How to avoid lost gas swing value and hidden portfolio risk

Increased liquidity and competition in European gas markets has resulted in the ability to take advantage of the flexibility and constraints in long term agreements. With optimisation techniques improving, it is becoming easier to maximise the value derived from these agreements. In this paper, Lacima discusses the importance of accurately valuing the complex terms in a gas swing contract to achieve maximum value, and how this impacts the whole portfolio and hedging decisions.