Natural Gas Midstream
Midstream natural gas companies operate in an environment that is under financial, competitive and regulatory stress. Conflicting legal and regulatory frameworks, pervasive contractual disputes and high market volatility generate increasing challenges to operating management. FTI Consulting energy professionals bring gas industry operating experience and litigation support expertise to companies and their counsel. We provide a unique combination of seasoned managerial and executive experience with insights gained from years of dispute management, damages analysis, public policy analysis and expert testimony.
How We Help
Antitrust & Competition Economics
FTI Consulting and its subsidiary, Compass Lexecon have provided expert advice and testimony in hundreds of complex antitrust actions and M&A transactions. We apply cutting-edge industrial organisation theory and use sophisticated economic and econometric analyses to dissect and define the complex issues that define these engagements. We have evaluated proposed mergers and acquisitions on behalf of both government agencies and private entities. Using rigorous, state-of-the-art analytical methods applied to complex data, we evaluate the likely effects of proposed mergers and acquisitions on prices, costs and competition. Our professionals also regularly assist both defendants and plaintiffs in antitrust litigation, including cases involving price fixing, predatory pricing, bundling and various forms of allegedly exclusionary conduct. An integral part of our role in many of these cases involves the estimation of lost profits or damages from elevated prices and output restrictions. Clients seek our advice for:
- Market Definition. There are basically two components that are key to market definition — which products are in a market and the geographical scope of that market. Market definition is important because, depending on the scope of the market, a company may be found to be dominant. FTI Consulting and subsidiary, Compass Lexecon have competition economists with significant experience in advising companies on competition investigations. For companies being investigated for abuse of dominance, our economists advise on how best to define the market or how best to defend a company’s position when the competition authorities advance a particular market definition. For companies suspecting abuse of dominance from a competitor, we again assist in defining the relevant market as a precursor to further work on tackling the dominance.
- Abuse of Dominance. Companies that have a very high market share and where there are significant barriers to new entry may be considered dominant. They could be considered to abuse their dominance if commercial practices exclude others from the market or if they exploit the dominant position to the detriment of the market. FTI Consulting and Compass Lexecon’s energy team has competition economists with significant experience in advising companies on competition investigations. For companies being investigated for abuse of dominance, our economists advise on how best to defend a company’s position against allegations of abuse and provide economic analysis to support the position.
- Anti-Competitive Agreements. Companies can distort fair competition by cooperating with competitors, fixing prices or dividing the market up so that each has a monopoly in part of the market. On behalf of our clients — companies, regulators, even governments — FTI Consulting and subsidiary, Compass Lexecon provide advice to companies being investigated for having an anti-competitive agreement. Our credentials are without peer. Because we have the top professionals in competition economics and energy economics, we can analyse the anti-competitive behaviour, identify the wrongdoers and provide regulatory solutions or legal recommendations.
- Sector Inquiry. Unlike abuse of dominance or anti-competitive agreements, a sector inquiry does not investigate a particular allegation but is a review into how well competition is working in the market. Sector inquiries can lead to remedies being imposed or recommendations made which change the functioning of the market, or indeed, lead to competition investigations into particular companies. FTI Consulting and subsidiary, Compass Lexecon have supported clients in markets facing a sector enquiry through strategic advice and supporting economic analysis. We have experts who have previously worked with the competition authority and can advise authoritatively drawing on experience as well as economics.
The FTI Consulting Energy team has extensive skills and experience in addressing key economic issues that affect mid-stream gas companies, either directly or through government policy and regulation. We have advised clients on issues of market design, on pricing and on other elements of strategy. We have provided detailed analysis and recommendations on environmental policy, policies related to security of supply, and other key issues. Our work combines rigorous economics with real industry knowledge, and clear communication of our findings. Clients seek our advice for:
- Market Design. Market design of wholesale gas markets addresses such key issues as the arrangements for trading gas (including the design of gas hubs), the charges for accessing the gas networks and the regulatory arrangements for investing in gas infrastructure. The Midstream Natural Gas professionals at FTI Consulting are well versed in doing high-level design as well as implementation in a range of countries in Europe and worldwide. We are expert at designing the network code arrangements that support high level market design and implementation. In addition, some of our professionals are ex-regulators. We advise governments, the European Commission, and regulators on market design rules. Also, we advise the companies that are subject to these rules — what they might mean for their business model, what they need to know to comply, how they can influence these rules, how they can assess the impact of them, and what alternative approaches are feasible.
