LNG Trading Strategies

LNG TRADING STRATEGIES 

Current Issues in LNG Trading Optimisation, Risk Managment and Market Development

June 2, 2010 ~ London

2009 and this year were particularly difficult for the LNG industry. The global slump in gas demand due to the financial crisis resulted in historically low gas prices. Several production projects have been delayed due to these and other economic factors. Overall, the level of LNG spot trading was on the decrease due to lack of significant arbitrage between the Atlantic and Pacific Basins. Moreover, the levels of shale gas production in the United States can potentially disrupt the projections for LNG demand in near to mid-term future.

At the same time, the LNG market saw new entrants willing to take risk. There is an increasing consensus that the LNG market is moving toward greater liquidity, not only in terms of volumes but also in terms of interaction between liberalised and closed markets. The market participants also anticipate emergence of new regional players capable of absorbing LNG not only in the midst of the heating season, but also during traditionally less attractive summer months. The new hubs of spot demand will not only prove to be significant price drivers in the industry, but also play a significant role in formation of competition to the traditional LNG buyers in the US, Europe and the Far East. One such key recent development has been the emergence of the Middle East not only as the key producer of LNG, but also as a strong consumer.

The current pressure on demand has led some industry players to believe that the market could face a scenario of demand destruction. This could provide a pivotal push for re-consideration of the traditional pricing models not only in terms of short-term, spot sales but also in the ways new long-term contracts are concluded. Moreover, the global slump in demand and the associated reduction of spot flows have led to stagnation of LNG shipping markets. With the charter rates hitting historic lows, some ship-owners are concerned about the future of the industry. However, new projects which are coming on stream are expected to absorb the current oversupply of vessels which will in turn create significant rises in transportation costs.

New pricing scenarios and markets also require utilisation of highly-complex hedging mechanism to minimise risk in LNG trading. 

New entrants to the markets are beginning to utilise the risk management mechanism to achieve significant profit levels previously limited to back to back transactions. These and numerous other pertinent questions will be addressed during the "LNG Trading Strategies” Summit scheduled to be held in London 2 June 2010. 

Among the main topics to be discussed: 

• Key aspects of LNG trading
• Latest strategies in hedging and risk management
• New market entrants and their impact on liquidity and pricing
• LNG trading in the context of demand destruction scenarios
• Emergence of new regional markets 
• Changing arbitrage dynamics 
• Challenges facing the shippers in the present environment
• Interplay between LNG and pipelines gas in liberalized markets


In the course of this summit, you will be able to discuss problematic issues facing the LNG industry with your peers, find out the answer to the critical questions that impact the way in which you conduct business, and form new business contacts. Among the summit's participants are the leading specialists in the LNG industry, including traders and risk management professionals.

In order to participate in the capacity of a delegate or speakers, please contact us. We look forward to seeing you at the summit.