The Project
The period from January 2020 to present has been the most volatile for natural gas prices worldwide in the last two decades. Volatility creates both risk and also significant business opportunity.
Essentia’s client is one of the leaders in global trading. A global hedge fund trading a variety of financial products and asset classes, active on exchanges on five continents, the client’s business strategy includes an expansion in trading physical and financial natural gas to capture the opportunities presented by market volatility.
The client needed a commodity trading and risk management (CTRM) platform that could provide real-time, centralized reporting on physical and financial natural gas positions, insight into the various elements of risk exposure, and visibility into profit and loss to ensure optimal trading decisions. Existing legacy trading and risk capabilities were not capable of supporting the business. Change was needed.
Essentia Deploys Openlink
For the software’s comprehensive capabilities, proven past performance, and robust position & risk management features, the client chose ION’s Openlink to support the natural gas trading business. As the commodity industry’s foremost ION CTRM platform experts, the client also chose Essentia to configure and deploy the Openlink platform.
To meet the needs of the commercial leadership, an 7-month project rollout was required. Success with such an aggressive timetable required a project strategy which combined key client stakeholders, Essentia’s team of Openlink experts, and an iterative three-sprint requirement, design, and proof of concept approach.
The team configured and deployed physical and financial deal capture, integration with ICE and other external systems utilizing Openlink Gateways, physical gas scheduling via gMotion, natural gas storage, storage valuation, and settlement (Settlements Manager). Workflow processes were meticulously configured and aligned to model the client’s trade confirmation and invoicing processes. Active Position Manager (APM) was deployed, as well as “PnL Explained,” enabling insight in real time throughout the trade day.
Post go-live, Essentia was chosen to provide daily super-user support to ensure seamless business continuity, user satisfaction & adoption, and maximum return-on-investment.
Client Benefits
Essentia challenged the norms and conventions typically associated with trading system deployments, by going from start to success in just 7-months. In comparison to typical peer projects this rapid approach represents a approximate 60% faster Openlink deployment compared to peers.
The success of this Openlink deployment provides a foundation for successive rollouts and the add-on of additional automation features. Up next are integration with natural gas industry electronic bulletin boards (“EBB’s”), swap data repository (SDR) integration, and an array of other automations which will ensure the client is optimally positioned to maximize its long-term strategic goals for expanding global energy trading.
Industry
Midstream
Commodities
Natural Gas
Technologies Deployed
Openlink
ICE
Essentia Solution Offerings
Strategic Advisory & Planning
CTRM Implementation
Super User Support
