Fundamentals of LNG
Operational and commercial essentials of the
Liquefied Natural Gas (LNG) sector - training
course by tutored distance learning
Commences: 10th May 2016
Delivered by tutored distance learning
Introducing LNG: Background, Properties, Production and Use
This module is designed to give an overview of the natural gas and LNG
industries and to cover some of the important fundamental issues that later
modules will build upon. It will also introduce some of the specialised technical
terms and jargon which exist in all industries. This module will also introduce the
various units of measurements that are used in the LNG industry worldwide.
What is LNG and how does it fit in to the global natural gas industry?
Reserves
Extraction and production
International transportation of gas and LNG
Background to the LNG industry
History
Key players
Key differences between natural gas/LNG and oil
Sources and properties of natural gas and LNG
Natural gas and LNG: definitions and composition
Production and processing of LNG
Main uses of natural gas and LNG
The residential, commercial and industrial markets
Conversions: LNG and natural gas; natural gas/LNG and other energy
sources
Production to Shipping
This module introduces the concept of the value chain, its economics and a
detailed discussion of the first parts of the chain from gas production through to
LNG shipping
Introducing the value chain
Economics of the LNG value chain
Cost issues
Production of Natural Gas Liquids and Liquid Petroleum Gases
Exploration, production and transportation of gas to the liquefaction plant
Tax and royalty
Production sharing and service agreements
Liquefaction
The liquefaction train
Economies of scale
Liquefaction plant operations
Floating Liquefaction (FLNG) and small-scale liquefaction plants
Shipping
Introduction to LNG shipping
The LNG fleet
Drivers of growth
Key players
LNG ship finance
Freight calculations
Safety and environmental issues
Regasification to the End-User
The purpose of this module is to build upon the information provided in Module 1
and to understand the initial parts of the LNG value chain.
Regasification
Elements of a regasification terminal
Optimising regasification terminal design and operations
Land based and floating terminals
Safety, environmental and permitting issues
Transportation from regasification terminal to end users
Pipelines
LNG in different types of markets
LNG as the only form of gas supply
LNG as a small element of a predominately pipelinesupplied market
LNG and pipeline supply as approximately equal suppliers
LNG in liberalised gas markets and Third Party Access issues
End-user issues
Combined Cycle Gas Turbine (CCGT) power plants
LNG as a ships fuel
Industrial users
Domestic and commercial users
Sales contracts to end-users and the ability to align these with LNG
contracts
LNG as a floating pipeline
Differing legal systems
LNG value chain: conclusion
LNG Markets, Supply and Demand
The purpose of this module is to provide an understanding of the issues
impacting the market for LNG worldwide and the specific issues relating to the
global supply and demand for LNG.
LNG in the context of global demand for energy
The global supply of LNG and its principal outlets
Geographical overview of markets
Main suppliers
Main buyers
Changing patterns and emerging markets
New markets and new trade routes
Supply security issues
Gas and LNG in a carbon constrained world
Diversity of supply and flexibility of destination
Producers dilemma: exports vs. domestic demands
LNG Pricing and Trading
The purpose of this module is to provide an understanding of the issues
impacting the market for LNG globally and the specific issues relating to the
global pricing of LNG.
Principles of gas and LNG pricing
Pricing regimes in the various global markets
Cost components
Gas price indexation
Pipeline gas vs. LNG prices
Long term vs. spot prices
LNG and gas trade
How LNG and pipeline gas compete
How LNG can complement pipeline gas
Trade barriers
Differences between long term and short term trading
Emerging LNG spot trade
The evolving dynamics of LNG trading
Short term LNG contracts and Master Sales Agreements
Global trade practices
Risk management
Payment security and guarantees
LNG Projects, Contracts and Future Trends
The purpose of this module is to provide an understanding of the ways that LNG
projects are structured, the main contracts that underpin this structure and a
discussion of the terms of a LNG SPA.
LNG Projects
The Joint Venture Model
Financing LNG projects
Project decisions
Developments of the Joint Venture Model
Other project models (e.g. tolling)
The role of governments in LNG projects
LNG business models
Liquefication JVs
Import Terminals
LNG contracts (Sales and Purchase Agreements)
Main features of an LNG contract
Long term vs. short term
Free On Board (FOB) vs. ex-ship contracts
The process of getting to a final agreement
Term sheet
Heads of Agreement/Memorandum of Understanding
Full agreement
Negotiating process and time required
LNG outlook and future trends
Opportunities for the industry
Potential threats
