SUBSCRIBER NOTE: Platts announces methodology changes in final daily, monthly natural gas indices for Platts locations

On November 21, 2016 Platts announced an agreement with Intercontinental Exchange to improve natural gas price transparency and bolster North America price benchmarks. To that end, Platts proposed the use of additional trade data in final daily and monthly indices for Platts locations. The use of additional trade data would not take place until the end of the transition period of the Platts-ICE agreement.

The transition period will conclude at the end of May 2017. The new daily indices methodology will be launched on trade date May 31 for gas flow on June 1. The new monthly indices methodology will be launched on May 24, the first day of June bidweek.

Currently the only trade data used in the indices is trade data reported directly to Platts by price reporters. Platts proposed that after the transition period, Platts would use the following trade data in final indices for Platts locations:

1. All ICE exchange trades, reported anonymously to Platts by ICE 2. All matched eConfirm trades, reported anonymously to Platts by ICE 3. All other Platts price reporter trades

Based on consultation and review of market feedback, after the transition period Platts will incorporate a new methodology for final daily and monthly natural gas indices for Platts locations:

Platts will include all ICE Exchange trades and all other Platts price reporter trades in the final daily and monthly indices for Platts locations. These trades will be given equal weighting. Processes will be implemented to eliminate double counting of and verify accuracy of Platts price reporter ICE Exchange trades. The trade data will be screened for outliers and the indices will reflect a volume weighted average of all trades. When there are no transactions, Platts will make every effort to assess prices using other market information. This information includes, but is not limited to, historical daily prices, locational spreads to values at related liquid locations, non-Platts price reporter matched eConfirm trades, and ICE physical bids and offers.

When assessing a price Platts will denote the assessed price with an asterisk in price tables and will publish an assessment rationale describing how the assessed price was derived.

Based on consultation and review of market feedback, Platts will consider all available, verifiable data. Non-Platts price reporter matched eConfirm trades will be considered in the assessment process, but given the anonymous nature of those trades and the lack of trade exclusion comments, Platts may not be able to verify the data as reportable and may not include it in the index.

Please send any comments to the above to gas_survey_comments@platts.com and pricemethodology@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.