2018 Southeast Agenda

•Natural gas exports outlook – LNG and Mexico
•US Natural gas exports will support US production growth
•LNG export utilizations will be driven by seasonal demand & price
•Mexican market growth driven by substitution and displacement
•Mexican natural gas infrastructure developments – or lack thereof

Natural gas prepayments have re-emerged as a viable gas purchasing strategy for municipal LDCs. After a hiatus of several years where market conditions made economic gas prepayment transactions difficult to complete, we have seen several successful closings in the last 9 months, including most recently the Black Belt Energy prepayment with J. Aron/Goldman Sachs that closed on March 9. An expert panel of experienced gas industry professionals who were involved in that transaction will discuss gas prepayments, what they are, how they work, who the joint action agencies are who do them, who the prepaid gas suppliers are in the market, how they work to help customers lower their gas costs while achieving long-term, reliable supplies, how customers have approached these opportunities, and what a customer needs to know if it is considering participating in one.

•Case study discussion of the structure of the deal with Greenville Utilities Commission. (GUC). Discussing the structure of the deal including pros/cons, risks, upsides, etc. and why GUC thought it made sense for them and whether other utilities should consider it.
•Pre-payment allows municipal utilities to use tax-exempt bond proceeds to prepay for natural gas.
•Savings are generated by the spread between the gas suppliers taxable discount rate and tax-exempt cost of capital, he said.
•The program creates a long-term gas supply with monthly price discounts and annual rebates and no bond or financial swap obligations.