Adopting good industry practice to maximise the value of LNG contracts
Commercial Advisory – Gas & LNG
The Engagement:
Commercial Advisory
The Client:
A privately-owned energy and services company with significant business interests in oil, gas, power and construction in Africa across the full commodities value chain
The Challenge:
The company had decided to enter the LNG market, purchasing significant volumes from a major producer through an MSPA and was seeking advice on the optimal monetisation of the volumes.
Duration:
3 months
How Energex helped:
- Provided an expert review of existing LNG MSPA and associated confirmation notices, including an in-depth analysis of key commercial and operational terms for the purchase of a multi-annual physical strip of LNG cargoes
- Provided best-practice insights, references and experience in order to benchmark the LNG purchase contract vs. market standard LNG offtake agreements and create gap-analysis reports
- Explored optionality embedded within the supply and developed an appropriate marketing strategy
- Assisted in the execution of the marketing strategy by the introduction of the client to multiple counterparts identified as those best able to recognise the value of the optionality and with the required scale of operations to manage the volumes
Tangible Impact:
- Identified and clarified areas of both risk and additional value in the transaction, enabling the client to take the necessary steps to manage both
- Identified optimal but realistic terms for preparation of their own LNG MSPA
- Benchmarked option value
- Facilitated transactions with new counterparts enabling effective competition between buyers and hence improved value to the client
- Knowledge transfer on LNG business, on both the transaction and physical sides