SUBSCRIBER NOTE: Platts to update Russia diesel, gasoil netback calculations

Platts will change the underlying assessments for its Russian diesel and gasoil export netbacks with effect from May 2, 2017. The change aims to bring the netbacks in line with the prevailing practice on the market and Russia's domestic diesel specification.

The decision follows a proposal note sent on January 16, 2017.

Platts will also change the freight for its netbacks derived from NWE assessments to bring them in line with the underlying CIF NWE diesel assessment.

For its Russian diesel and gasoil netbacks, Platts currently uses 0.1% and ULSD ARA barges, 0.1% Med CIF cargoes and 0.25% Singapore cargoes. The netbacks were launched when Russia's domestic diesel specifications as well as export flows were predominantly geared towards higher sulfur gasoil.

However, over the past few years, following a large-scale refinery modernization, Russian refineries have moved increasingly to lower sulfur product and in 2016 Russia adopted 10 ppm diesel as the obligatory standard for domestic product sales. While many refineries continue to produce and export gasoil, contract prices increasingly reference 10 ppm assessments in northwest Russia and the 500 ppm FOB Singapore assessment in the Far East.

Platts therefore will use for all of its current diesel and gasoil netback calculations in Northwest Europe the Platts CIF NWE 10 ppm diesel assessments (AAVBG00), and for all gasoil netbacks in the Far East the Platts FOB Singapore 500 ppm cargo (Gasoil 0.05% sulfur) assessment.

For its NWE netbacks, Platts also will use the Platts Baltic-UK Continent 30,000 mt clean freight rate instead of the UK Continent-UK Continent 22,000 clean freight rate as published in the Platts Clean Tankerwire.

Platts will continue using for the 0.1% Med CIF cargoes for its Mediterranean gasoil netbacks due to prevailing gasoil export flows in the region and will monitor the progress with the South diesel pipeline system which is expected to carry 10 ppm diesel. Platts will also monitor Russia's plans to concentrate its exports at its own ports with a view to eventually switching all of its diesel netbacks to Russian Baltic ports.

The decision refers to the following assessments and respective codes:

Netbacks with a change to CIF NWE 10 ppm and Baltic-UK Continent 30,000 mt clean freight rate:

- Moscow via St. Petersburg AAWRP00 - Moscow via Ventspils AAWRR00 - Yaroslavl via St. Petersburg AAXKP00 - Yaroslavl via Ventspils AAXKR00 - Syzran via Ventspils AAWJQ00 - Ufa via Ventspils AAWJT00 - Omsk via Ventspils AAWJO00 - Yaroslavl via Primorsk AAWJZ00 - NORSI via Primorsk AAWJX00 - Kirishi via Primorsk AAWJV00

Netbacks with a change to FOB Singapore 500 ppm cargo (Gasoil 0.05% sulfur):

- Komsomolsk via Nakhodka AAWRJ00 - Khabarovsk via Nakhodka AAWRD00



Please send any comments and queries to europe_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 those not marked as confidential available on request.