Energyforum
Coal & Freight
6-7 November 2008, Cologne
Day 1:
Morning session: Dr. George Waterhouse, George Waterhouse Consultancies
8.30-9.00: Registration
9.00: Session starts
Short introduction to the coal & freight market
" Exporting & importing countries
" Competition for bulk freighters
" Potential risks of contamination
Definitions of steam coal & pci
" Coal Analyses -proximate, ultimate, calorific value, ash analyses, ash fusion temperatures, swelling indices, hard grove index etc
Coal Specifications
" Sampling- with emphasis on the correct methods and the important role it plays in most disputes
" Storage and Handling- emphasis on avoidance of spontaneous combustion from production to use
" Mixing and Blending- The practicalities of what is possible
Coal use in Power Stations
" Discussion of the whole process of coal from stockyard to final steam production
" Brief comments on development of power station boilers, related to coal availability
" Coal specification requirements and the reason behind them in
¢ Milling
¢ Combustion
¢ Slagging and Fouling
¢ Ash collection and emissions, Trace elements
¢ Sulphur and reduction of emissions
¢ Nitrogen oxide emission and their reduction
¢ Chlorine
The coal chain, producer to end user
" To wash or not to wash
" Size
" Export storage & handling
" Shipping & Transport
" Import port storage, handling and sizing
" Customers - direct users or traders?
12.30-13.30: Lunch
Afternoon session: Andrea Bucca, Econometrician, BP Oil International
Freight Forward Contracts
" The time value of money
" Underlying indices examples: the Baltic Exchange Index
" The BIFFEX contract
" Forward prices and forward prices of commodities:
" The viewpoint of forward writer: Evaluation and static replication (cash & carry)
" The viewpoint of the forward buyer: Hedging risk exposure and realized P&L
" Example: Forward Freight Agreements
" Properties of commodity forward prices: Contango, backwardation and the effects of non-storability
15.00-15.30: Coffee & Tea
Risk Management
" Risk classes: Market risk, strategic risk, operational risk
" Hedging principles: Static and dynamic trading
" Hedging the bunker rate using IMAREX and SGX contracts
" Hedging second hand vessel price risk
" Second hand market
" Baltic sale and purchase assessments
" Sale and purchase forward
" Global risk assessment: Market value-at-risk
17.00: Closing of day one
Day 2:
Damian Honey, Partner & Rebecca Lindsey, Associate, Holman Fenwick Willan
9.00: Session starts
Coal Trade agreements
" What are the main issues in the negotiation of a SPA? This will include an analysis of the key terms to be included in any physical coal contract, and how to negotiate them to your advantage
" Review of SCoTA - is it accepted, how does it work, issues to be aware of when negotiating an SPA on SCoTA
" EFET Coal Credit Annex to the SCOTA (issues, acceptance, practice)
" Review of documentation generated by an SPA: bill of lading, inspection certificates, payment documents, certificates of origin.
" Credit issues - how to protect yourself against counterparty defaults and performance.
12.30-13.30: Lunch
Freight agreements
" Whose responsibility is it to arrange freight, and what are the obligations?
" Key terms of freight contracts and issues to be aware of when negotiating a freight contract.
" What are the risks in a freight contract and how can you protect yourself?
" The relationship between the freight contract and the SPA
" Credit issues - how to protect yourself against counterparty defaults and performance.
Coffee breaks at 10.30-11.00 and 15.00-15.30
17.00: Closing of the course
