SUBSCRIBER NOTE: Platts to revise USGC propane cargo, shipping laycans

S&P Global Platts will revise its US Gulf Coast propane cargo and freight assessment methodology in terms of laycans, and update the VLGC freight route methodology from the US Gulf Coast to Japan to reflect current market activity through the Panama Canal, effective from April 2, 2018.

Platts first proposed this change in a November 13, 2017, subscriber note and has received broadly supportive feedback for the change.

CHANGE TO USGC PROPANE CARGO AND SHIPPING LAYCANS: Platts will revise the laycan for its FOB Houston propane cargo assessment to 30-45 days forward, from the current 15-30 days forward, based on market feedback and observed activity. In addition, Platts will also change the laycan for its VLGC freight assessments for Houston-Japan and Houston-Northwest Europe to 15-45 days forward from the current 15-30 days forward. Spot activity outside of the assessed loading periods may be considered for assessments, but this information may be normalized.

UPDATE TO VLGC HOUSTON-JAPAN FREIGHT ROUTE: Platts will reflect the most competitive value of chartering a VLGC in the spot market to load propane from the US Gulf Coast for export to Japan. This has typically been through the Panama Canal following the opening of the Neopanamax locks June 26, 2016. Since then, more than 90% of LPG VLGC shipments from the US Gulf Coast to North Asia have occurred through the Panama Canal, according to cFlow, Platts trade flow software. Current freight methodology does not specify a specific route, as most VLGCs could not traverse the Panama Canal prior to the June 2016 expansion.

With this note, Platts has also published a separate subscriber note to include additional LPG export terminals on the US Gulf Coast in the FOB Houston propane cargo assessment from April 2, 2018, as well as a change in the name and pricing basis of the cargo assessment from FOB Houston to FOB USGC.

USGC propane cargo and shipping assessments appear in Platts US Marketscan and Platts LPGasWire; on Platts Global Alert page 780; and in the Platts database under the following codes:

ASSESSMENT CODE Propane FOB Houston ($/mt) AAXIM00 Propane FOB Houston vs Propane Mt Belvieu ($/mt) AAXIO00 Propane FOB Houston (cts/gal) AAXIN00 Propane FOB Houston vs Propane Mt Belvieu (cts/gal) AAXIP00 VLGC Freight Houston-Japan ($/mt) AAXIS00 VLGC Freight Houston-Japan (cts/gal) AAXIT00 VLGC Freight Houston-NWE ($/mt) AAXIQ00 VLGC Freight Houston-NWE (cts/gal) AAXIR00

Please send comments and feedback to americas_products@spglobal.com and pricegroup@spglobal.com.

For written comments, please provide a clear indication if comments are not intended for publication by Platts for public viewing. Platts will consider all comments received and will make comments not marked as confidential available upon request.