Beyond the silo: The value of integrated energy portfolios

Energy companies are experts at squeezing efficiencies from individual assets. But the sector’s next wave of value creation will come from managing portfolios as integrated systems.

What’s new is not the value of portfolio optimisation, but the scale of opportunity as energy systems become more interconnected and commercial optionality expands. In the current environment, we see increasing value for businesses that can coordinate feedstocks, logistics, infrastructure, energy flows and commercial decisions across an integrated portfolio. 

This article examines what’s possible through three industry examples: a 13-refinery US portfolio, a pan-ASEAN power grid and the end-to-end LNG value chain. Each one demonstrates the huge amounts of value being left on the table when energy companies fail to optimise at the portfolio level.

The silo trap

Increasingly, in energy portfolios, siloed management creates a structural drain on portfolio value:

• A refinery produces exactly the wrong product mix for a sister site three states away, one that would happily take its surplus naphtha as a feedstock, avoiding open-market purchase costs.
• A national grid dispatching its cheapest marginal plant pushes a neighbour to run expensive open-cycle gas peakers, while curtailing solar that the neighbour would gratefully absorb.
• In the LNG chain, a cargo is locked to a lower-netback market because the desk couldn’t see a live diversion, or a vessel is run as pure transport when it could have served as floating storage.

Why silos persist

These outcomes are rarely the result of poor operational decisions. They are the predictable consequence of commercial models designed to optimise individual assets rather than integrated portfolios, caused by:

• Rewards for local performance. Refinery leaders are measured on site contribution margins. Trading teams are assessed on cargo lifted or individual transactions. Grid operators are accountable for their own networks. When incentives are tied to local P&L, leaders are unlikely to make decisions that create value elsewhere in the portfolio.
• Fragmented information. Operational, commercial and market data often sits in separate systems across assets, regions and business units. Without a single, real-time view of production, inventories, logistics, prices and contractual positions, opportunities for coordination remain invisible.
• Structural barriers. Regulatory regimes differ across jurisdictions. Long-term supply agreements, power purchase contracts, take-or-pay obligations and fixed shipping arrangements constrain operational flexibility. And many energy organisations simply lack the analytical tools needed to optimise across multiple assets, relying instead on systems and capabilities built to maximise individual asset performance.

The result is less portfolio and more a collection of independent businesses. As energy portfolios become more interconnected and dynamic, the commercial cost of that fragmentation continues to grow. 

Case study 1: A portfolio of 13 US refineries 

Situation: A portfolio of 13 complex refineries (FCC and hydrocracking) across the US Gulf Coast, Midwest and West Coast, with a combined throughput of approximately 1.75 million barrels per day, is already delivering strong operational performance. Each refinery manages its own P&L, crude procurement, planning and logistics, and is optimised for its local market. 

Optimisation opportunity: Using six, additive integration levers would create a margin uplift of $0.50–$1.00+ per barrel – or US$300-600MM each year.

Six integration levers

Real-world example 

A leading US refiner operating a comparable network (~1.4 mb/d across Gulf Coast, Midwest, West Coast) explicitly attributes ~US$500M a year in structural operating synergies to its integrated operating model. The refiner says that integrated midstream connectivity ensures reliable supply and integrated logistics, improving flow assurance, feedstock quality, blending efficiency and market flexibility.

Case study 2: The pan-ASEAN power grid 

Situation: Southeast Asia is navigating one of the most complex energy transitions in the world: 10 nations, 680 million people, fast-growing demand and a shift from coal and gas to renewables across divergent national mixes, regulatory regimes and development levels. The region’s renewable resource is vast but uneven. Laos and Myanmar sit on some of Asia’s largest undeveloped hydropower reserves. Vietnam and Thailand have exceptional solar irradiance. Indonesia and the Philippines have significant geothermal potential. Almost none of this complementarity is being exploited across borders. Only a few billion USD$ has been invested in cross-border power interconnectors across ASEAN in over 50 years – less than the region spent on domestic transmission in 2024 alone. Political and policy friction is real, but clarity on the potential upside to share will help. 
 
