage in Domestic and Commercial sectors The Industrial sector (and its subdivisions) and use of gas in furnace applications Gas as a hydrocarbon feedstock 2.2 Gas Value by Market Sector The drivers behind gas value by market sector The affect of oil price volatility on the world s gas markets Gas-to-Gas Competition - Deregulation of the World Gas Industry Module 3: AGREEMENTS FOR THE SALE AND PURCHASE OF GAS AND LNG 3.1 Fundamental Aspects of Sale and Purchase of Gas and LNG Take or Pay Make Up and Carry Forward Termination Events Daily and Annual Delivery Quantities Under-Deliveries Force Majeure 3.2 Take-or-Pay: The Relationship between Market Risk and Price Risk The underlying commercial balance in Take or Pay Module 4: PRICING IN LONG TERM GAS SALES AGREEMENTS 4.1 Pricing in Long Term Gas Sales Agreements Pricing Objectives of Buyer and Seller The Gas Price Formula; multiplicative and additive price formulae used in pipeline gas sales Change in Contract Price reflective of change in Market Value 4.2 Pricing in Long Term Gas Sales Agreements Adjustment Frequency; Indexation Base; and Review Period 4.3 Price Indicators Price Indexation; Relationship to Market Value Base and Review Period of Price Indicators Selection of Price Indicators Module 5: PRICING IN LNG SALES AGREEMENTS 5.1 A History of Pricing in LNG Sales Agreements The Origins of the LNG Industry The Development of the Price formula used in Pacific Basin 5.2 Global LNG Markets How LNG is sold throughout the world: Pacific Basin and Atlantic Basin differences The Cost of LNG Production Principle LNG trading routes The Spot LNG Market Cargo Diversion; Arbitrage between World s Gas Markets The Cost of LNG Regasification 5.3 Pricing of LNG Pricing Objectives of Buyer and Seller Price formula used in Pacific basin LNG Sales; the price link to crude oil S-Curves, ceilings and floors Pricing outside the range of the formula. Case Study 1: Gas Price Formula to track Market Value A Case Study by the Participants in which various options for gas price indexation will be compared with trackers of value in various gas markets throughout the world. Based on actual market data, Participants will be able to judge performance of various price indexation formulae in a competitive gas market.

4 WORKSHOP OUTLINE (Continued) Module 6: EUROPEAN TRADED GAS MARKETS 6.1 Deregulation of the European Gas Industry Deregulation of the European Gas Industry Emergence of Traded Gas Markets Entry/Exit Systems and Virtual Trading Points Gas Trading as a Commodity; Products for Forward Delivery How gas trading work in the UK on the NBP 6.2 LNG Sale into European Traded Gas Markets Structuring LNG Pricing into European Traded Markets Force Majeure Module 7: LNG SALE INTO THE US GAS MARKET 7.1 Pricing Gas in the USA How Gas is Sold in the USA; Trading Hubs Henry Hub; location basis differentials 7.2 LNG Sale into the US Market LNG sales into US Regas terminals Module 8: PRICE RISK MANAGEMENT 8.1 The Price Risk Short and long term price risks in the sale of gas The forward curve 8.2 Offsetting Price Risk Hedging Netback pricing - retaining the value in the Upstream Module 9: THE ROLE OF THE PRICE REVIEW IN LONG TERM GAS & LNG SALES AGREEMENTS 9.1 Price Review Addressing the Price Risk The objective of the gas price formula addressing price risk How the Contract Price may change in time The relationship between Contract Price and Market Value 9.2 Parameters of the Price Review The trigger for a Price Review Permitted frequency of reviews Reference to Market Value Other possible parameters in a Price Review 9.3 Examples of Price Reviews Case Study of Price Review provisions in LNG Sales Agreement 9.4 Inclusion of Hardship Provisions Price Review as a means to avoid Hardship for Buyers (and Sellers) Protecting the Buyer s margins Case Study 2: Examples of Price Review Clauses Case Study: Participants will gain hands-on experience in reviewing a number of Price Review clauses used in recent (and some not so recent) Gas or LNG Sales. In Workshop format, Participants will discuss the benefits, omissions and pitfalls seen in these examples Module 10: The Indifference Principle and how Market Value is calculated 10.1 The Concept of Netback of Gas Value Netback of Value from the Burner Tip The Essential Commercial Balance of Take-or-Pay How netback is calculated 10.2 Gas Value Set at the Burner Tip The Burner Tip where all fuels compete Market Value of Gas at Burner Tip set by reference to alternative fuels Parameters used to calculate Market Value Alternative Fuels that compete with Gas set the value of Gas Determination of the most economic primary fuel, alternative to natural gas The Best Substitute 10.3 Elements of the Indifference Principle Calculation The Indifference Principle Calculation by Market Sector Establishing the most economic alternative fuel to natural gas The concept of the New Installation at the heart of the Indifference Principle Case Study 3: Calculation of Market Value Case Study: Participants will see the calculation process frequently used in the determination of Market Value that can be at the centre of a Price Review process, and the opportunity to assess for themselves the affect of various parameters in this calculation. This workshop format Case Study will make extensive use of a spreadsheet model provided to Participants for the Market Value calculation. Module 11: NEGOTIATED SETTLEMENT OF PRICE REVIEW 11.1 The timetable for Negotiated Settlement Allowance for Negotiated Settlement 11.2 Approach to Negotiated Settlement Approach to a Negotiated Settlement; Resources Module 12: INTERNATIONAL ARBITRATION OF PRICE REVIEW DISPUTES 12.1 Fundamentals of International Arbitration The process of International Arbitration Important consideration in addressing the terms of Dispute Resolution in a Gas or LNG Sales Contract How the Arbitration process works Data submissions in support of case 12.2 The Opportunity for Expert Resolution Areas where an Expert Resolution may be appropriate Selection of an Expert 12.3 The role of Expert Witnesses in International Arbitration Appointment of an Expert Witnesses and their role in areas of the Dispute Resolution process Wrap-up, Discussion and Feedback

5 R E G I S T E R N O W Mastering Pricing and the Price Review Sales Contract To confirm your position kindly complete this form and fax back to: Fax: Delegate Details Delegate 1 Delegate 2 Delegate 3 Organisation Details Company Address Telephone Fax Authorization This contract is not valid wihout a signature Signature Payment Visa Mastercard AMEX Wire Transfer on card Card number Security Code Expiry Date Today s Date Signature Billing Address REGISTRATION & ENQUIRIES Neoedge Pte Ltd 3 Phillip Street #13-04 Commerce Point Singapore Contact: Osman DID: Main: Fax: osman@neo-edge.com YOUR INVESTMENT (Please tick in the box) SGD 6,495 per delegate SGD 6,095 per delegate if you register and pay by 12 Aug 2010 The investment includes: Course documentation, lunches, refreshments and 15% service charge VENUE INFORMATION The course fee does not include accommodation or travel costs. It is recommended to book the hotel rooms early as there are only limited rooms available at discounted corporate rate. Kindly contact the following for reservation: Novotel Singapore Clarke Quay 177A River Valley Road, Singapore Contact: Julian Egli Business Services Executive General: (65) DID: (65) Fax: (65) : H5993-SM9@accor.com Please quote Pricing and Price Review in Gas & LNG Contracts Workshop Organised by Neoedge to enjoy Corporate Rate. Booking Conditions Should you be unable to attend a substitute is always welcomed anytime before the event at no additional charge. Alternatively, a credit voucher equivalent to the full amount will be issued for you to attend any Neoedge events for up to 18 months. No refund for cancellation within 4 weeks prior to the event. Event Code: T1010GPPR Another Premier Product of Postal Code Country