LNG Sales, Marketing and Trading

Explore energy, volume, and mass units in LNG and natural gas, such as Btu, MMBtu, MWh, GJ, cf, m3, and tonnes per annum, and their heating value for trading.

Explore back-of-envelope formulas for converting natural gas and LNG units, using approximate energy content and scale assumptions to quickly assess reserves and plant requirements.

Incoterms define buyer and seller obligations in international trade, standardizing shipping, insurance, and customs; in LNG, terms include FOB, CIF, DES, and DAT, with DES replaced by DAT and DAP.

Learn LNG tanker classification by containment systems and propulsion, comparing membrane and Moss designs, cargo capacities from under 40,000 to 266,000 m³, and TFDE engines with boil-off gas and reliquefaction.

Balance ownership, long-term or voyage charters, capex and opex, and cost certainty. Weigh vessel size, tank type, fuel options, and emissions to optimize LNG sales, marketing and trading outcomes.

Analyze three drivers of LNG shipping costs: vessel day rates, boil-off fuel costs with TFDE engines, and canal and harbour fees, as spot rates vary and long-term rates stay stable.

Examine LNG's role in the global energy mix: LNG accounts for 15% of natural gas and under 4% of total primary energy. Consider how coal-to-LNG substitution could boost LNG demand.

Explore how Qatar, Australia, and the United States emerged as the three dominant LNG exporters, each delivering about 20% of a 402 megaton market, with distinct growth paths.

Trace australia's LNG rise from the northwest shelf consortium led exports, to 2010–2015 projects, cost overruns on gorgon, domestic gas price pressures, and current pause on new projects by 2024.

Trace how shale gas unlocked the US rise to becoming the world's largest LNG exporter, led by Cheniere's tolling model, Sabine Pass cargoes, and pricing structures.

Examine the main LNG market players—NOCs, IOCs, tollers, and trading houses—and how Shell, Cheniere, Venture Global, Glencore, Trafigura, Vitol, and Gunvor shape liquidity.

Compare two LNG marketing models: joint marketing, selling all cargoes via the JV and distributing proceeds by equity, and equity lifting, where participants market their own cargoes.

Explore tolling formulas where LNG price equals beta times Henry Hub plus alpha, with 115% beta and 2.7 per MMBtu alpha, showing pass-through of costs and no floor or ceiling.

Explore LNG pricing choices and volatility by contrasting spot prices with long-term formulas and netback tolling, illustrated by Brent-indexed des, Henry Hub tolling, and JKM.

Examine how LNG SPAs define long-term delivery terms, including price reviews, volume flexibility, destination restrictions, and risk allocation, highlighting size and lack of standardization compared with crude oil contracts.

Explore the annual contract quantity (acq) and its uqt and dqt tolerances, aacq, and take-or-pay obligations, and how acq feeds into the adp and sds.

Understand how reserve unallocated cargoes, or rucs, support operational flexibility and spot-market upside in the ADP and SDS.

Explore joint supply versus equity supply for feed gas sourcing in LNG ventures, including hybrid options and key issues like gas quality, contamination, scheduling, and cost allocation.

Understand delivered cost and netback as non-GAAP LNG metrics, with bottom-up cost components and the influence of RT versus MOD valuation on interpretation and decisions.

Analyze how the growing LNG market boosts trading and joint venture dynamics, with equity lifting, cost-plus tolling, and long term SPAs shaping project financing.