Design of LNG Short-Term Tender

A natural gas Transmission System Operator (TSO) wanted to secure a flow commitment from LNG imports in the context of possible gas supply shortages. FTI Consulting’s understanding and analysis of the LNG market helped the TSO to get the most commercially efficient short-term LNG purchase tender.

Situation

The natural gas Transmission System Operator (TSO) in charge of a European national gas transmission grid wanted to secure a flow commitment from LNG imports in the context of possible gas supply shortages.

Our Role

FTI Consulting analyzed in details the spot LNG market practices (prices, credit conditions, timing, technical requirements) to design the most commercially efficient LNG tender for the TSO. This included analyzing the balance between the features that the TSO would have ideally included in the tender requirements and their likely LNG price impact.

Our Impact

The LNG tender designed with FTI Consulting was formalized and submitted to the regulator’s review and to public consultation. The regulator decided to confirm the proposed design of the flow commitment underpinning the LNG tender, which is now part of the toolbox available to the TSO for balancing its network.