- Gas Strategy. The European natural gas industry faces a number of challenges. Currently gas demand in Europe has fallen due to an increase in the use of coal and renewables in the generation of electricity, which in turn dampens the incentive to invest in gas infrastructure or production. Yet given its growing dependence on gas imports due to the decline in domestic production, there have been concerns about security of supply and policy makers have called for an increase in cross-border interconnection across Europe. The need for a common European natural gas market to ensure the EU has both the storage and delivery capacity to absorb any supply disruption is key. The integration of gas networks across the EU is therefore an essential step to guaranteeing Europe’s energy security. Furthermore, given the potential for exports of LNG from the U.S. to Europe in the coming years, there is a question about how the outlook for the gas supply/ demand balance in Europe will evolve and which investments are likely to be profitable. FTI Consulting Midstream Natural Gas professionals are well versed in these issues. Our experts have worked with market participants, regulators, governments and the European Commission, to develop the strategies, market designs, policies and regulations that will help bring about a stable European gas supply.
- Environmental Regulation. Managing and resolving environmental challenges and financial exposure potential through strategic consulting, communications or litigation support are of vital importance to both public and private entities. FTI Consulting offers a comprehensive suite of services aimed at helping organisations deal with specific environmental issues or programmatic challenges. Our team includes financial and accounting, cost allocation, forensic history, private investigation, data management and technical/engineering professionals. The Environmental Solutions team has broad and in-depth experience serving clients and have provided expert and 30(b)(6) witness testimony. Our specialists provide clients with services in the areas of alternative dispute resolution (arbitration and mediation), clean-up cost and damages allocation, financial and cost accounting, forensic historical research, private investigations and environmental claims analysis.
- Security of Supply. FTI Consulting has expertise and deep knowledge of security of supply conditions and arrangements in different European countries. We have provided reports and studies to clients on the types of measures that could be introduced and have assessed the impact of these different measures. We have advised transmission system operators, gas shippers who buy and sell gas, storage operators, regulators and governments.
Key components of the European natural gas infrastructure include transmission and distribution pipelines, storage facilities, interconnectors and LNG facilities. The transmission and distribution networks are generally price regulated, which means that these assets earn a guaranteed revenue stream, which is set by the regulator (a process known as a price control). However, storage, LNG and in some cases interconnectors are often merchant investments and must compete in the market to earn revenues. FTI Consulting Midstream Natural Gas professionals advise companies as well as regulators on price controls and the conditions for operating regulated assets as well as on the economics and regulatory requirements of investing in merchant infrastructure. Clients seek our advice for:
- Transmission & Distribution. Key components of the European gas infrastructure are two different types of pipelines – transmission and distribution. Usually part of larger, longer distance networks, transmission pipelines use high pressure to deliver faster gas flows. Distribution pipeline networks are smaller pressure pipelines that deliver gas to people’s homes and businesses. Transmission and distribution networks throughout Europe are subject to regulation with price, tariff and revenue controls. FTI Consulting has economists who are experts who advise companies as well as regulators on price and revenue controls. Also, we have professionals who are experts at negotiating with regulators. They advise clients on negotiating with regulators, on setting revenue goals, on calculating operating costs, and on how to drive home a position to a regulator. In addition, we advise companies, pension funds or other investors who are interested in investing in regulated assets such as gas distribution and transmission networks for their regulated rate of return.
- Storage. One of the big challenges facing storage operators in Europe is that, with demand for gas declining, there is less demand for storage. As such, there has been closure and mothballing of storage sites in Europe. At the same time, European governments are keen to ensure security of supply and gas storage plays an important function in providing a reserve of gas, which can be used in periods of high demand. Different regulatory approaches apply to European gas storage, with it being price regulated in the some European countries, subject to certain regulatory requirements to incentivise it being used and entirely unregulated in others. FTI Consulting Midstream Natural Gas professionals advise storage operators who own the assets on how, in a world of declining demand, to establish best value for their products, how to navigate the governmental and regulatory landscape, and how to compete with competitive storage assets.
