Long-Term Contracts: A Model for Assessing Their Importance in Financing Natural Gas Projects (Classic Reprint) - Softcover

John E. Parsons

Softcover

ISBN 10: 133226834X ISBN 13: 9781332268344

Publisher: Forgotten Books, 2018

Synopsis

This book explores the significance of long-term contracts in financing natural gas projects, offering a groundbreaking model to assess their 'strategic value'. The author argues that long-term contracts have traditionally been seen as essential for securing project value, but that increased flexibility in contracting and financing is challenging this assumption. The model presented in this book calculates the different probability distributions over price that sellers can anticipate for long-term contracts and for short-term sales. This enables analysts to assess the likelihood that negotiated prices would fall below the capital charge, and therefore the extent to which long-term contracts contribute to securing project NPV. The author illustrates the model's use with two case studies: an Australian and an Indonesian LNG export project. The results demonstrate that long-term contracts are essential to the value of the Australian project but not to the Indonesian project, highlighting the project-specific nature of this assessment. This book provides a valuable tool for project analysts in the natural gas industry, enabling them to assess the importance of long-term contracts on a project-by-project basis and to identify exceptions to the traditional view of their importance.

Edition details

• Publisher: Forgotten Books
• Publication date: 2018
• Language: English
• ISBN 10: 133226834X
• ISBN 13: 9781332268344
• Binding: Paperback
• Number of pages: 30