Course Overview

The global natural gas industry plays a vital role in the evolving energy landscape, influenced by changing market dynamics, geopolitical developments, and the transition towards cleaner energy sources. Understanding international gas markets, trading mechanisms, and project economics is essential for making informed commercial and investment decisions.

The International Gas Markets and Trading programme by Transformentors Academy provides participants with a practical understanding of the global natural gas and LNG industries, covering market structures, resource evaluation, shale gas developments, and international trade dynamics. The course explores the economic drivers of gas projects, including commodity pricing, capital and operating costs, taxation, royalties, transportation, and fiscal regimes.

Through practical applications and industry case studies, participants will develop the skills to perform economic evaluations, understand cash flow analysis, assess project profitability, and support investment decision-making. The programme bridges theoretical concepts with real-world industry practices, enabling professionals to navigate the complexities of international gas markets and energy trading with confidence.

Agenda

Day — 1 General Industry Overview

• Understanding the nature and characteristics of natural gas
• Exploring the global natural gas and LNG marketplace
• Reviewing methods for estimating gas reserves and resources
• Examining the development and economics of shale gas projects
• Understanding shale gas development processes and technologies
• Assessing the impact of shale gas on global LNG markets
• Analysing shale gas development costs and economic drivers
• Evaluating new unconventional gas (UG) plays and investment opportunities
• Identifying common challenges and practical solutions in shale gas development
• Case Study: Assess the commercial viability of a new shale gas development project

Day — 2 Why Economic Evaluation

• Understanding the importance of economic evaluation in oil and gas projects
• Reviewing typical objectives of oil and gas companies
• Exploring inflation and its impact on project economics
• Comparing different types of inflation and consumer price indices (CPI)
• Understanding simple and compound interest concepts
• Distinguishing between nominal and effective interest rates
• Applying the principles of the time value of money
• Identifying key risk factors affecting investment decisions
• Calculating future and present values of cash flows and annuities
• Understanding the conditions and applications of annuity models
• Using spreadsheet tools for economic evaluation and financial analysis
• Exercise: Build a simple cash flow model to evaluate an oil and gas investment project
• Problems & Solutions: Practical applications of economic evaluation concepts

Day — 3 Before-Tax (BTAX) and After-Tax (ATAX) Cash Flow

• Understanding the fundamentals of cash flow (CF) in oil and gas projects
• Forecasting cash flows and identifying key project variables
• Reviewing basic data requirements for cash flow modelling
• Forecasting production and revenue streams
• Identifying cost elements, including CAPEX and OPEX
• Developing before-tax net cash flow models
• Understanding natural gas processing and typical oil production facilities
• Reviewing historical oil price trends and their impact on project economics
• Exploring facility cost breakdowns and economies of scale
• Analysing capital costs during production and operating cost structures
• Applying rules of thumb for cost estimation and transfer pricing
• Comparing different types and levels of cost estimates
• Calculating gross revenue and developing sample before-tax cash flow models
• Understanding the structure of typical project cash flow diagrams
• Exploring after-tax cash flow concepts and additional financial variables
• Reviewing depreciation methods:
  • Straight-line depreciation
  • Declining balance depreciation
  • Declining balance with switch to straight-line
  • Sum-of-the-years’-digits depreciation
• Understanding depreciable asset lives and their impact on project economics
• Developing sample after-tax cash flow models
• Applying spreadsheet techniques for financial analysis and project evaluation
• Exercise: Build and compare BTAX and ATAX cash flow models for an oil and gas project
• Problems & Solutions: Practical cash flow modelling and investment analysis exercises

Day — 4 Capital Budgeting Techniques

• Understanding decision criteria and profitability indicators for oil and gas investments
• Reviewing payback period and discounted payback period methods
• Applying Net Present Value (NPV) for project evaluation
• Identifying common limitations and misuse of NPV
• Understanding Internal Rate of Return (IRR) and its applications
• Recognising the limitations of IRR and multiple rate of return scenarios
• Exploring economic solutions for projects with multiple IRRs
• Applying the Profitability Index (PI) in investment decisions
• Understanding Unit Technical Cost (UTC) and Long-Run Marginal Cost (LRMC) of gas
• Reviewing cash flow discounting frequencies and their impact on project valuation
• Understanding the relationship between funds flow and discounting frequency
• Applying spreadsheet functions for financial modelling and probability analysis
• Exploring the relationship between cost of capital and project cash flows
• Differentiating between:
  • Equity Cash Flow (ECF)
  • Free Cash Flow (FCF)
  • Capital Cash Flow (CCF)
• Combining cash flow models with Weighted Average Cost of Capital (WACC)
• Understanding Netback Value (NBV) and gas pricing methodologies
• Reviewing base-year, rate of return, and LRMC pricing approaches
• Exploring indexed netback pricing and LNG netback calculations
• Exercise: Evaluate an oil and gas investment using NPV, IRR, PI, and netback pricing methods
• Problems & Solutions: Practical capital budgeting and project valuation scenarios

Day — 5 International Petroleum Economics

• Understanding global energy consumption trends and market dynamics
• Exploring the need for collaboration in international petroleum projects
• Identifying key parties involved in upstream oil and gas agreements
• Reviewing typical contract terms and contractual arrangements
• Examining fiscal systems used in the petroleum industry
• Understanding concessionary and production sharing contract (PSC) cash flow structures
• Exploring dynamic contract terms and their commercial objectives
• Reviewing investment selection and decision-making processes
• Comparing different types of investment decisions and project screening methods
• Evaluating revenue-producing investments using NPV, IRR, and Profitability Index (PI)
• Understanding NPV and IRR conflicts and applying incremental investment analysis
• Ranking investment opportunities under both unrestricted and budget-constrained scenarios
• Assessing service-producing investments, including projects with unequal asset lives
• Analysing lease-versus-buy decisions in capital-intensive projects
• Introducing decision analysis techniques for petroleum investments
• Case Study: Evaluate international petroleum investment opportunities under different fiscal and contractual regimes
• Problems & Solutions: Practical exercises in petroleum economics and investment decision-making

Learning Outcomes

By the end of the International Gas Markets and Trading course, participants will be able to:

• Understand the dynamics of international gas markets, shale gas development, and their impact on LNG trade.
• Identify project risks and apply strategies to manage uncertainty and improve commercial outcomes.
• Apply key financial concepts, including the time value of money, cash flow analysis, capital budgeting, IRR, and NPV.
• Evaluate investment opportunities to support informed project and business decisions.
• Strengthen decision-making processes through commercial and opportunity analysis.
• Develop practical skills in building economic evaluation models and solving real-world gas market case studies.

Who Should Attend

This programme is ideal for:

• Planning managers
• Oil and gas engineers
• Project managers
• Market and financial analysts
• Commercial managers
• Economists
• Government and regulatory officials
• Geologists
• Business advisors and consultants
• Asset managers
• Exploration and Production (E&P) managers
• Product and portfolio managers