- Interconnectors. Interconnectors are pipelines that connect two markets or exist within a market to connect two different networks. Natural gas interconnectors are important in the drive to achieve a single European energy market. They permit gas to flow to the market signalling the highest demand. Some interconnectors are price regulated and others are not. However, even for merchant interconnectors, there is significant regulatory oversight and regulatory approvals required for the way the capacity is made available to the market. FTI Consulting Midstream Natural Gas professionals have worked with clients who own or are planning to build interconnectors. This includes issues like developing strategies for engaging regulators, assessing the economic and business case of the asset, and developing the ideal approaches to secure regulatory approval to build or buy existing interconnectors.
- LNG. With Europe dependent on imports to meet its gas demands, liquefied natural gas (LNG) plays an important supply role, coming from around the world to regasification terminals based in the UK and across Europe. The current outlook for LNG is changing rapidly, with cheap sources of excess shale gas in the U.S. Furthermore, given the potential for exports of LNG from the U.S. into Europe in the coming years, there is a question about how the outlook for the gas supply/demand balance in Europe will evolve and which investments are likely to be profitable. FTI Consulting Energy professionals are well versed in LNG issues. We deal with LNG operators in pricing disputes and compliance with all rules and regulations. Also we advise on a more strategic level, such as the evolution of the supply and demand, on balancing the energy needs of Europe and likely future developments in the LNG regulatory landscape.
The European natural gas market is still recovering from the aftermath of what many refer to as the “perfect storm” — the liberalisation of natural gas shifting markets from monopolies to market-based pricing, the aftershocks of the 2008 financial crisis, and the discovery and production of shale gas in the U.S. The result has been a significant reduction of demand for natural gas and a substantial increase in supply, creating highly price-competitive markets. Such an environment has given rise to many disputes between producers and midstream distributors. FTI Consulting Energy professionals have deep expertise in the European natural gas sector and are well versed in international arbitration about the pricing of gas. We act as economic experts, providing analysis of how markets are changing and how the pricing of natural gas should change to reflect changes in those markets. Clients seek our advice for:
- Price Reviews. The emergence of European hubs and market-based gas prices has enabled gas producers, suppliers and traders to transact business with each other. There has been increasing convergence of prices at these hubs. By trading natural gas like a commodity, market participants can buy and sell standardised contracts, futures, and contracts for natural gas delivery next month or next year. Such an environment has given rise to inevitable disputes. FTI Consulting Energy professionals have deep expertise in the natural gas sector and are well versed in international arbitration about the pricing of gas. We act as economic experts, providing analysis of how markets are changing and how the pricing of natural gas should change to reflect changes in those markets.
- Pricing Strategy. There are various elements to pricing that natural gas companies need to know — one is understanding competitive pricing strategies. This provides the pivot point for companies to establish their own pricing strategies. For example, if the objective is to acquire new customers and you are less worried about profit, your strategy might be to undercut the market. On the other hand, if you have a larger market share, and your objective is to optimise profits, your strategy might be to keep your prices high, recognising that you may lose some customers. FTI Consulting Energy professionals develop the pricing metrics that help clients determine pricing to cover their cost base and still provide a return that meets corporate goals and shareholder expectations. Such pricing clarity also helps determine the cost to sustain existing customers and the cost to acquire new ones.
Performance Optimisation, Merger Integration & Interim Management
FTI Consulting has deep expertise in enhancing company value. We have extensive experience across the deal lifecycle and with critical corporate situations that gives us a clear perspective on where value exists and how it can be optimised. We take a unique approach to midstream natural gas merger integration to customise the integration approach to deliver maximum value — we consider deal structure, industry sector and such unique client requirements as filling management voids. Clients seek our advice for:
- Interim Management. The success of a restructuring, merger, acquisition, spinoff or divestiture may depend on how quickly management voids can be filled or missing management capabilities can be added for a certain period. The seasoned energy professionals with C-level experience at FTI Consulting are prepared to fill the void when client companies face leadership, financial or operational challenges. At short notice, our experienced and credentialed senior executives assume C-level roles, providing the leadership and strategic decision-making ability to transform company processes or organisation, maintain momentum, establish corporate priorities, build morale and provide critical continuity. Our C-level executives serve in the following roles: chief executive officer, chief operating officer, chief financial officer, chief restructuring officer, controller and treasurer.
