Screen-print style poster of cargo documents being stamped cancelled over a harbour scene

CASE STUDIES / PORTFOLIO · NOV 2​025

Which price changes lead to more cargo cancellations?

The study varies market prices, charter costs and spot outlets in a Mediterranean utility’s LNG portfolio.

4 to 23

CANCELLED CARGOES · REFERENCE VS PSV PRICE DOWN 25%

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Define the cancellation rights.

01 · PORTFOLIO

The model covers January 2​027 to December 2​029. Firm supply and Italian demand can be cancelled for a fee. Other deliveries remain firm.

BASE PROFIT $144.2M · $1.38/MMBTU · 4 CANCELLATIONS · SEQUEL TO THE REGAS-SLOT OPTION STUDY

THE BOOK · JAN 2​027 TO DEC 2​029 · CARGO SIZE 3.4 TO 3.8M MMBTU

FOB purchases · Sabine Pass120% HH + $2 · 5/YR
DES purchases · Livorno / NWE120% HH + $4 / $3.80
DES sales · LivornoPSV - $0.25 · 6/YR
DES sales · NWE / BizkaiaTTF - $0.10 / - $0.05
SpotFREEPORT · DAHEJ · SHENZHEN

Change the pricing indices.

02 · PRICE SCENARIOS

The study varies each index from 75% to 125% of its reference level. A 25% HH increase produces 15 cancellations. A 25% PSV decline produces 23, and a 25% TTF decline produces 16.

05101520-25%-15%BASE+15%+25%INDEX LEVEL VS BASE · CANCELLED CARGOES OF THE OPTIMAL PLAN23 · PSV -25%TTF 1615 · HH +25%BASE: 4HENRY HUBTTFPSV
Cancelled cargoes after recalculating each plan. Values at ±20% and ±25% are read from the source chart.

Compare profit and delivered volume.

03 · PROFIT AND VOLUME

A higher margin per MMBtu does not necessarily mean higher total profit. In the PSV-down scenario, profit falls to $93.1M from $144.2M even though the unit margin remains positive.

$1.00$2.00$3.00-15%-10%-5%BASE+5%+10%+15%INDEX SHIFT · PORTFOLIO P&L $/MMBTU · BASE $1.38TTF +15%: $3.48HH -15%: $2.44HH +15%: $0.75PSV -10%: $1.53 BUT $93.1M ABSOLUTEHENRY HUBTTFPSV
A 10% fall in PSV raises profit per delivered MMBtu to $1.53, while total profit falls to $93.1M.

Change purchase and selling prices together.

04 · COMBINED PRICE CHANGES

Each cell changes HH and a selling-price index at the same time. The number shows cancelled cargoes after the portfolio is recalculated. This tests combined price moves, rather than adding two separate effects.

HH X TTF · PSV AT BASE-20%BASE+20%HH+20%BASE-20%TTFHH X PSV · TTF AT BASE-20%BASE+20%HH+20%BASE-20%PSVDARK = FEW · BRIGHT = MANYWORST CORNER: HH UP, PSV DOWN · UP TO 23081523 CANCELLATIONS
Cancelled cargoes when two prices change together. Colours show the pattern; labelled values come from the study.

Test freight and a new outlet.

05 · FREIGHT AND DESTINATIONS

Using a seasonal charter curve changes profit by about 1% and leaves cancellations at four. Adding the tested Incheon outlet changes routes, but not the cancellation count.

$0M$50M$100M$119.9M4 CANCELLATIONS2024 FLAT AVERAGE · $53K/DAY$118.7M4 CANCELLATIONS2024 SEASONAL CURVEDELTA -$1.2M · ABOUT 1% · ONLY THE CANCELLATION MIX SHIFTS
Using historical seasonal charter rates still gives four cancellations and $1.24/MMBtu profit.
051015$1.38-$1$1.38-$0.50$1.38$0$1.30+$0.50$1.44+$1$1.65+$1.50INCHEON JKM ADDER · DELIVERIES PER SPOT MARKET · $/MMBTU ABOVE EACH STACKDAHEJ · BRENTSHENZHEN · JKMINCHEON · JKM + ADDER
Incheon becomes favourable near a $1 price increase. The Brent-linked Dahej option changes less in this test.

06 · RESULT

Cancelled cargoes rise from 4 to 23 in the tested PSV -25% scenario.

The counts describe the specified portfolio and scenarios. The tests do not establish that freight or outlet changes are unimportant in every portfolio.

What this comparison shows.

07 · TAKEAWAYS

✓

Change the pricing indices

The study varies each index from 75% to 125% of its reference level. A 25% HH increase produces 15 cancellations. A 25% PSV decline produces 23, and a 25% TTF decline produces 16.

✓

Test freight and a new outlet

Using a seasonal charter curve changes profit by about 1% and leaves cancellations at four. Adding the tested Incheon outlet changes routes, but not the cancellation count.

!

Scope of the result

The counts describe the specified portfolio and scenarios. The tests do not establish that freight or outlet changes are unimportant in every portfolio.

How the study was calculated.

08 · CALCULATION

1

Set up the comparison

The model covers January 2​027 to December 2​029. Firm supply and Italian demand can be cancelled for a fee. Other deliveries remain firm.

2

Calculate the alternatives

A higher margin per MMBtu does not necessarily mean higher total profit. In the PSV-down scenario, profit falls to $93.1M from $144.2M even though the unit margin remains positive.

3

Review the result

Cancelled cargoes rise from 4 to 23 in the tested PSV -25% scenario.

Modelled results depend on the contracts, prices and operating assumptions used.