This course is designed to provide participants with a strong overview of Gas Trading, particularly market participants, gas products, pricing, trading, storage, cross-border trading, cross-border connections, cross-border transport capacity and capacity auctioning.

1. Cross Border Gas Trading
26-27 November, 2012, Amsterdam
Course Leader
Jeroen Koster, Mercurious

2. Cross Border Gas Trading
OURS
This course is designed to provide
participants, gas products, pricing,
trading, storage, cross-border
trading, cross-border connections,
Who should attend?
participants with a strong overview Thiscommodity community including these key roles:
of Gas Trading, particularly market
and
course is particularly suited to the compliant energy
▶ Gas traders, energy traders and commodity traders
▶ Gas executives
▶ Gas asset and portfolio managers
▶ Risk managers
▶ Back office staff
cross-border transport capacity and ▶ ICT experts and project managers
capacity auctioning. ▶ Legal staff and compliance officers
▶ Employees within the Finance and Control departments
Introduction
The training is based on a strong interactive approach Learning objectives
in which the contribution of participants is of utmost ▶ The workings of local, regional and international gas
importance. The workings of gas markets, relevant markets
developments therein, risks and other relevant issues are ▶ Transportation of gas: Shipping, pipelines and hubs
shown during the training sessions by means of questions,
▶ TSOs and Balancing regimes
theory and theses.
▶ Products traded in the gas markets
This course covers two full days. In dealing with ▶ The workings and applications of those products
each subject, we focus our attention on the various ▶ Cross-border gas trading and business reasons
characteristics, aspects, opportunities and risks attached underpinning it
to that particular subject. ▶ Customary cross-border gas trading techniques and
methods
This course is designed to be extremely practical and
hands-on. Participants will play trading simulations and will ▶ Cross-border gas trading
have to solve various exercises. The course has a steep ▶ Currency risk and FX trading
learning curve and a marked increase of both knowledge ▶ Proxy hedging (dirty hedge)
and skills in the area of Cross Border Gas Trading will be ▶ Correlation coefficients and correlation trading
the end result.
▶ Arbitrage and statistical arbitrage

3. AGENDA
AGENDA
AGENDA
Program
DAY 1
Session 1: ▪ Base load vs. peak load
Gas markets ▶ Contract specifications & structuring
▶ Working of the gas markets ▷ Physical delivery vs. Financially settled products
▷ Hubs ▶ Forward curves
▪ Physical vs. Virtual hubs ▷ Backwardation
▪ Henry Hub, NBP, TTF, Zeebrugge, Baumgarten ▷ Contango
▶ Market participants ▷ Convenience yield
▶ Features of gas ▶ OTC markets vs. Exchange trade
▷ Quality ▷ The role of brokers
▪ High calorific ▶ ICE, APX-Endex, EEX
▪ Low calorific ▷ Clearing
▪ Wobbe-index ▪ Margining & Collateralization
▪ Quality conversion (capacity) ▶ Spread trading
▶ Transport
▷ Pipelines vs. LNG
▷ Regassification vs. liquefaction capacity
Session 3 + 4:
▷ The effect of LNG on gas pricing Auctioning gas transport capacity
▷ Transmission System Operators (TSOs) ▶ Preferred auction of cross-border transport capacity
▪ National Grid, Fluxys, Gas Transport Services ▷ ENTSOG
▪ Balancing regimes ▷ Programme responsible parties (PRPs)
▶ Pricing ▷ Interconnection points (IPs)
▷ Fundamental price drivers ▷ Strategies
▷ Non-fundamental price drivers ▪ Each PRP has to decide how to purchase the
▷ Gaspec requested units of capacity.
▷ o Price formulas ▪ Optimization of bids, taken into account the capacity
▷ o Correlation with oil price of the IPs, the different prices and the restraint of the
▷ o Benchmarks & indices Session 2: budget.
▪ Forecast behaviour of competitors and what the
consequences will be.
Session 2:
Gas trading Simulation:
▶ Physical markets vs. Financial markets Auction of (cross-border) gas transport capacity
▶ Spot products (Intraday, Day ahead, BOW, BOM, Participants will be allocated a budget and will be
BOY, WKND, WDNW) assigned a target. Based on these two ingredients they
▶ Forward products (Months, Quarters, Seasons, Cal have to participate in an auction and fulfill their tasks in
products) the best way
▷ Consumption curve; seasonality
▪ Daily pattern (day-night)
▪ Weekly patterns (working days vs. weekend)
▪ Yearly patterns (winter-summer)
▷ Definitions
▪ Peak vs. off-peak