- Project Management and Optimisation. Companies often do not have the resources to properly manage the budget and timetable for the construction and/or installation of a midstream natural gas facility or other critical programmes. FTI Consulting has those resources to assure that a client’s budget and timeline are met. Through our exclusive Project Management Office (PMO) approach, we identify the root costs of deviations, define measures to get back on track, and support the implementation of those measures. We set up a specific governance structure to track the implementation of the measures to assure that final targets are achieved. All this is based on our long-term experience in these situations and secures, that results are achieved with minimised additional workload for key staff.
- Profit Improvement. Companies that have midstream natural gas facilities that are up and running but not meeting expectations — e.g., disappointing cash flows, technical mishaps, etc. — call on the highly experienced professionals at FTI Consulting to analyse existing conditions and propose and implement financial and operating improvements. This process helps our clients maximise efficiencies at their facilities, and achieve improved profitability levels and operational standards. Based on our long-term project experience we identify the most relevant operational improvement levers and secure that they are successfully implemented.
- Cash & Working Capital Management. It is critical that midstream natural gas companies manage cash and working capital. The difficulty is that many companies do not have the resources or the experience to develop the required methods and processes. Because of our extensive experience with midstream natural gas clients, FTI Consulting is often called upon to help. Our professionals include former natural gas managers and former operations managers. We customise cash flow forecasting, modelling, monitoring processes and working capital management. Most any evaluation of working capital management involves inventory control. We secure that minimisation of inventories is done without jeopardising the client’s operation. Our experience guides us in developing and implementing capital optimisation strategies for our clients that are practical and operational.
- Merger Integration & Carve-out Planning. The success or failure of a merger usually depends on what is accomplished after the deal closes. Merger integration of cultures, processes, organisation, assets, personnel, IT, and business activities is a complex process that can take a few months to a few years. FTI Consulting professionals, in our Corporate Finance and Economic Consulting Practices, have wide experience — in the midstream natural gas sector and in most all industries across the globe — to provide the critical integration support necessary to sustain the merged business’s operational and financial performance. And where a midstream natural gas company needs to acquire only a portion of another, FTI Consulting carve-out specialists can prepare a deal that will deliver the right people, the right assets and the right infrastructure to the acquiring company and then follow up with the integration of the carve-out assets.
- 100-Day Plans. In transformation phases, e.g., when a new CEO, COO or CFO joins a company, there are many issues that need to be addressed and prioritised urgently, reviewed quickly, or tabled until later. They need to be prioritised. Because of the vast midstream natural gas experience of FTI Consulting professionals, we are often called upon by new management of a natural gas company or facility to create a plan for the first 100 days. This is very detailed and structured and prioritises specific tasks accompanied an actionable plan for each. The plan incorporates past efforts with current needs that support attainable goals. Included are responsibilities of others involved and a timeline. The result is a fast, controllable and efficient ramp up or change process for new management.
The Natural Gas Midstream team within the FTI Consulting Strategic Communications Practice includes sector experts with experience representing a broad range of organisations and companies, from start-ups to multinationals. Our clients benefit from the team’s relationships with key influencers to seize opportunities, manage crises, navigate market disruptions, articulate brands, stake a competitive position, and preserve a client’s permission to operate. We have the breadth and depth of experience to help clients clarify, persuade and ensure that the right message reaches the right audience at the right time. Clients seek our advice for:
- Corporate Communications. Historically, the energy industry in general and its participants have not communicated their stories very well. External communications have been non-existent or guarded at best. As a result, corporate reputations and public trust in the industry are low. Companies need to tell their story, not just after an oil spill or some other crisis, but on an ongoing basis to communicate what they’re about, what they’re doing (and why) and why they are competent and can be trusted. Corporate communications is basically doing the everyday “heartbeat outreach” to build, sustain and defend an organisation’s reputation. FTI Consulting Strategic Communications professionals are highly experienced and well equipped to help individual midstream natural gas companies and entire industry sectors defend their licence to operate by highlighting innovation, sustainability, corporate responsibility and the enormous economic contribution they make to society as employers and providers of essential services.
- Financial Communications. Financial communications tend to be either defensive or offensive. On the defensive side, for example, companies may be experiencing a declining share price or a rising bond price. FTI Consulting strategic communications professionals are highly experienced reaching and communicating with those people who influence financial performance — stakeholders, institutions, mutual and hedge funds and security analysts. It is critical that these audiences receive and understand a company’s key messages about corporate strengths, management strengths, corporate strategies and steps being taken to improve corporate performance. On the offensive side, financial communications should be ongoing, reinforcing the same company key messages — corporate strengths, management strengths, corporate strategies and steps being taken to improve corporate performance — usually in support of an IPO, acquisition, or to simply sustain existing share price performance.
