Monthly Archives: October 2014

Liquefied #Gas sourcing opportunities created by the fall in €/£ as well as the fall in price

The price of pipeline,  russian gas due to time lag averaging will absorb the tremendous fall in oil price much later than Spot LNG leaving room for spot opportunities. Moreover,  the Ukraine russian deal as Reuters reports (look in the link below) accelerates the fall in spot gas price
Forex drop in €/£ :

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NBP gas winter contact

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UPDATE 1-UK gas prices fall on Ukraine-Russia deal
http://uk.mobile.reuters.com/article/idUKL5N0SQ1GG20141031?irpc=932

Russia-Ukraine Gas Deal – Another Last-Minute Special
http://csis.org/publication/russia-ukraine-gas-deal-another-last-minute-special

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Brent #oil structure still in #contango while #forward still discounts the 86$/bbl minimum aligned with the E&P break even price of shale and sand oil

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Apart of the historical brent used to have a backward structure this change signals hedging opportunities

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Interesting facts from #Greek regulated revenue in electricity transmission network #risk free rate and #WACC

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In the matrix above the regulator determines the Greek risk free rate for year 2015 up to 1,4% but as can be seen below the relevant risk free rate for Greece is trending for the late 5years in the levels of 7,5%, while for US 2,3% and for Germany’s 1%, a spread of up to 5% before the calculation of risk free premium on the stock market.

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Worths to read below the wording that tries to explain why the German risk free rate was taken instead of the Greek:

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Its very interesting that they notice a strong downward trend in Greek bond market!!

If we go back to year 2012, the Greek regulator for the relevant gas transmission network and its tarrifs determines the risk free rate for the gas operator up to 0,63%

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Ultimately the electricity WACC before tax at 2015 prices is estimated 11,1% while the same for 2012 10,99% for the case of gas. Let’s now see the inflationary difference among 2012 and 2014 in the graph below:

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Its actually deflation since after a year the rate goes close to zero ams than passes to negatives. But the rates kept actually the same!

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New entry #Coal plant cost vs #Gas ccgt for co2 price up to 6 and 15 €/tco2. Coal has a constant competitive advantage in current price levels

This relation holds when the investment cost of coal is double the CCGT. First graph shows a break even around 3500hpa BUT for co2 price double the current,  while the second is with current prices 6€/tco2 of assets and as can be seen coal has a constant competitive advantage for all hpa

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#Greek #market is crushing while 10Y #bonds #YTM hold up to 7,3%

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October 30, 2014 · 11:15 am

The lag averaging in pipeline #gas create opportunities for #lng which immediately absorbs the fall in #brent #oil price while increasing the NBP TTF spread

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NBP determined by LNG up to 31% as storage filled sent out to Dutch hub and further exported to germany due to arbitrage among pipe gas and lng. Spread  kept at high levels.

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Brent #oil front month #term structure basis #risk up to 4$/bbl at the end of curve

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October 29, 2014 · 11:24 am