LNG Business Fundamentals

During this five-day program, participants learn the fundamentals of the LNG business from gas supply to markets, essentially the full LNG value chain. This includes the technology, operations, markets, financing, legal agreements, project management, and commercial transactions that impact the integration of gas supply, liquefaction, transportation, receiving terminals, and end markets. The learning format is a combination of lectures, class discussion, and a stimulating LNG business simulation game. This course design guarantees that participants will learn the full extent of the LNG business in a challenging and interactive way that consistently leads to high praise.

Business simulation sessions involve teams of participants facing important decisions associated with the commercial, legal, financial, design, planning, and development of a challenging LNG project. Participants will assess and contract to sell LNG to various market options, negotiate project financing, and develop the project while considering realistic challenges and constraints that are typically faced by the developers of large energy projects. At the end of the program, they will be asked to present their teams decisions and business results in a friendly learning competition to win the team prize.

Additional information

Program Type

Key Benefits

  • Provides an introduction to the international gas industry and key industry terms
  • Presents each element of the LNG value chain, from upstream exploration and gas supply to marketing and sales in the destination country
  • Covers the technology, design options, and project economics of three key sectors of the industry: liquefaction, shipping, and receiving terminals
  • Outlines LNG market trends, present-day pricing options, and major terms of LNG purchase and sale agreements
  • Demonstrates how LNG arbitrage occurs today with LNG spot cargoes that can be directed to any major market
  • Discusses the major management needs of an LNG facility in order to make it a viable and efficient operating entity
  • Learning is internalized by team participation in a challenging LNG business simulation game

Who Should Attend

This program will benefit managers, government officials, and specialists in one or more functional areas of the international energy industry who seek a comprehensive understanding of the liquefied natural gas sector of the international gas industry.

Instructional Format

This intensive program has a lecture and workshop format. Through an innovative workshop and business simulation, participants, working in teams, make real-life technical and financial decisions that confront managers in the international LNG business today

Program Content

The program sessions are identified in brown and the content of one or more lectures are shown below these titles.

Natural Gas Hydrocarbon Properties and Conversion Factors

Natural gas hydrocarbons and their chemical properties, gas volume, and thermal energy measures; gas industry terminology and LNG acronyms. Gas quality, heating value, density, gas liquid yield; comparative energy value analysis: natural gas, LPGs, condensate, LNG.

Gas Market Fundamentals

  • Gas Market Fundamentals
  • Overview of the International Gas Markets
  • LNG Value Chain, Global Market History and Trends

Market structure and value chain; gas market sectors; historical gas market supply and demand in various regions of the world and projected future demand. LNG value chain; LNG business history; future market trends. Pricing options: base and indexing options; liberalized market pricing; current pricing in Asia, Europe, North America, potential hybrid pricing. Locations of supply, liquefaction, receiving terminals. Key players: sellers, buyers, NOCs, IOCs, lenders and banks, joint ventures, ministries, legal firms.

LNG Project Fundamentals

  • Overview of Gas Supply for an LNG Project
  • LNG Liquefaction Plants
  • LNG Transportation and Receiving Terminals

Gas supply: exploration, drilling, resource estimation, field development; natural gas processing, gas liquids, market options; LNG liquefaction plants: design, technology, development schedule, capital costs; LNG ships: technology, operating fundamentals and capital costs, ship ownership options; LNG receiving terminals: design, technology, capital costs, third party tariffs.

LNG Legal Fundamentals

  • LNG Sales and Purchase Agreements: History, Protocols, and Documents
  • LNG Shipping Agreements
  • LNG Joint Ventures and Operating Agreements

Major legal agreements; joint venture agreements; LNG sale and purchase agreements: terms, history, relationships, negotiating team composition, legal terminology issues; charter party for LNG ships, receiving terminal access agreements.

LNG Commercial Fundamentals

  • Energy Project Economics
  • Project Financing of LNG Projects
  • Introduction to FEED Contracts and Tendering Processes

Project economics: economic yardsticks, cash flow, tax expenses, internal rate of return, risk assessment, sensitivity analysis; project financing: commercial debt structuring; project risk analysis; FEED and EPC tendering and contracting.

LNG Project Management

  • The LNG Stage-Gate Process
  • Stage 1: Assessment of LNG Project Opportunity
  • Stage 2: Project Development Optimization
  • Early Estimation of Project Costs and Schedule
  • Management of LNG Project Environmental and Socioeconomic Impacts
  • Stage 3: Requirements and Execution Planning

Stage-Gate project management process; project alignment and integration of the full value chain; fulfilling the requirements of Stages 1 and 2: from opportunity assessment to project optimization; planning for Stage 3. Estimating project costs, schedule, risks, environmental and social impacts, and capital funding.

Workshop

Cosmos: The LNG Business Game

During the workshop sessions, teams of participants will face important decisions associated with the commercial, legal, financial, design, planning, and development of this challenging LNG project. They will assess and contract to sell LNG to various market opportunities (Brazil, China, U.K., and spot market), negotiate project financing, and develop the project while considering realistic challenges and constraints that are typically faced by the developers of large energy projects. Participants will present their teams decisions and business results in a friendly learning competition to win the team prize.

Your company has made a major rich gas discovery offshore the Republic of Cosmos in East Africa, and your team has been asked to manage its development as a major LNG export project following the Stage-Gate project management process. During the workshop, you will progress the project through Stages One and Two. In Stage One you will assess the gas resource, define the scope of the LNG project, and state the business case for development. During Stage Two you will consider development options including technology selection, conceptual design, execution strategy, costs and schedule estimates, and project financing.

The sessions include:

  • Workshop Orientation
  • Joint Venture and Upstream Analysis
  • Project Economics
  • Liquefaction Facility Design
  • LNG Shipping Options
  • Receiving Terminal Options
  • Market Analysis and Final Integrated Decisions
  • Evaluation of Performance and Presentation of Results