- Issues & Crisis Management. There are basically two types of crisis situations — a crisis of reputation where important audiences are losing faith in a company, its performance, and its leadership; or a high impact/low probability crisis such as an explosion at a production facility or the death of a senior executive. To help clients prepare for such eventualities, FTI Consulting professionals take a campaign-like approach to these challenges, closely coordinating with management teams, as well as legal, financial and other advisers to provide strategic counsel on all aspects of internal and external communications. We help identify, prioritise and track issues — economic, financial, political, industrial, or technical — that can impact on the client’s performance, its reputation, and its value. We then advise on how to address them proactively to achieve a positive outcome.
- Stakeholder Communications. Companies must consider each stakeholder group separately to engage in a proper dialogue with them. It is critical that all stakeholders be identified. FTI Consulting Strategic Communications specialists research all possible stakeholder groups, not just establishing who they are and how important they are to the company, but also what they want and need to know and what information the client can give them. This includes examining how our client has been communicating to them in the past and what it should be saying today and in the future. In addition, and just as importantly, clients need to listen to their stakeholders so that relevant messages can be crafted and addressed to each specific audience. FTI Consulting analyses and prioritises stakeholders and messages and develops programmes for clients that help facilitate audience-specific messaging to create a proper dialogue with those people who have the greatest financial influence on the client’s business.
- Public Affairs & Policy. Legislation and regulation have an enormous impact on the midstream natural gas industry. Political stakeholders, elected representatives at local and national levels, civil servants, people who work on the executive arm of the government, advisers, policy think tanks, commentators, and academics all play an important part in the public debate on natural gas issues. It is critical that a midstream natural gas company’s communications help it be better known among these groups, help it be listened to more, and help its interests be better understood when decisions are being made that affect its business. FTI Consulting works with individual companies and their trade associations to seek to affect government policy regarding permitting and licensing issues for natural gas facilities, as well as issues affecting existing installations such as state aid, patent discounts, etc. We also conduct grassroots campaigning in local communities to overcome resistance to a client’s new installation.
- Planning & Public Consultation. Starting a midstream natural gas project in the UK and throughout Europe is a very complex undertaking. It ranges from developing construction plans and applying for permits to satisfying all requirements from government/regulatory agencies during construction to meeting the needs of the public who may not want the project in their backyards. FTI Consulting professionals are experts at guiding companies through this process, from the actual application and construction through to the public consultations, holding meetings with local communities, talking to local elected representatives, etc. Communications is key. It is important that all audiences know and understand that our client is a responsible company in a responsible industry, providing employment and an essential energy service.
- Government Relations. Legislative and regulatory pressure is becoming more prevalent in the midstream natural gas sector, which increases a company’s compliance obligations and can jeopardise its license to operate. Managing political risk is a growing imperative for effective corporate governance and business planning. FTI Consulting combines public policy, capital markets and sector-specific expertise to offer a unique capability for midstream natural gas clients operating at the critical intersection between business and government. Our involvement can extend from specific natural gas issues to on-going government campaigning in support of client positions on tax, environmental or public policy issues.
- Competition Investigations. From time to time, participants in midstream natural gas markets may find themselves involved in some way in competition investigations relating to alleged antitrust violations, regulatory scrutiny of an M&A transaction, claims of state aid, or sector inquiries. Communicating effectively to the press, to relevant regulatory and legislative stakeholders, and to a firm’s investors and employees is a key component of protecting the firm’s reputation, allowing the business to function normally while the investigation is ongoing, and securing a rationale outcome. In these situations, FTI Consulting’s Strategic Communications professionals specialise in helping clients to interact constructively with political and regulatory audiences in articulating the larger business and political contexts in which the company operates, and the ways in which the public benefits as a result.