Optimisation opportunity: A regionally integrated scenario has potential to cut total power-capacity requirements materially by 2035, creating operational savings in the multi-billion-dollar range. 

Potential integration levers

Real-world example: Europe

An integrated Nordic market – large hydro storage compensating neighbouring wind and nuclear variability – is the closest operational analogue to what an integrated ASEAN system in the Greater Mekong (Laos hydro plus Thai and Vietnamese solar) could become. The mechanism is identical and the resource profiles map almost exactly. What differs is the institutional architecture.

A note of caution: a Southern African power pool has been physically connected for 30 years yet recently traded only about 2% of demand across borders. Wires alone do not capture integration value. Market design, liquidity and multi-country governance are essential co-investments.

Proof of concept: ASEAN’s first multinational cross-border trade

Case study 3: The LNG value chain 

Situation: A fully integrated vertical LNG business spans five interconnected stages: upstream gas, liquefaction, shipping, regasification and downstream sales. Yet in most organisations, each is managed and measured independently. Each function is optimised based on different objectives. An upstream JV maximises field output. A liquefaction tolling agreement maximises plant utilisation. A chartered fleet minimises freight cost per voyage and maximises vessel utilisation. A regas slot is filled to maximise plant use. Marketing teams focus on individual cargo or trading outcomes. In isolation, each set of decisions is rational. Collectively, they can still fail to maximise the value of an LNG portfolio.

Optimisation opportunity: LNG is the purest illustration of the silo thesis: a single commodity whose value is created almost entirely in the coordination between physically and commercially separate stages. Specifically, the value of an LNG molecule is the difference between the cost of producing gas at the wellhead and the netback achieved in the highest-value market the cargo can reach. Capturing that value requires coordinating production, shipping, storage and marketing as a single commercial system. Then cargo can be redirected in flight to a higher-value market, vessels can be used as floating storage to capture a seasonal spread – and production can be aligned with market demand.

Five integration levers

Capturing the integration opportunity

As energy systems become increasingly complex and interdependent, the gap between silo optimisation and value chain optimisation is widening. Every asset added to a network without integration capability is a new source of coordination loss.

For energy leaders willing to treat their asset portfolios as systems, not collections, the prize is measurable and large. As this paper shows, whether reallocating blendstocks between refineries, moving energy between markets or optimising LNG flows across regions, the greatest commercial gains often lie in the relationships between assets rather than within them. 

Three ways to unlock portfolio value

1. Pool demand to strengthen your market position. Coordinate procurement and feedstock decisions across assets to increase buying power and sourcing flexibility.
2. Optimise across time and geography. Use storage, logistics and operational flexibility to shift resources where and when they create the greatest value.
3. Develop portfolio optimisation capabilities. Surface the data and build the commercial architecture to identify and exploit opportunities that only exist between assets. 

Four stages to integrated optimisation

Where to start

Capturing the prize requires deliberate investment in organisational design, data, commercial architecture and governance. 

1. Start with data, not decisions. The most common failure mode is to attempt commercial integration before the information infrastructure exists to support it. A single, real-time view of positions, costs and optionality is the prerequisite for everything else.
2. Redesign incentives before processes. Portfolio- tools will be ignored or gamed if managers are still measured on local P&L. A portfolio-contribution metric - crediting an asset for value created at the system level - changes the behaviour underlying the coordination failure.
3. Treat governance as an asset, not an overhead. Cross-site and cross-border optimisation needs a legitimate coordination function with clear decision rights, dispute resolution, and the authority to enforce system-level decisions. Without it, integration degrades back into a negotiation between silos.
4. Phase commercial integration carefully. Transfer pricing, inter-company swaps and shared risk books need legal, tax and regulatory architecture that takes time to build. Avoid retrofits. Design it concurrently with the operational capability.

How Baringa can help

Baringa works with energy businesses at every stage of the integration journey, from data foundations and multi-asset optimisation models to the commercial and governance frameworks that make integrated optimisation stick. Our work spans refiners, integrated utilities, national grid operators, and LNG and energy-trading businesses across Europe, the US, and Asia-Pacific.

If you would like to discuss how these principles apply to your portfolio, please reach out to our team.