CASE STUDIES / OPTIONALITY · FEB 2026
How flexible routing changes profit and price exposure.
The study compares fixed LNG routes with schedules recalculated as prices change.
+$16.8M
REVISED VS FIXED ROUTES · JKM +$1.50/MMBTU
Compare fixed and flexible routes.
01 · PORTFOLIO
The reference portfolio contains 76 cargoes across five supply sources and three delivery markets. Both plans use the same contracts and price scenarios.
FOB PURCHASES · FIVE SUPPLY SOURCES
- Sabine Pass · 18 cargoes · HH-linked
- Cove Point · 16 cargoes · HH-linked
- Golden Pass · 12 cargoes · HH-linked
- Arzew · 15 cargoes · oil-linked
- Qatargas · 15 cargoes · oil-linked
DES SALES + SPOT · THREE MARKETS
- Gate · 20 cargoes · TTF-linked
- Dahej · 20 cargoes · HH-linked
- Futtsu · 25 cargoes · JKM-linked
- Spot access: DES purchases at Gate (TTF), DES sales at Tianjin (JKM)
76 FIRM CARGOES · 5 SUPPLY SOURCES · 3 DELIVERY MARKETS · X-LNG ENGINE
Recalculate as JKM rises.
02 · PROFIT CHANGE
The optimised plan redirects eligible cargoes to Asia when the additional revenue exceeds the extra costs. The routing uplift is zero at +$0.50 JKM, 1.8% at +$1.00 and 4.2% at +$1.50.
Use a separate 11-cargo example to explain the switch.
03 · ROUTING EXAMPLE
This simplified example isolates the routing decision. Eleven cargoes change destination when the Asian premium covers the extra costs. Its results are separate from the 76-cargo portfolio above.
Measure the change in exposure.
04 · PRICE EXPOSURE
Each route change can alter the portfolio’s sensitivity to JKM. In the simplified example, sensitivity rises sharply when 11 cargoes switch to Asia.
Compare simulated outcomes.
05 · MONTE CARLO
At the study’s 120% volatility setting, recalculated routes add $41M to average profit. The reported downside measure improves by $46M relative to the fixed plan.
+$41M
AVERAGE PROFIT · 120% VOLATILITY · $266M TO $307M
+$46M
5% VALUE-AT-RISK · 120% VOLATILITY · $118M TO $164M
+$19M
AVERAGE PROFIT · 80% VOLATILITY · $270M TO $288M
+$25M
5% VALUE-AT-RISK · 80% VOLATILITY · $173M TO $198M
Routes are recalculated for each price path. The study estimates flexibility value at $3.6M.
06 · RESULT
+$16.8M from revised routing at JKM +$1.50/MMBtu, a 4.2% improvement in the tested portfolio.
The study includes a diversified portfolio and a separate simplified example. Their results should not be combined. Gains depend on the available routing rights and simulation assumptions.
What this comparison shows.
07 · TAKEAWAYS
Recalculate as JKM rises
The optimised plan redirects eligible cargoes to Asia when the additional revenue exceeds the extra costs. The routing uplift is zero at +$0.50 JKM, 1.8% at +$1.00 and 4.2% at +$1.50.
Compare simulated outcomes
At the study’s 120% volatility setting, recalculated routes add $41M to average profit. The reported downside measure improves by $46M relative to the fixed plan.
Scope of the result
The study includes a diversified portfolio and a separate simplified example. Their results should not be combined. Gains depend on the available routing rights and simulation assumptions.
How the study was calculated.
08 · CALCULATION
Set up the comparison
The reference portfolio contains 76 cargoes across five supply sources and three delivery markets. Both plans use the same contracts and price scenarios.
Calculate the alternatives
This simplified example isolates the routing decision. Eleven cargoes change destination when the Asian premium covers the extra costs. Its results are separate from the 76-cargo portfolio above.
Review the result
+$16.8M from revised routing at JKM +$1.50/MMBtu, a 4.2% improvement in the tested portfolio.
Modelled results depend on the contracts, prices and operating assumptions used.