Meet the Timera team: ‘Regime change’ LNG webinar
Our feature content this week is video based for the first time. You can meet some of the Timera LNG team members in a recording of our recent ‘Regime change’ LNG webinar.
Click here for the ‘Regime change’ slide pack from the webinar.
Click here to watch the ‘Regime change’ webinar video recording.
Table 1 provides a ‘key takeaway’ summary to webinar coverage of the LNG market impact of Europe’s pivot from Russian gas to LNG.
|1. Europe driving market||Europe aggressively competing with Asia for constrained supply until at least 2025||Global prices set to remain elevated 2022-25|
|2. Flex inhibited||High prices & policy mandates acting to materially inhibit European flex provision||Demand response replaces European flex as key driver of marginal prices|
|3.Price volatility||Reduced market flexibility & major collateral/liquidity constraints||Structurally higher price volatility & shifting correlations|
|4. Tight market 2022-25||New regas capacity but limited new supply||New regime market conditions drive value & risk; liquidity & collateral challenges remain|
|5. Risks increase 2025+||Demand uncertainty & supply response increase uncertainty 2025+ (further regime change?)||Portfolio construction & contracting strategies key for value creation & risk management|
Table 2 covers key takeaways on the LNG portfolio impact of market regime change.
|1. Game changer||- New market regime causing seismic shifts in LNG portfolio value… creating opportunities & risks|
|2. Portfolio construction||- Market transition in 2022 is triggering major strategic reviews across LNG companies|
- Conditions rich with opportunities to deploy capital, invest in assets and aggregate portfolios
- As important as capturing value from the current regime is being prepared for the next one (e.g. Chinese SPA activity)
|3. Value management||- High prices & volatility drive importance of dynamic management of interdependent exposures|
- Within portfolio value capture key (high margins vs poor liquidity); large incumbent advantage
- Price signals driving relative values of flex (e.g. towards diversion flex, away from US cancellations)
|4. Prompt optimisation||- Higher proportion of value monetised via optimisation within year (+ liquidity / logistical constraints)|
|5. Risk management||- New regime = step change in portfolio risk; credit/collateral issues require active management|
- Capabilities drive advantage (e.g. team, analytics, systems, data)