Platts clarifies detail on proposed WTI Midland FOB Scapa Flow loading program

In response to market feedback, S&P Global Platts would like to clarify its proposal to publish a loading program for WTI Midland ship-to-ship deliveries on a free on board basis Scapa Flow, effective concurrent to its current formal consultation regarding the inclusion of WTI Midland crude in its Dated Brent benchmark, and all related assessments.

Platts has extended this consultation until Feb. 12, 2021.

This proposal adds further detail to this consultation.

Platts published the formal consultation note Dec. 3, 2020, which is available here:

https://www.spglobal.com/platts/en/our-methodology/subscriber-notes/120320-sampp-global-platts-opens-consultation-on-inclusion-of-wti-midland-crude-in-dated-brent.

In order to promote full transparency around supply, Platts proposes to publish a daily virtual loading program for WTI Midland reflecting the cargoes available to be bid and offered on an FOB STS Scapa Flow basis.

Platts currently publishes daily up-to-date loading programs for the five Dated Brent basket grades (Brent Ninian Blend, Forties, Oseberg, Ekofisk, and Troll) on PGA 1260 ahead of the Market On Close (MOC) assessment process.

Platts proposes publishing submissions of deliverable WTI Midland cargoes basis FOB Scapa Flow for parcels that could be nominated against Cash BFOE obligations for the same applicable delivery month.

Only those cargoes that had been submitted to the virtual loading program with demonstrable supply and logistics would be deemed available for inclusion in the Dated Brent assessment and MOC assessment process, in line with the 10 day-to-month-ahead date range.

To ensure the mechanism is ratable, Platts proposes publishing the loading program as consecutive three-day laycans covering the full deliverable calendar month, in line with the existing BFOET grades.

Cargo delivery laycans could be open nominated by eligible MOC participants and would be apportioned on a first-come, first-served basis.

All nominations would need to have a prior confirmation of a booking for an STS operation at Scapa Flow for the required dates from Orkney Islands Council Marine Services.

Nominations would need to be submitted no earlier than 9 am London time three publishing days and no later than 5 pm London time one publishing day ahead of the last day of the month, in line with the existing BFOET loading program schedule.

For example, for the March 2022 loading program, nominations would need to be submitted not prior to Jan. 26, 2022, and not later than Jan. 28, 2022.

Taking logistical considerations regarding STS operations at Scapa Flow into account, the number of available delivery slots will not typically exceed 20 in any given calendar month.

Platts currently assesses cargoes of WTI Midland on an FOB Scapa Flow basis.

This assessment is published as both an outright price and as a differential to Dated Brent for 600,000 barrel cargoes loading FOB from the STS area at Scapa Flow 10 days forward from date of publication to one month ahead.

The assessment reflects bids, offers and trades for WTI Midland FOB Scapa Flow, as well as DAP Rotterdam adjusted for freight.

All Platts STS offers in the Dated Brent process are currently made basis named vessel in order to ensure compatibility.

Platts is seeking additional feedback on when a vessel should be named for the purposes of inclusion in the WTI Midland FOB Scapa Flow loading program.

In assessing the value of WTI Midland on an FOB Scapa Flow basis, Platts considers bids and offers for the grade loading STS basis Scapa Flow.

Platts also considers bids and offers of WTI Midland on a Rotterdam delivered basis, which are converted back to Scapa Flow using the existing freight adjustment factor (FSFRM00).

This proposal note is being published alongside two additional proposal notes:

SUBSCRIBER NOTE: Platts proposes to use volume for CIF Rotterdam, FOB STS Scapa Flow crude oil

SUBSCRIBER NOTE: Platts proposes implementing 60% freight adjustment factor on WTI Midland FOB Scapa Flow crude oil assessment

Please send all comments to europe_crude@spglobal.com and pricegroup@spglobal.com by Feb. 12.

For written comments, please provide a clear indication if comments are not intended for publication by Platts for public viewing.