Our client had a growing NGL trading book that was modeled by the front office in spreadsheets, outside of its ETRM system. Since NGL deals were not captured in the client’s ETRM system, nor was it supported in the software “out of the box,” the mid office had no visibility into risk exposures or P&L for the NGL book.
Our consultants gathered requirements, designed the process, and implemented a model to capture and value NGL deals within the client’s ETRM system. Additionally, our consultants developed an automated spreadsheet deal upload process directly into the ETRM system, thereby eliminating manual deal entry.
By placing risk mitigation tools into the production version of the ETRM system, and providing effective risk measurement via the risk reporting engine, millions of dollars of potential risk exposure was captured. The NGL position and P&L were now successfully reported daily, as opposed to a single report at month end.