Structuring Natural Gas Transactions
This course builds on the Applied Energy Derivatives program, focusing on deal structuring opportunities particular to the Natural Gas markets.  Participants will develop insights into the economic inter-relationships between the physical operations (pipelines, storage, generation, etc.) and their synthetic financial counterparts (basis, time spread and multi-fuel derivatives).  Emphasis is directed at identifying marketing opportunities that follow from these concepts.  This is not an introduction to natural gas markets.  Accordingly participants are expected be familiar with the basic concepts of both the gas industry and derivatives.

Participants attending this seminar will be able to:
* Quantify the cash liquidity risk of futures margin requirements
* Specify the terms of the futures contracts on NYMEX and KCBOT
* Structure a fixed price hedge using a futures contract

* Take into account the implications of cash-futures basis in hedge design
* Compare the benefits/risks of futures versus swaps 
* Decide between an EFP or an EFS to manage risk.
* Recognize the advantages and risks of stack-and-roll hedges
* Identify time spreads as a risk and opportunity and their relation to storage.
* Arbitrage storage costs and create storage synthetically with time spreads.
* Employ swing swaps/options to manage short term storage/transport risks
* Profit from trading seasonal spreads and price curve shifts
* Identify the options on time spreads embedded in storage
* Coordinate injection/withdrawal timing with the price curve.
* Identify the risks of locational basis and its relationship to transport costs.
* Create synthetic transportation 
* Interpret basis quotes off the benchmark and derive non-benchmark basis 
* Recognize the optionality embedded in pipeline capacity
* Utilize intentional imbalances to extract value
* Use "park-and-loan" programs to make money
* Sell "gas-by-wire" through tolling mechanisms
* Buy or sell gas indexed to power or other energy prices
* Calculate spark spreads using generating heat rates
* Structure multiple-fuel hedges
* Understand the optionality on spark spreads in gas-fired generation
* Offer gas/power dispatch options to gas generators

Michelle Lokay
Account Director
Transwestern Commercial Group
713-345-7932