FLNG Fundamentals 2014

Considerations for Technical and Commercial Analysis of an FLNG Project

Key Learning Outcomes: Review the global LNG Industry including current Australian projectsRecap global natural gas prices: Henry Hub, UK NPB and the Japans JCC. Discuss the indexation of the natural gas price to the oil price. Review the concept of Energy Equivalent Pricing of natural gas. Detail how LNG is priced with reference to the S curve formulaDiscover how to forecast natural gas prices in all markets. Consider the tools of the trade used to evaluate projectsIdentify the major capex and opex expense line items associated with a typical LNG projectLearn to build a financial model to analyse the suitability of an LNG project. About the Course: This 2-day intensive course is designed to provide participants with a set of professional skills necessary to undertake a comprehensive evaluation of an LNG Project. The course begins with an overview of the global natural gas and LNG industry and details the current status of Australian LNG projects. This is followed by a detailed discussion of the relationship between the price of natural gas and the price of oil, followed by a consideration of global natural gas price trends (Henry hub, NBP, the Japanese JCC and Chinas Guangdong LNG price).Participants will also learn how to forecast the price of natural gas. This is followed by the examination of the price relationship between the spot and the futures markets for natural gas and convergence theory.The S curve price model for LNG will be developed using practical examples. A detailed discussion of project evaluation tools of the trade will be developed to show how to objectively assess an LNG project. Throughout this session, the material is soundly supported by computer based modelling.The second day of the course delves into the basic business model of an LNG joint venture partnership, the choice of a gas hub and a FLNG platform, the role and importance of the PSA and SPA.