SUBSCRIBER NOTE: Platts proposes trade weighting in North American natural gas indices

On November 21, 2016, S&P Global Platts announced an agreement with Intercontinental Exchange to improve natural gas price transparency and bolster North America price benchmarks.

Per the agreement, Platts intends to incorporate trade data from Platts price reporters, the ICE Exchange platform, and the ICE eConfirm platform in its preliminary and final daily and monthly indices.

Platts is proposing to represent the trade data in its indices as described below.

In the proposals, there is a distinction between Platts locations and ICE locations.

After the transition period, ICE pricing data for ICE locations that match Platts locations will be discontinued, and only a Platts price will be published.

Platts will publish price data for ICE locations that do not match Platts locations when there are reported transactions.

1. Preliminary Daily Indices For Platts And ICE Locations: The only trade data used in these indices will be ICE Exchange trades from ICE. Both the buy and sell side of ICE Exchange trades will be counted in the indices, regardless of whether the counterparties are Platts price reporters.

2. Final Daily Indices For Platts Locations: The trade data used in these indices will be: a. Platts price reporter trades submitted via email or ICE eConfirm b. Non-Platts price reporter ICE Exchange trades from ICE

Both the buy and sell side of ICE Exchange trades will be counted in the indices, regardless of whether the counterparties are Platts price reporters. Price reporter ICE trades will be sourced directly from the price reporter trade data submitted via email or ICE eConfirm. The duplicate trade will be removed from the ICE trade data from ICE. The non-price reporter buy and sell side of ICE trades will be sourced anonymously from ICE.

For price reporter trades not done on ICE, only the buy or sell side reported by the price reporter will be counted. In addition, Platts will continue to screen for outlying data using existing mechanisms as well as verifying trade data that occurs outside of the transparent trading range observed on the ICE exchange.

3. Final Daily Indices For ICE Locations: The only trade data used in these indices will be ICE Exchange trades from ICE. Both the buy and sell side of ICE Exchange trades will be counted in the indices, regardless of whether the counterparties are Platts price reporters.

4. Preliminary Monthly Indices For Platts Locations: The trade data used in these indices will be: a. ICE Exchange trades from ICE b. Platts price reporter trades not done on ICE submitted via email or ICE eConfirm

Both the buy and sell side of ICE Exchange trades from ICE will be counted in the indices, regardless of whether the counterparties are Platts price reporters. ICE Exchange trades will be sourced from ICE since most price reporter trade data is not submitted until the last day of bidweek. The duplicate ICE trade will be removed from the price reporter data submitted via email or ICE eConfirm.

For price reporter trades not done on ICE, only the buy or sell side reported by the price reporter will be counted. In addition, Platts will continue to screen for outlying data using existing mechanisms as well as verifying trade data that occurs outside of the transparent trading range observed on the ICE exchange.

5. Preliminary Monthly Indices For ICE Locations: The only trade data used in these indices will be ICE Exchange trades from ICE. Both the buy and sell side of ICE Exchange trades will be counted in the indices, regardless of whether the counterparties are Platts price reporters.

6. Final Monthly Indices For Platts Locations: The trade data used in these indices would be: a. Platts price reporter trades submitted via email or ICE eConfirm b. Non-Platts price reporter ICE Exchange trades from ICE

Both the buy and sell side of ICE Exchange trades will be counted in the indices, regardless of whether the counterparties are Platts price reporters. Price reporter ICE trades will be sourced directly from the price reporter trade data submitted via email or ICE eConfirm. The duplicate trade will be removed from the ICE trade data from ICE. The non-price reporter buy and sell side of ICE trades will be sourced anonymously from ICE.

For price reporter trades not done on ICE, only the buy or sell side reported by the price reporter will be counted. In addition, Platts will continue to screen for outlying data using existing mechanisms as well as verifying trade data that occurs outside of the transparent trading range observed on the ICE exchange.

7. Final Monthly Indices For ICE Locations: The only trade data used in these indices will be ICE Exchange trades from ICE. Both buy and sell sides of ICE Exchange trades will be counted in the indices, regardless of whether the counterparties are Platts price reporters.

Platts previously advised that the transition period would conclude at the end of May. Platts is reviewing this timing and will provide an update in the near future.

Please send any comments to the proposals above to gas_survey_comments@platts.com and pricemethodology@spglobal.com by May 1.

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.