capSpire Blog

The shoulder seasons bring significant uncertainty to natural-gas markets. During this time, unexpected weather events in particular can wreak havoc on spot natural-gas prices.

Imagine the scenario in which bid week took place just over two weeks ago, during which baseload purchases and sales for October were negotiated, as well as firm transport on pipeline networks. In the middle of the cash month, an unexpected cold front hits Chicago. Tomorrow’s spot price for Chicago Citygate increases by eight dollars per MMBtu over Henry Hub. You’re left scratching your head as to how best handle the subsequent price movements associated with the dramatic shift in temperature.

In this scenario, how can you monetize this fluctuation while still meeting your baseload transport contracts—and factoring in your firm transport constraints?

With capSpire, you’d have the decision support to be able to identify a solution that gives you the best bottom-line revenue while still meeting contractual obligations.

How so?

We’re excited to unveil our newest product: the Natural Gas Network Optimization platform. In keeping with our other optimization platforms, the Natural Gas Network Optimization platform helps companies improve operational decision making and maximize margins. However, this product is tailored to the unique challenges of physical trading, scheduling, transport, storage, and seasonal planning in the natural-gas market, and benefits upstream, midstream, and downstream players alike.

It offers an answer to the common dilemmas faced by natural-gas companies: You have a lot of optionality available for buying, selling, storing, and moving natural gas. Networks can have considerable logistical complexity. You are faced with constantly fluctuating market conditions. All sorts of cost considerations impact your business decisions. You may have an abundance of raw data, but no actionable information to help you figure out what to do. There are more options to thoroughly consider than any one individual can do manually in a reasonable time period. Sometimes, the right solution can seem counterintuitive at first and be dismissed by personnel. And spreadsheets are wholly inadequate for examining larger volumes of data.

The Network Optimization platform can be integrated into any commodity trading and risk management (CTRM) system, such as Allegro and RightAngle, and can be customized to connect with in-house systems. The platform then takes your existing data from these systems, streamlines it in one central location, converts your network into an optimization model, and evaluates the seemingly unlimited scenarios—essentially doing all the analysis for you. Lastly, the platform delivers results in an easy-to-understand format that enables you to identify the solution that will have the best impact on revenue. In this way, the platform acts as an extension of your systems to augment data and enhance the user experience.

“Our network optimization platform helps natural-gas players across all levels of the market to monetize their physical trading operations by enabling them to forecast, plan, and quickly react to constantly changing, real-world constraints,” says Talis Bennett-Verschure, capSpire Subject Matter Expert.

The Network Optimization platform delivers key benefits:

Marketing and Supply Planning

• Make informed buy and sell decisions
• Understand and identify location spreads
• Identify time spreads and contango opportunities
• Easily identify and most profitable supply and demand options

Inventory Optimization

• Intelligently manage inventory based on supply and demand
• Trade around your physical inventory
• Easily understand inventory rundown
• Evaluate new storage location options, and quickly rank new storage capacity by margin uplift

Transport and Scheduling Optimization

• Evaluate all pipeline paths
• Create suggested schedules that optimize nomination, transport, and capacity decisions
• Visually analyze how firm and interruptible transport changes, as well as planned and unplanned outages, impact a pipeline

Simulation and What-If Analysis

• Simulate supply, demand, and pricing changes to anticipate market movements
• Analyze the historical impacts of new assets or contractual changes
• Deliver what-if analysis for new contracts, park and loans, and storage
• Evaluate the economic impact of various scenarios using easy-to-understand dashboards

For more information, please view the marketing sheet for the Network Optimization platform. To ask questions directly to a product expert or get started implementing this platform for your business, you can email Ben Ridgway at ben.ridgway@capspire.com.