Platts proposes to refine JKM specifications, Asia LNG MOC process guidelines

S&P Global Platts is proposing to refine the definition of standard cargo quantity reflected in its JKM benchmark price assessment, as well as its guidelines around the base loading port reflected in offers and base discharge port reflected in bids published as part of the Market on Close assessment process, with effect from June 3, 2019.

QUANTITY: Under this proposal, the standard cargo quantity reflected in Platts JKM would be defined as 3.4 TBtu, which is the mid-point of the current standard range reflected of 3.2 TBtu to 3.6 TBtu.

Platts would continue to publish bids, offers and trades for other cargo sizes, but would normalize where applicable back to a base of 3.4 TBtu.

Platts wishes to clarify that offers with cargo volumes submitted in a range are subject to review prior to publishing and may be subject to normalization when considered in the final assessment price. For offers submitted in a volume range sellers must state the nomination deadline by which buyers are informed of the final cargo volume (exclusive of operational tolerance).

BASE DISCHARGE PORT: Platts proposes to only reflect bids that explicitly state a base discharge port. Buyers would retain the option to substitute the delivery port up to 30 days before the first day of the delivery window, as per Platts standards.

Buyers would also retain the option to substitute the delivery port within the same country up to 20 days before the first day of the delivery window, as per Platts standards.

LOADING PORT: Platts also proposes to only reflect offers that explicitly state a base loading port. Sellers would retain the option to substitute the loading port up to 30 days prior to the first day of the traded delivery window subject to the Gross Heating Value (GHV) quality range reported in the trade, as per Platts standards.

Platts expects sellers to be reasonable when substituting a loading port. The substitute port should be commensurate to the traded quality specifications and not expose the buyer to accept cargo qualities considered atypical in the destination market.

OPERATIONAL TOLERANCE: Platts wishes to clarify that LNG cargoes with an operational tolerance of +/-5% at the seller’s option are reflected in the JKM assessment. Platts will only publish bids whose operational tolerance is +/-5% at the seller’s option.

These proposed refinements and clarifications of current standards apply to bids, offers and trades reported to S&P Global Platts in the MOC assessment process.

Platts full methodology & specification guide is available online here: https://www.spglobal.com/platts/en/our-methodology/methodology-specifications

Please send all feedback, comments and questions to platts_lng_moc@spglobal.com and pricegroup@spglobal.com by May 8, 2019. 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.