4. Program
DAY 2
OURS
Session 5:
Cross-border gas trading
▶ The reasons for it explained
▷ Sourcing
▷ Hedging
▷ Arbitrage
▷ Speculation
▶ Solutions to avoid delivery at the wrong place
▷ Gas swap
▷ Physical
▷ Financial
▷ Liquidating position
▷ Spot markets
▶ Currency risk
▷ FX trading
Session 7:
Hedging
▶ Proxy hedging
▷ Dirty hedge
▷ The impact of a proxy hedge
▷ How to effectuate proxy hedging in practice?
▷ Disadvantages of correlation trading
▪ Normality
▪ Linearity
Session 8:
The real option approach
▶
▶
The real option approach explained
Asset optimization
L
▷ Treasury mgt. department vs. Trading department ▶ Optimization of allocation of assets
▶ Dynamic hedging
Exercise:
Cross-border gas trading ▶ Delta hedging
Simulation:
Session 6: Cross-border gas trading
Risk management
▶ NBP-TTF
▶ Value at Risk
▷ VaR ▶ Physical & virtual trading
▪ Time horizon ▶ Optimization of cross-border transport capacity
▪ Confidence level
▶ VaR of a combined gas portfolio Participants will be allocated physical transport
▷ Various commodities capacity and have to optimize the value by hedging
▪ NBP gas & TTF gas dynamically.
▪ How to implement correlation coefficients?
▶ Dirty hedge
▪ Cross-margining
▪ Interpretation of exposures
Exercise:
Calculate the VaR of a cross-border gas position

5. LEADER
COURSE LEADER
Jeroen Koster
Trainer-Consultant Mercurious
Jeroen Koster is the co-author of Jeroen has also worked as a Corporate Trainer at the
the book entitled “Refacing Risk, international derivatives trading firm All Options, in which position
building a fortune”. he was responsible for training staff for the roles of Derivatives
Trader, (senior) Traders and Back Office employees. The training
After finishing high school, Jeroen centered onto several subjects including corporate actions, risk
Koster studied Applied Mathematicsat management, compliance, volatility and trading strategies.
the Technical University (TU) of
Twente. In 1996 he became a With over two decades worth of experience in the energy sector,
professional Options Trader (Market Jeroen Koster is highly skilled and formally schooled in the
Maker) on the trading-floor of the nuances of this exciting industry. His experience and passion for
European Option Exchange (EOE) in Amsterdam. passing on knowledge really make him an excellent tutor.
For a number of years thereafter Jeroen traded in various option
classes, both single stocks and indices and FX. Subsequently he
became responsible for the education of new hires and trainees
at the European Option Exchange. Following the new millennium
and the technical improvements and challenges it brought
along, including the migration from open-outcry to screen-based
trading on electronic platforms, Jeroen became the Head of
Trading at the trading firm and specialist Van der Moolen.

6. LANGUAGE
The workshop will be delivered in English.
DATE
26-27 November 2012, Amsterdam, The Netherlands
SCHEDULE
Each day starts at 09.00 and finishes at 17.00hrs.
REGISTRATION
http://www.energy-expert-network.com/courses
E-mail: Johanna.oberg@energy-expert-network.com
Phone:+46 (0) 85 333 2599
FEES
ABOUT THE ORGANIZERS
Early Bird 1990€ (register before 12 October)
+ Dutch VAT
Standard price 2490€ + Dutch VAT
MULTIPLE REGISTRATION DISCOUNT
ENERGY EXPERT NETWORK Register two or more people from the same company
and get a 10% discount per person.
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