Markets / Natural Gas

Transport

 

Your Challenges

Analysing gas transport assets or capacity and their effect on the portfolio

Understanding risk profiles of gas transportation assets and contracts

Valuing gas transport consistent with market traded option prices

Valuing gas transport using accurate estimates of price volatility and seasonality

Explaining to senior management the intrinsic and extrinsic value of gas transport

Applying a hedging, or trading strategy to lock in value, monetise volatility and manage risk

We Understand Your Market

Increased LNG imports, the collapse in the oil price, demand reductions from the pandemic, variability in hub demand, and shifts to hydrogen are creating significant opportunities for traders and holders of gas transport assets to experience increased returns, but are also creating additional risk from holding such assets. These unique market dynamics underpin the need for a specialised approach to energy trading and risk management for natural gas transport market players.

Be confident that you are working with specialists that understand your transport valuation challenges. With many years of experience, we see your gas transport valuation concerns from a practical, real-world perspective.

Our Solution

Lacima offers two solutions for natural gas transport market participants: Lacima Trader and Lacima Analytics – providing a complete solution from structuring and trading to risk management of portfolios of transportation contracts.

Lacima’s solutions use the same consistent models and methodologies to capture the unique market characteristics whilst providing the comfort of stress testing and scenario analysis tools to analyse future uncertainty.

Whether you are in Trading, Structuring & Origination or in Risk Management, use Lacima’s solutions to accurately value gas transport contracts and physical assets and support key decision making by leveraging Lacima’s risk solutions to gain deep insights into the drivers of risk and how they change through time. Lacima calculates the full range of market and credit risk metrics including Earnings-at- Risk and Revenue-at-Risk, as well as more standard risk management metrics such as Value-at-Risk (VaR) and Potential Future Exposure (PFE), for superior trading and risk management results.

Traders, Structurers and Energy Risk Managers can enjoy a range of benefits including:

  • Value and hedge the intrinsic and extrinsic value of a gas transport contract
  • Identify trades required to rebalance to optimal positions for monetisation of trading strategies
  • Obtain real-world actionable outputs including optimal position, individual trade profit and loss, and a full set of Greek sensitivities
  • Analyse and obtain detailed drilldown to the sources of value with an exhaustive list of output properties for all models including Greeks, unit Greeks, and individual simulations
  • Flexibly design bespoke gas transport dashboards
  • Integrate with market data from 3rd party providers like Bloomberg, Reuters or Trayport
  • Stress Test inputs such as market prices, volatilities or correlations to quantify potential effects on transport valuation and hedges required
  • Calibrate to market implied volatilities as well as calibrating to historical data