LNG Value Chain and Economics - G-53

Liquefied Natural Gas (LNG) has provided international mobility to natural gas, which now provides around 25 % of the world primary energy. Being the cleanest fossil fuel natural gas/LNG consumption is forecasted to grow in all future scenarios. With the entry of various actors, including Trading companies, the LNG value chain is becoming increasingly complex, and solid understanding of its economics and management of its interfaces have become crucial to identify and assess investment opportunities and risks. Recent market disturbances make a deep understanding of LNG Value Chain Logistics and Economics even more essential to ensure security of energy supplies sustainably and profitably. This course starts with a concise introduction to the LNG business. Thereafter, the elements of the LNG value chain are described, and their individual economics analysed. A Business Activity Model along the value chain will be developed and discussed in depth, covering the following key processes: Buy Gas -> Transport Gas -> Liquefy Gas -> Sell LNG/Products -> Ship LNG -> Regasify LNG The integrated chain economics will then be developed and quantified. A hands-on group workshop/exercise developing the economic case of a full-size Liquefaction project will be carried out, considering the forecasted cash flows throughout the project life, the location of the plant, its markets, project sensitivities and profitability assessment. Excel based tools/models (LNG Liquefaction project development NPV analyses, Shipping Freight Calculations and Economics) will be provided to the participants for these exercises and their future personal use.