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LNG - Key Trends and Drivers of Market
Thank you
Aditya Shankar 500074495
Akhil Krisnan 500077530
Angshuman Das 500074071
Inba Arasan 500077640
Rohan Katore 500076245
References:
C O N T E N T S
HIGHLIGHTS(2018-19)
COVID19 (2020 Scenario)
DRIVERS
INDIAN -STRATEGY
LNG PORTFOLIO
LNG HIGHLIGHTS 2018-2019
COVID 19 Impact
2020 Scenario
Coal to Gas switching
warmer winters
reduced economic activity
LNG Buyers
LNG Producers
Topics covered
2%
JAPAN
JAPAN HIGHLIGHTS
Financial crisis 2009
SOUTH KOREA
South Korea Highlights
CHINA
China Highlights
INDIA
INDIA Highlights
Europe
Largest ever
Europe highlights
United States
Global demand
Global supply
USA Highlights
Import
Export
Optimise LNG PRODUCTION &
TRADING
New digital tools and capabilities
Opportunistic M & A
LNG Buyers - What must be done
Down stream Integration - Continued Market access
"A prolonged supply glut and lower-for-longer price environment will have significant implications. Beyond the near-term financial impact on upstream gas producers and LNG suppliers, development of future liquefaction projects may be at risk as tougher market conditions make it harder to approve new projects in the near term."
"On the flip side, new opportunities will emerge for natural-gas buyers. With a sustained lower LNG price, the case for investments that promote switching from coal to gas is now stronger."
LNG Producers -what must be done
Drivers of LNG
*Increasing annual capacity of LNG terminals to 70 million tonnes
Gas Production and LNG import of India
Future Trends
INDIA'S LONG TERM STRATEGY
Challenges
1. Constraints and stress points in the LNG supply chain
2. Changes in market dynamics.
How is LNG portfolio value created? The most accurate answer is probably ‘in a bar over a five o’clock beer’… But behind the deals that underpin a portfolio, value is created via the interaction between:
Analyzing portfolio value
LNG portfolio value creation poses a unique set of challenges:
1. Value interdependence: the value of individual LNG assets within a portfolio is interdependent, given the physical and contractual complexity of the LNG supply chain.
2. Unique portfolios: each LNG portfolio is unique given, for example, specific exposures, constraints, logistics, trading strategies and tax implications.
3. Market illiquidity: the LNG market remains relatively illiquid and has complex physical and contractual logistical constraints.
4. LNG price dynamics: prices do not follow standard normal distributions(!), and standard pricing models do not capture the complex relationships across regional price markers.
Breaking It Down
Value creation is underpinned by an understanding of how an LNG portfolio responds to changes in market conditions. For example, being able to quantify the value impact of a shift in Brent vs TTF pricing dynamics.
Value is captured via constructing and optimizing an appropriate combination of portfolio components and optionality
The distribution of base portfolio value is shown in blue. It is generated by simulating multiple (500+) correlated Henry Hub, TTF, JKM and Brent price paths and optimizing portfolio value against each price path.