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Developments in LNG trading

todayMay 1, 2019

Background

Director for the EMEA region at Hartree Partners at Hartree Partnets, Cyrus Dadachanji, shares their main priorities – plus his thoughts on how developments in LNG will impact the markets overall.

A conversation with Cyrus Dadachanji

Could you tell us what are your priorities at the moment, as the director for the EMEA region at Hartree Partners?

We are particularly busy working in three areas:

  1. New participants: Working with new asset-based trading market participants on strategy, operating model and functional development, as they develop their asset-backed trading programs; 
  2. Integration and optimisation: Assisting companies with trading arms which support refinery assets as they seek to better integrate their various supply and trading functions and commercially optimise the entire system. This invariably requires change to the supply & trading operating model, performance measurement, transfer pricing, technology and data integration for visualisation and optimisation, and often to the organisational structure itself.
  3. And lastly, everyone is digitising. Whilst we do not code or implement, the reality is that most digitisation initiatives fail not because of the technology or implementation, but because of a lack of business preparedness. We are busy working with clients to de-risk digitisation programs through better preparation from the business side.

You’ve spent many years in risk management roles. How would you say the approach to risk management has evolved over the last years? What are the main changes we’ve seen during your time in that field?

Changes have included a move from Risk being largely absent, to being a compliance check-in-the-box, then to being seen as actually useful, and then further to a recognition that it can and should play a strategically important role in a supply & trading organisation. 

And now technology is changing the way Risk operates and what it is able to do for an organisation.

Next May at ComRisk, you’ll be presenting on LNG and its latest developments, including around pricing. What sort of impact do you think these will have on the markets overall?

Broadly and briefly, the LNG market is going the way of the crude oil markets of 20 years ago, becoming a globally traded commodity. Long-term, point-to-point transactions will give way to greater spot trading, and pricing will increasingly be against spot markers such as JKM rather than oil-indexed.

These changes will be as great, and as difficult for some, as the changes in the oil markets a generation ago. The impacts will be wide and varied.

“Cyrus has 30 years’ oil & gas experience from a variety of roles in industry and management consulting. Within industry, Cyrus spent 15 at BP where he held leadership roles including crude oil trading book leader, refinery supply manager and Director of Trading Services. At ENI Cyrus was global head of market risk and product control. As a management consultant Cyrus has led commodity advisory practices at EY and Infosys, and is currently EMEA Director leading the consulting practice at Hartree Partners in London. Cyrus works with clients on a broad range of topics including strategy and operating model, supply and trading, and technology enablement.”

Written by: Commodities People


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