Course 17 of 20 · LNG Desk Academy

Optionality & Structured Supply Offers

Stage E, Structuring, resilience and integrated practice. Level 9 of 10.

Pricing and selling optionality: destination flexibility, volume tolerance and cancellation rights assembled into a structured supply offer.

117 chapters · 11 modules · every chapter one 8 to 10 minute explainer · builds on: Course 11, Course 15, Course 16

Enrol or enquire See the 117 chapters
How a chapter is sized

One chapter is one idea taken to the point of use

Each chapter is a single self-contained explainer of 8 to 10 narrated minutes, covering one idea to the point where you can use it.

Chapters run in order. Each one assumes only what the chapters before it taught, and capability belonging to a later course is named and deferred rather than half-covered.

Curriculum

11 modules · 117 chapters

Open any module for its full chapter list, in teaching order.

M0 The Optionality Already Inside the Portfolio Ch 1-10
  1. Choice as an Asset on an LNG Book
  2. An Inventory of Rights Before Anything Is Sold
  3. Reading a Contract for Who Was Granted the Choice
  4. Why the Option in LNG Is a Place, Not a Price
  5. The Four Questions That Define Any Physical Right
  6. Where Value Sits When Nobody Has Exercised Yet
  7. Flexibility the Desk Gave Away for Nothing
  8. What a Structured Supply Offer Actually Is
  9. The Mathematics This Material Deliberately Avoids
  10. What Is Assumed and What Is Handed On
M1 Destination Flexibility and What It Is Worth Ch 11-21
  1. Where Destination Freedom Comes From
  2. Destination Clauses: Free, Restricted and Consent-Based
  3. The Basin Spread as the Payoff on a Destination Right
  4. Freight as the Exercise Cost, Not an Afterthought
  5. One-Way and Two-Way Flexibility
  6. How Long the Choice Stays Open
  7. Diversion Consent and the Price of Permission
  8. Portfolio Flexibility Against Single-Cargo Flexibility
  9. What Destroys the Worth of a Destination Right
  10. Flexibility in a Market That Has Already Priced It
  11. Two Cargoes, One Clause, Different Value
M2 Volume Tolerance and the Buyer's Quantity Option Ch 22-31
  1. The Tolerance Band Seen as a Written Option
  2. The Downward Quantity Option in Detail
  3. Upward Flexibility and Why It Costs Less to Grant
  4. Notice Dates Are the Real Terms of a Tolerance Band
  5. Where the Flexed Volume Actually Goes
  6. Carrying Cost of an Unexercised Band
  7. Pricing a Band Without a Volatility Assumption
  8. Asymmetric Bands and the Cheaper Grant
  9. Make-Up, Carry-Forward and the Deferred Obligation
  10. A Tolerance Package Weighed From Both Sides
M3 Cancellation and the Right Not to Lift Ch 32-41
  1. The Right to Walk Away From a Cargo
  2. The Cancellation Fee as a Strike Price
  3. Setting a Fee That Protects the Seller
  4. Notice Windows and the Cost of Late Information
  5. Partial Cancellation and the Reduced Cargo
  6. Cancellation Rights Held by the Seller
  7. When Cancellation Is Cheaper Than Performance
  8. Many Buyers Cancelling at Once
  9. Drafting a Cancellation Clause You Can Live With
  10. A Cancellation Priced Through to Settlement
M4 Slots as Options: Liquefaction and Terminal Ch 42-52
  1. A Capacity Slot Is a Right, Not a Volume
  2. The Tolling Slot as an Option on the Conversion Spread
  3. Why a Capacity Payment Behaves Like a Premium
  4. The Regas Slot as an Option to Unload
  5. A Destination Right Without a Berth Is Not a Right
  6. Secondary Release and the Market Price of a Slot
  7. Slot Options Are Not Financial Options
  8. Linking a Loading Slot to a Discharge Slot
  9. Shipping as the Link Between Two Windows
  10. Idle Slots and the Decision to Release
