Screen-print style poster of a DES cargo choosing between European destinations

CASE STUDIES / OPTIONALITY · AUG 2​025

Comparing destination, cancellation and volume flexibility.

Three separate comparisons value flexibility in a European DES portfolio.

$2.06/MMBtu

MEAN VALUE OF REGIONAL DESTINATION RIGHTS · OWN REFERENCE CASE

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Define the DES portfolio.

01 · PORTFOLIO

The main portfolio has 30 supply cargoes and 24 cargo sales, with additional spot access. Supply windows span two months; the firm sales use eight-day windows.

Modelled profit: $82,647,127 · FORWARD CURVES OF 29 JULY 2​025

THE BOOK · SUPPLY, DEMAND AND SPOT

DES purchases · NWE, Italy, Spain30 CARGOES · 2-MONTH WINDOWS
Purchase prices130% HH + $5 · TTF - $0.90 · THE - $0.98
DES sales · 8 European ports24 CARGOES · 8-DAY WINDOWS
Selling pricesTHE / TTF / NBP / PEG / PSV, EACH - $0.60 TO - $0.75
SpotBuy: Netherlands, 96% TTF · Sell: Germany, 93% TTF
02467BRUNSBUETTEL4GATE3PANIGAGLIA3GRAIN3DRAGON3EEMSHAVEN FSRU3WILHELMSHAVEN LNG2EL MUSEL2SAGUNTO2SOUTH HOOK2LUBMIN FSRU2MONTOIR-DE-BRETAGNE2CARTAGENA2BAHIA DE BIZKAIA GAS1PIOMBINO1GATE EXPORT1BARCELONA1MUKRAN FSRU1STADE FSRU1ANTIFER1MUGARDOS1ZEEBRUGGE1ADRIATICMATCHED DES-DES DELIVERIES PER TERMINAL · CARGO COUNTS EXACT FROM THE ENGINE RUN22 TERMINALS · $82,647,127
Cargoes assigned to each supply-to-delivery route in the reference plan.

Value each right against its own reference.

02 · CONTRACT RIGHTS

Each comparison uses 1,000 simulated price paths. The model calculates the profit difference between the portfolio with the right and its corresponding reference portfolio.

$0.00$0.50$1.00$1.50$2.002.061.56REGIONAL DIVERSION0.960.42CANCELLATION RIGHTS0.310.29VOLUME RANGEMEANMEDIAN · $/MMBTU, EACH RIGHT PRICED IN ISOLATION1,000 MC PATHS PER COMPARISON · FORWARD CURVES OF 29 JULY 2​025
Mean and median value of each right, in $/MMBtu. Each right uses its own reference comparison.

Compare destination choices.

03 · DESTINATION CHOICE

Germany is usually the preferred outlet at forward prices. Access to Italy and France adds value in paths where their relative prices improve.

-0.20+0.2JANMARMAYJULSEPNOVNOV PEAK +0.25GERMANY LEADS ALMOST EVERY MONTHGERMANYITALYFRANCE · DES-SHORT SPREAD $/MMBTUAT CURRENT FORWARDS · GERMANY SERIES EXACT, ITALY AND FRANCE TRACED WITH ANCHORED ENDPOINTS
European destination choice raises mean profit from $14.9M to $22.4M compared with Germany-only delivery.
0%25%50%75%100%JANMARMAYJULSEPNOVITALYGERMANYFRANCE · SHARE OF OPTIMAL MATCHESDESTINATION CHOSEN PER MONTH ACROSS 1,000 PATHS · EXACT ENGINE SHARES
Italy contributes about 39% of January’s total price spread. The preferred destinations change by month.

Review cancellation and volume results.

04 · CANCELLATION AND VOLUME

The cancellation comparison increases mean profit from $21.95M to $25.49M. Volume flexibility adds a mean $0.31/MMBtu, with the largest seasonal benefit in winter.

0%10%20%30%29%017.5%117.5%212%38%45.6%54.8%62.8%71.2%81%910111 TO 3 CANCELLATIONS = 47% OF ALL PATHSCARGOES CANCELLED PER PATH · SHARE OF 1,000 PATHS · 71% CANCEL AT LEAST ONCE
Cancellation rights raise mean profit from $21.95M to $25.49M. In the volume test, December uses minimum volume in 80% of paths.

05 · RESULT

Mean values: $2.06/MMBtu for regional destinations, $0.96 for cancellation and $0.31 for volume flexibility.

The three rights use different reference comparisons. Their values cannot simply be added. The source also excludes some cross-market correlation effects.

What this comparison shows.

06 · TAKEAWAYS

✓

Value each right against its own reference

Each comparison uses 1,000 simulated price paths. The model calculates the profit difference between the portfolio with the right and its corresponding reference portfolio.

✓

Review cancellation and volume results

The cancellation comparison increases mean profit from $21.95M to $25.49M. Volume flexibility adds a mean $0.31/MMBtu, with the largest seasonal benefit in winter.

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Scope of the result

The three rights use different reference comparisons. Their values cannot simply be added. The source also excludes some cross-market correlation effects.

How the study was calculated.

07 · CALCULATION

1

Set up the comparison

The main portfolio has 30 supply cargoes and 24 cargo sales, with additional spot access. Supply windows span two months; the firm sales use eight-day windows.

2

Calculate the alternatives

Germany is usually the preferred outlet at forward prices. Access to Italy and France adds value in paths where their relative prices improve.

3

Review the result

Mean values: $2.06/MMBtu for regional destinations, $0.96 for cancellation and $0.31 for volume flexibility.

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