17. Unitisation of gas within a Capital Partnership enables direct P2P investment 02/12/09
18. Capital Partnership – direct Peer to Peer investment in productive assets 02/12/09
19. 2002 - Hilton Capital Partnership ( > £1bn) Capital Partnership LLP 10 UK Hotels Gross Revenues Hilton Group Capital User Consortium LLP Capital Provider Bank Property Developer Hotel Specialist % % % % %
21. … Investors put in Financial Capital in money, or money’s worth … Assets Investors Ownership Financial Capital Custodian
22. … Managers provide Human Capital of time, expertise and experience.... Assets Investors Ownership Human Capital Financial Capital Managers Custodian
23. ..Users pay for the use of Capital Assets Investors Payment % % Use Managers Users Custodian
43. Consumers - lock in the price of future consumption 02/12/09
44. Units are a simple but radical new hybrid 02/12/09
45. Units lock in price like a futures contract… 02/12/09
46. … but there is no right to delivery; no expiry date, and no gearing 02/12/09
47. Units are similar to an Exchange Traded Fund within a partnership framework…. 02/12/09
48. … .with the added attraction that they are redeemable in payment for energy 02/12/09
49. Issue – Liquidity : Investor sellers of Units may not find Investor buyers 02/12/09
50. No Problem! Consumers will buy if the Unit price falls below physical gas market price 02/12/09
51. ...because they would profit by buying Units and redeeming them against consumption 02/12/09
52. Issue – Security : will a Unit be honoured when presented in payment? 02/12/09
53. No Problem! Sellers and Buyers are members of a Gas Clearing Union 02/12/09
54. Conventionally, sellers may give buyers interest-free credit –or time to pay Buyer 02/12/09 Credit Value Seller
55. Banks act as credit intermediaries, to provide trust through implicit guarantee 02/12/09 Bank Seller Buyer
56. Or sellers enter into forward purchase bilaterally or over the counter Buyer 02/12/09 Forward Sale Seller
57. Clearing Houses act as risk intermediaries, to provide trust through implicit guarantee 02/12/09 Clearing House Seller Buyer
58. A Clearing Union guarantees credit from member sellers to member buyers… Buyer 02/12/09 Pool Guarantee Guarantee Seller
59. ...with a common bond as market participants Buyer 02/12/09 Pool Guarantee Guarantee Seller
60. Both seller and buyer pay into a Pool for the use of a mutual Guarantee Buyer 02/12/09 Pool Guarantee Guarantee Fee Fee Seller
61. Buyer settles credit in money, or money’s worth of Value acceptable to seller Buyer 02/12/09 Pool Guarantee Guarantee Fee Fee Value Seller
62. If a buyer defaults, Pool pays seller, and collects from buyer Buyer 02/12/09 Pool Collects Pays Seller
63. A service provider sets guarantee limits, handles defaults & manages the system Buyer 02/12/09 Pool Service Provider Services Fee Fee Guarantee Guarantee Fee Seller
64. The Clearing Union Buyer 02/12/09 Pool Service Provider Services Fee Fee Guarantee Guarantee Fee Value Credit Seller
77. $2 billion in conventional debt may be refinanced by Qatar
78. … ..by selling 400 million Units redeemable in payment for 1 MMbtu @ $5.00 each to Japan
79. Outcome – macro Gas Pool Gas Pool Unit Investors Japan Equity Shares Managers, Qatar gas $ or Units Redeemed $ Units Units Units
80. Gas Pools are merged within a global Master Partnership framework agreement Master Partnership Financial Capital (Money, IP etc) Clearing Union Custodians % % $ 02/12/09 Human Capital ( Developers, Operators)
