Natural gas consumers

Manufacturing companies are often large natural gas consumers. Natural gas costs can make up a large part of the total company costs. Ultimately, companies want a low gas price, but the perfect timing of purchases is virtually impossible. Still, there is a lot that large natural gas consumers can do in terms of cost reduction and risk management. To begin with, they need to have a clear insight in current market prices. Secondly, they need to assess their exposure to prices and design a purchasing strategy to minimize the impact on the company’s earnings. KYOS analytics provide all the necessary support to achieve this.

With the KYOS Portfolio and Risk Management system our clients compare different contract structures, purchasing strategies and hedge (trading) decisions. KYOS provides insight in the implications of the different options: what is the average cost and what is the potential downside?

• Is it better to have spot indexed, forward indexed or fixed price contracts?
• Is it worth fixating the price at a certain moment, or have a cap in the contract?
• How can risks be minimized by market trades?

In addition, our clients use the KYOS portfolio management system (“CTRM” or “ETRM”) for the daily financial management. The system shows the expected volumes, prices and cash-flows across the portfolio at any point in time and for any selection. It furthermore provides financial information in the form of Mark-to-Market, invoice control, and Cashflow-at-Risk.

Solutions

• Monte Carlo price simulations
• Power: Energy options

Gas companies

• Natural gas traders
• Natural gas suppliers and utilities
• Natural gas storage operators
• Natural gas consumers

Publications

• A practical example of hedging gas swing contracts
• KYOS chapter in best-selling energy risk book by V. Kaminski: gas storage pricing and hedging
• Flame 2019 Presentation
• Presentation at Platts European Gas & LNG Summit