- Rebranding & New Message Development. Rebranding can be a defensive or offensive strategy for a midstream natural gas company. The company may need to distance itself from a negative perception that exists in the minds of consumers, investors, competitors, and other stakeholders. On the other hand, the company may want to communicate a new corporate strategy and messaging that the old brand cannot support. In either case, rebranding usually involves radical changes. FTI Consulting Strategic Communications specialists work with our clients to develop a consistent message framework for addressing key issues that affect the new brand. At the same time, we take a structured, research-based approach to identify, map and prioritise stakeholders to help create tailored messages that will strengthen stakeholder support. Then we go to work developing the new brand's logo, name, legal names, image, marketing strategy and advertising and public relations themes.
Even though there are taxation principles widely recognised and applied on an international and global basis, much of tax law is specific to local jurisdictions. It is important that midstream natural gas companies have access to local tax advice and this is particularly so with the myriad of energy sector specific measures. FTI Consulting has a team of International Tax professionals that is well versed in local tax law and a global network of local tax law specialists. Clients seek our advice for:
- Transaction Tax. Midstream natural gas companies involved in mergers, acquisitions, divestitures, or restructuring face a myriad of costs, including to the transaction. Transaction taxes can be direct — corporate and energy sector taxes — and indirect — VAT and stamp taxes. FTI Consulting professionals, ideally armed with vendor due diligence and buy-side due diligence, develop strategic solutions to tax issues that clearly present possible risks or opportunities in the transaction. Our goal is to help our clients understand and optimise their position. Supporting this goal is the recognition that many midstream natural gas companies operate in more than one jurisdiction. In these cases, we function as local tax advisers as part of a Global network known as WTS that covers more than 100 jurisdictions.
- International Tax. When dealing with international tax matters, it is vital to combine local law with the international tax framework (particularly around ownership and financing issues) and the nuances within the energy sector. FTI Consulting has a team of seasoned International Tax professionals and, through its global network, has access to local tax law specialists in over 100 jurisdictions. These teams work together to successfully deliver realistic and pragmatic advice in combination across energy sector projects.
- Corporate Tax Compliance/Reporting. It is important that midstream natural gas companies have access to local tax advice that can support them in managing their tax obligations. FTI Consulting, along with its international network of local tax law specialists, is able to essentially act as an outsourced tax department to assist midstream natural gas clients with their corporate and indirect tax compliance and reporting.
- Real Estate Tax Advisory. Midstream natural gas companies must navigate the evolving complexities of real estate tax laws and regulations. In all cases, a company’s real estate assets have tax implications. FTI Consulting Tax professionals specialise in real estate tax structures and compliance strategies, identifying opportunities and creating solutions for natural gas clients.
- Research & Development Tax Solutions. The midstream natural gas sector has benefited from various R&D and intellectual property incentives in different parts of the world. In addition to tax credits for R&D, there are opportunities like Patent Box regimes in a number of jurisdictions designed to encourage R&D and innovation. But this landscape is complex and difficult to navigate, with government subsidies changing and sometimes drying up altogether. FTI Consulting has Accounting and Tax professionals who are well versed in the changing R&D tax environment. We advise our clients on current tax conditions and the planned future changes, giving them the insight to make intelligent R&D decisions and investments.
- Transfer Pricing & Tax Valuations. Transactions should take place at an arm’s length price because, otherwise, the parties, acting together, are in a position to use pricing to manipulate where those profits are realised. The natural inclination is to realise profits in lower tax jurisdictions. FTI Consulting has a team of Economists and Tax specialists that have extensive experience in all aspects of transfer pricing and tax valuations, from tax authority audits to comprehensive transfer pricing studies supporting complex transactions and Advance Pricing Agreements.
- Tax Policy & Strategic Communication to Stakeholders. Tax policy and tax strategy have become much more of a boardroom and a stakeholder issue in recent years. Approaches to tax management that were accepted as commonplace in years past are now being seen through a different lens and having a material impact upon a client’s business. With more people scrutinising tax strategy and tax policy, both within and outside the company, FTI Consulting Tax and Strategic Communications professionals now work closely together. Our collaboration supports boardroom understanding and generates targeted communications efforts that ensure that stakeholders (including tax policymakers) know and understand our client’s position.
