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A liquefied natural gas (LNG) company preparing to commence operations faced a significant challenge—it lacked a formal market risk function to identify, measure, and manage the price exposure associated with LNG production, marketing, and trading activities. The absence of a defined risk framework, quantification models, and governance processes left the company virtually blind to its exposure to volatile global gas markets. The leadership team recognized the need to establish a fit-for-purpose market risk function aligned with the scale and complexity of its upcoming operations, counterparties, and commercial strategy.
We designed and implemented a comprehensive market risk program from the ground up. Defined the market risk governance framework, including policies, procedures, and reporting structure. Developed risk quantification models to measure exposure, sensitivity, and potential loss under various market scenarios. These models were used to establish a risk appetite and limit framework consistent with the company’s commercial objectives and board-level tolerance. The resulting risk analysis was used to quantify the company’s exposure to LNG and related gas benchmarks and ultimately resulted in the company’s Risk Management Committee approval of the market risk program and associated controls.
The new framework provided management and the board with enhanced visibility, decision-making confidence, and governance oversight—positioning the company for disciplined and controlled growth as LNG operations commenced.
Market and Counterparty Credit Risk
Conventional and Renewable Energy Developer
Global liquified natural gas development company
