Liquified Natural Gas (LNG)

LNG risk management, valuation and optimisation

  1. Diverse physical asset and financial contracts 
  2. Physical transportation deals such as shipping and storage
  3. Geographical LNG prices and the resulting spreads

... present great challenges to the risk analysis and valuation of power contracts and assets

Be confident that you are working with specialists that understand your LNG challenges.

In dynamic and volatile environments such as the LNG and gas markets, risk management becomes increasingly complex and requires dedicated software, as well as specific policies and processes in place.  LNG players face numerous risks especially in market and volumetric risks, therefore a comprehensive approach to risk identification, management and ultimately mitigation is a requirement to succeed.  

LNG companies require software that can capture both financial and physical elements of LNG trading, marketing & transportation. 

Our software and consulting services draw on the models and methodologies developed by Lacima’s founders through their acclaimed research and published works. 

Our solutions help you to value and risk manage LNG and gas portfolios that include transportation & shipping contracts and the optimisation of LNG shipping destinations to value the divertability in shipping.

We can help you with LNG risk management and valuation challenges you face:

  • Assess the relevant risk metrics based on players with physical LNG and gas assets
  • Analyse hedging strategies to best manage your LNG and gas exposure either as a producer, transporter, storage provider or large consumer
  • Understand the most relevant models to capture the unique characteristics of global LNG prices
  • Assess valuation frameworks that accurately value long-term LNG contracts and index deals
  • Capture all the parameters of complex derivative contracts such as index spreads and locational spreads
  • Value and optimise the transportation and shipping of LNG to multiple locations
  • Capture all typical LNG shipping contract parameters such as boil off rates, canal fees, charter fees, loading & offloading costs
  • Analyse large books of LNG and gas derivative deals
  • Scenario analysis such as “what-if” deals, stress testing on prices or volumes, Monte Carlo simulation, and other advanced risk management techniques
  • Understand your VaR changes and changes with VaR attribution
  • Report company-wide risks across your assets and drill down to individual regions, products, trading desks or even trader to really understand your risks and sources of value
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