  11. A Slot Portfolio Read as a Set of Rights
M5 Valuing Physical Optionality Defensibly Ch 53-64
  1. Intrinsic Value of a Physical Right
  2. Why Intrinsic Value Understates What You Hold
  3. Rolling Intrinsic: Revaluing as the Market Moves
  4. Rolling Intrinsic Applied to a Destination Right
  5. The Honest Gap Between Method and Model
  6. Where a Model Is Genuinely Needed
  7. What a Model Demands Before It Can Answer
  8. The Co-Movement Assumption Nobody Can Observe
  9. Defensibility as a Valuation Criterion
  10. Challenging a Number Somebody Else Produced
  11. Valuing the Same Right Two Ways, Part One
  12. Valuing the Same Right Two Ways, Part Two
M6 Pricing Flexibility a Buyer Has Asked For Ch 65-75
  1. The Buyer's Request Is Always a Price Question
  2. Three Ways to Charge for Flexibility
  3. Burying the Charge in the Index Differential
  4. The Premium Question: Paid When and By Whom
  5. Zero-Cost Flexibility and What It Really Buys
  6. Trading a Right Against the Headline Number
  7. Reciprocal Flexibility: Rights Traded Both Ways
  8. Pricing Flexibility for a Buyer You Do Not Trust
  9. Comparing Two Offers With Different Flexibility
  10. When to Refuse to Price a Request
  11. What the Market Will Actually Pay for Latitude
M7 Assembling the Structured Supply Offer Ch 76-87
  1. From Priced Components to One Offer
  2. Reading a Tender for the Flexibility It Demands
  3. Deciding Which Rights to Grant at All
  4. Tiering an Offer: Narrow, Standard and Wide
  5. Capping Your Own Exposure Inside the Offer
  6. Writing the Exercise Mechanics So They Work
  7. The Pricing Formula That Carries the Flexibility Charge
  8. Matching the Offer to What the Buyer Is Really Solving
  9. Term, Tenor and the Flexibility That Outlives the View
  10. The Offer Document and the Internal File Behind It
  11. Pre-Hedging an Offer That May Not Be Accepted
  12. Handing a Signed Structured Deal to Operations
M8 Selling Flexibility You Do Not Hold Ch 88-97
  1. Short Optionality on a Physical Book
  2. Why Desks Sell Flexibility They Cannot Cover
  3. The Replacement Obligation When a Right Is Used
  4. Exercise Arrives Exactly When It Hurts
  5. Several Buyers, One Trigger
  6. Counting the Promises Against the Assets
  7. Covering a Short Flexibility Position
  8. Buying a Granted Right Back
  9. The Stack of Promises That Broke a Seller
  10. Flexibility Sold Short, Priced Honestly
M9 Governing the Writing of Flexibility Ch 98-107
  1. Writing Flexibility Is a Permissioned Activity
  2. The Register of Rights Granted and Held
  3. Limits That Actually Bite on Physical Optionality
  4. Approval Routes for a Non-Standard Grant
  5. Independent Valuation of Granted Rights
  6. Reporting Optionality to People Who Do Not Trade
  7. Incentives That Produce Badly Priced Flexibility
  8. Auditing a Contract Book for Hidden Rights
  9. The Grants a Portfolio Should Simply Refuse
  10. Reviewing Grants After the Fact
M10 A Structured Offer, Priced and Tested Ch 108-117
  1. The Brief: One Buyer, One Flexibility Request
  2. Costing the Destination Component
  3. Costing the Quantity Band
  4. Costing the Cancellation Right
  5. Assembling the Three Charges Into One Price
  6. The Offer Negotiated Down
  7. The Case Deal With Every Right Exercised
  8. The Case Deal With Nothing Exercised
  9. What These Pricing Methods Cannot Do
  10. Where Granted Rights Go Next

The brochure gives each of these 117 chapters a paragraph on what it covers and what you can do once you have worked through it.

This is course 17 of twenty

It stands alone, and it is also the entry point to the LNG Desk Academy pathway.

Enrol or enquire See the whole pathway