Gas and LNG > LNG Shipping Economics & Freight Cost Calculations – Virtual Instructor Led Training (VILT)

About this Virtual Instructor Led Training (VILT)

Liquefied Natural Gas (LNG) has provided international mobility to natural gas, which now provides around 25% of the world’s primary energy. Being the cleanest fossil fuel, natural gas/LNG consumption is forecasted to grow in all future scenarios. In the LNG value chain, LNG Shipping is a key element to manage the Supply and Demand sustainably and profitably. Understanding the dynamics of the LNG Shipping Industry in terms of its Economics and Chartering practice is vital to manage the shipping availability and costs in order to optimise the overall trading margin in the value chain.

Recent market disturbances caused by natural gas price instabilities and political challenges (Ukraine/Russia) make a deep understanding of LNG Shipping/Freight issues even more essential to ensure the security of energy supplies for all the actors – producer/sellers, traders, portfolio operators, shippers, and the buyers as well as the Regulators (Energy and Port Regulators) who oversee the commercial activities.

This 4 half-day Virtual Instructor Led Training (VILT) course starts with a concise review of the LNG business. Thereafter, the elements of the LNG Shipping Industry (who are the owners, operators, how is the financing, chartering practices and agreements etc) are described and their individual economics analysed.

Types of LNG ships, the relevant industry trends in terms of Containment and Propulsion systems are discussed in depth, and the interplay between ship characteristics (size, type of propulsion, containment and insulation impacting the LNG and fuel balances) and shipping/charter costs and rates are analysed in depth. An excel spreadsheet model will be built to capture these elements to calculate the overall costs.

Leveraging on model hands-on exercises and case studies, this VILT course will equip the participants with the opportunity to develop their skill in this area by tackling real-life cases. Excel model will be provided to the participants for their private use. Finally, the relevant management systems will be discussed (to see how to track shipping performance and compare with competitors through benchmarking). The VILT course will end with an LNG and Shipping Outlook, discussing the future trends and challenges.

Upon the completion of this VILT course, participants will have gained a sound understanding of the economic and commercial aspects of LNG Shipping with particular focus on voyage economics, freight costs, chartering, and the relevant agreements within the LNG value chain.

Participants will be able to:

  • Understand how the LNG Shipping Industry operates within the LNG Value Chain, bound by the relevant Contracts and Agreements
  • Learn the basic economic parameters relevant to LNG Shipping (capital costs, financing, operating costs, profitability, chartering)
  • Appreciate the crucial role of LNG Shipping in terms of the availability and costs within the LNG Value Chain from different viewpoints (producer/seller, charterer, ship owner, terminal, buyer etc)
  • Develop quantitative skills to work out the (unit) Freight Costs
  • Explore shipping options to maximise profitability in a given situation in the LNG Value Chain
  • Discuss tools and best practices on how to manage, steer and govern these activities

This VILT course is pitched at an intermediate level. Technical, Operational, Shipping, Commercial, Project and Governance professionals already active in a specific section of the LNG Value Chain will directly benefit in developing a wider and deeper perspective on how the LNG Shipping Business operates and can be managed to optimise the overall LNG margins in the value chain.

Managers (Shipping, Technical, Financial, Legal and Governance) less familiar with the specifics of the LNG Shipping Industry will also benefit from this VILT course, as they will get the required background to be able to set sharper targets, suitable performance indicators, and governance and performance assessment guidelines for units engaged in the chain.

The VILT course is most relevant to professionals engaged in the LNG Industry at:

  • National and International Oil & Gas/Energy Companies
  • LNG Importers/Exporters/Traders/Shippers
  • Government & Port and other Regulatory Agencies
  • Finance Institutions

And in particular for:

  • Shipping/Cargo Operators
  • Trading professionals
  • Fleet Managers
  • Planners & Schedulers
  • Business Development Managers
  • Shipping Finance Advisors
  • Joint Venture Representatives

This VILT course will be delivered in 4 half-day sessions comprising 4 hours per day, with 2 breaks of 10 minutes per day.

Course Duration: 4 half-day sessions, 4 hours per session (16 hours in total).

Your expert course leader is an Oil & Gas/LNG professional with more than 35 years of international experience, majority of which was gained at Shell International Joint Ventures engaged in Oil Refining, Supply / Trading, Gas Supply and LNG Businesses in the Netherlands, France, Thailand, Dominican Republic and Nigeria.

Since 2004, he has had several roles in the management of the LNG Value Chain including the Commercial Operational Management of Nigeria LNG (NLNG). He played an active role in the start-up and integration of LNG trains 4, 5 and 6 with NLNG becoming the 3rd largest LNG producer in the world in 2007. Commercial operations spanned 4 Gas Supply, 11 LNG Sales & Purchase Agreements, ad-hoc LPG and Condensate Sales and LNG Ship Chartering contracts. Under his supervision, more than 2,000 LNG cargoes were exported. He was part of the organizational transformation of the company from a Project-based set-up to a Production / Commercial based structure and implemented an “Integrated Planning and Scheduling Department”” in which he optimized the value chain (Buy-Gas – Liquify Gas to LNG – Sell – Ship LNG). Staff competence management was one of his focus areas during this period. He was also the NLNG representative on JV Technical, Commercial, Shipping Committees where he interfaced with Government & Regulatory authorities.

In 2014, he was appointed as Shell Shareholder representative to NLNG and became a Non-Executive Board member to NLNG companies, including Bonny Gas Transport (BGT) managing 24 LNG Ships. During this period, he was involved in the Economic and Technical steering of the Shipping Fleet and Liquefaction Plant Rejuvenation projects and a further capacity expansion of liquefaction plant which resulted in the achievement of NLNG train 7 project FID in 2019.

Since 2016, he has been active as an independent consultant. He co-authored 2 patents and more than 30 published papers/presentations. He holds a PhD from Delft University of Technology in the Netherlands and a MSc and BSc in Chemical Engineering from the University of Birmingham, UK.