Transaction Advisory & Restructuring
Regardless of where a midstream natural gas company may be in the deal cycle — from pre-announcement planning to post-merger integration — FTI Consulting professionals, whether representing buyers, sellers or lenders, offer comprehensive due diligence advice and hands-on support in evaluating opportunities across the risk/return spectrum. As part of a global consulting firm known for success in high profile, high-stakes transactions, we help our clients maximise value and minimise risk. Clients seek our advice for:
- Restructuring and Refinancing Lead Advisory. Whether a client’s transaction is a restructuring or refinancing of its existing debt obligations, it requires someone at the centre of the deal, making it happen. FTI Consulting professionals have functioned as lead adviser in countless natural gas midstream restructuring and refinancing transactions. We start at the very beginning in terms of articulating the transaction rationale and developing the process and timetable, and then leading that process through all phases. Typically, the process has two core stages — a financial due diligence stage, in which identifying and sharing all relevant financial information is identified; and a lead advisory stage, in which we coordinate the client’s efforts to liaise with the shareholders, financing parties (existing and incoming), their lawyers, and their stakeholders. Our goals as lead adviser are ensuring that the process runs smoothly, that the process unfolds on the established timetable, and to extract maximum value for our client.
- Financial Due Diligence. Midstream natural gas companies face transaction opportunities and challenges across the entire risk/return spectrum. Most are inexperienced and ill equipped to understand or manage the demands of these opportunities or transactions. FTI Consulting professionals are well-placed to lead our clients — buyers, sellers and lenders — through an entire transaction life cycle, offering comprehensive financial due diligence advice and hands-on support, including quality of earnings analysis, underlying working capital and net debt profile, forecast sensitivity analysis, and SPA advice to name a few. The result is that our clients complete transactions that are sound and sustainable.
- Contingency Planning & Insolvency. The ultimate goal of contingency planning for a company in financial distress is value preservation. A well-conceived plan will help a company minimise adverse impacts on a its business; will help the company act quickly to attempt to avoid creditors unilaterally de-railing a turnaround plan; and will help company management and directors identify viable plans to avoid insolvency (a credible “Plan B” may be necessary in order to persuade stakeholders to support a “Plan A”). FTI Consulting has a large Insolvency and Failing Businesses practice and has the resources to provide any midstream natural gas company in any kind of financial distress with a comprehensive contingency plan for recovery.
- Crisis Stabilisation. Crisis stabilisation tends to come into play shortly after a company begins to have liquidity and cash flow problems. Many companies have not experienced this problem and those that have probably didn’t handle it very well. FTI Consulting has professionals who know how to create a stable environment by starting to manage cash flow and working capital, and negotiating waivers and standstills to avoid rushes to recover assets. If the crisis is more dire — facility closings, employee layoffs, etc. — our crisis stabilisation professionals help clients prepare to communicate with employees, local and regional and national politicians and regulators, the public and the media about what the company is doing, why it is doing it and what effect it will have on restoring the company’s health and stability.
- Vendor Assistance. Vendor assistance is essentially M&A support for the seller in the sale of a project or asset. FTI Consulting professionals are well versed in providing vendor assistance services to clients, including helping vendors with presenting consistent and comparable financial information, highlighting key trading trends, assisting with quality of earnings analysis, and challenging forecast assumptions to ensure robustness, before providing such information to potential buyers.
Companies with natural gas and LNG assets require in-depth understanding of energy market dynamics that affect their holdings, including the regulatory environment and macroeconomic conditions. With our deep industry expertise, including former senior regulatory officials and valuation experts, FTI Consulting professionals understand the key drivers of the value of energy industry assets. We provide valuation opinions and expert testimony in traditional commercial disputes, including matters of economic damage, post-transaction disputes, professional negligence, and stakeholder controversy. We also offer valuation opinions and expert testimony before international arbitration tribunals. We regularly bring our energy market expertise and expert witness pedigree to bear in multi-billion dollar energy industry disputes.
In disputes relating to energy assets, courts and tribunals require clear, detailed evidence on the economic value of any alleged losses. We provide expert evidence in relation to the valuation of oil and gas and utility companies and assets, and expert testimony in traditional commercial disputes. We also offer valuation opinions and expert testimony in international disputes before international courts of jurisdiction and arbitration tribunals. Clients have engaged us in a number of material disputes involving midstream gas companies, for example, estimating damages arising from alleged breaches of contract under long-term gas supply contracts. While many of our engagements are confidential, it is a matter of public knowledge that we provide quantification of damages in relation to claims arising from the alleged failure to deliver gas from Egypt to Israel under a contract between Eastern Mediterranean Gas and EGAS.