Platts proposes amendment to CIF Morocco butane assessment net-forward methodology

Platts, part of S&P Global Commodity Insights, is proposing to change the way it assesses CIF Morocco butane cargoes (ABTMA00) to reflect a net-forward from the waterborne FOB USGC Butane assessment, effective April 24, 2023.

Platts proposes to change the calculation for its net-forward CIF Morocco butane cargoes assessment by applying the Platts daily freight assessment reflecting the cost of transporting a 44,000 mt LPG cargo from Houston to Mohammedia (LPHMA00) to the waterborne FOB USGC Butane assessment in $/mt (ABTNB00), plus a price normalization between the Houston and London Market on Close assessment process timestamps reflected by the change in front-month ICE Brent.

The assessment is currently calculated as a freight net-forward from the second month butane assessment at the Enterprise Mont Belvieu facility (AAWUF00). The proposed change to net-forward CIF Morocco butane cargo from the waterborne USGC Butane assessment aims to better reflect a substantial increase in observed FOB US Gulf Coast butane trading activity and export terminal capacity since 2016, according to US Energy Information Administration data.

The Houston-Mohammedia freight component is currently derived from the Houston-Flushing 44,000 mt freight assessment (AAXIQ00), adjusted to account for the difference in delivery location. There are no changes to the derivation of the Houston-Mohammedia freight component in the proposed methodology change.

The Butane CIF Morocco assessment will continue to reflect a specification in line with the Platts Mont Belvieu butane assessments. It reflects refrigerated cargoes with a minimum size of 44,000 mt for delivery 45-60 days from the date of publication, with value reflecting the mean of the delivery period, into Mohammedia, Morocco.

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