Platts clarifies guidelines for WIM LNG derivative MOC; to launch eWindow on May 7

S&P Global Platts is clarifying the guidelines for its Market on Close assessment process for WIM (West India Marker) LNG derivatives in Asia.

Additionally, Platts will launch the Platts Editorial Window, or eWindow, communication tool for the WIM derivatives MOC process on May 7, 2021.

Platts will publish bids, offers and interest to trade from approved participants in the WIM derivative MOC process in line with the following editorial standards and guidelines. For more information on the counterparty review process, please visit https://www.spglobal.com/platts/en/our-methodology/participation-review. Entities that wish to participate in the MOC should contact pricegroup@spglobal.com.

SUBMITTING BIDS, OFFERS AND INTENTIONS TO TRADE: Buyers and sellers must submit all outright, time spread and JKM/WIM spread bids and offers with complete information to Platts editors by phone, instant message or email before 4:10 pm Singapore time or 08:10:00 GMT. Platts expects participants to clearly state all the relevant information when submitting a bid or offer for publication, including price, contract period and volume. Platts may request further information from participants to ensure clarity. Buyers and sellers may withdraw their bids or offers at any time during the MOC process by communicating the same to Platts editors, so long as interest in trading against the published bid or offer has not already been received by Platts. Counterparties must clearly communicate their interest to trade a published bid or offer to Platts editors. Bids or offers that are traded in the MOC may be repeated at the same or a less competitive price.

TIMING AND INCREMENTS: Buyers and sellers may improve the price of their published bids and offers by a maximum of 5 cents/MMBtu every two minutes in the manual MOC process, and, when the eWindow communication tool is launched, may improve their published bids and offers by a maximum of 5 cents/MMBtu every 60 seconds. Participants may change prices by a minimum of 1 cent/MMBtu. Following any trade, there will be 60 seconds to rebid or reoffer. Price changes can be made up to 4:29 pm, followed by a one-minute freeze period where no price changes are able to be made to bids or offers. The MOC process will end at 4:30 pm Singapore time. A rebid or re-offer following a trade in the last minute prior to the close of the MOC process will trigger an extension period till 4:32 pm, in order to adequately test that bid or offer.

VOLUME: Market participants are able to bid or offer WIM derivatives at a minimum size of 25 lots (one lot is equivalent to 10,000 MMBtu), and multiples thereof, in the MOC process.

INTRADAY VALUES: Starting May 3, 2021, Platts will begin publishing intraday values for WIM derivatives time-stamped at 3 pm Singapore time. The intradays would reflect Platts assessment of WIM derivatives at the time of publication and would serve as the baseline for the day's final MOC assessment process. Platts may amend intraday values based on market conditions. Platts would publish bids and offers in the MOC process that start at a reasonable level relative to the published intraday values.

CREDIT AND TRADING TERMS: Transactions for LNG derivatives reported in the MOC are typically bilateral trades between counterparties, and should reflect their standard credit and trading terms. Subsequent to Platts publishing an expression of interest to trade a bid or offer, companies must communicate directly with each other to consummate the trade and confirm the same to Platts. Participants need to demonstrate ability to trade bilaterally on the MOC process. Counterparties are expected to perform on trades with counterparties in the MOC based on their typical bilateral trading and credit terms that have been applied and accepted by both counterparties in the open market. Any company submitting a bid or offer that can only be traded on a cleared basis, and which would been to be processed as a block cleared derivative before final confirmation, should state as such in their bid or offer at the time of submitting for publication.

WIM derivatives are financially settled in reference to the average of Platts physical WIM assessments over the period from the 16th calendar day of the month that is two months prior to the contract month, and ends on, and includes the 15th calendar day of the month prior to the contract month. For example, the July WIM derivative would settle on the average of the Platts July WIM published from May 16th to June 15th.

Platts has started publishing assessments for these derivatives for four forward contract months, two quarters, two seasons and three calendar years from May 3.

MAY 7 EWINDOW LAUNCH: Furthermore, participants in the Platts MOC assessment process will be able to submit WIM derivative bids and offers for publication directly through the eWindow communication tool or through an editor, who would then publish bids and offers using the communication tool starting from May 7.

From May 7, participants may improve the price of their published bids and offers by a minimum of 1 cent/MMBtu and a maximum of 5 cents/MMBtu every 60 seconds when reporting their indications directly through eWindow. For bids and offers reported to Platts editors, buyers and sellers may improve the price every 120 seconds, as per incrementability standards in the manual process.

The cutoff to register new price indications in the Platts derivatives MOC via the eWindow will be 16.09.59.59 Singapore time and final state will be 16:29:00:00. Buyers and sellers will also have maximum of 60 seconds to repeat a bid or offer following a trade.

A 60-second extension will be triggered in the event a repeat bid or offer is made in the last 60 seconds of the MOC via the eWindow.

For more information on Platts WIM LNG prices and how they are assessed, please visit: https://www.spglobal.com/platts/PlattsContent/_assets/_files/en/our-methodology/methodology-specifications/global_lng.pdf

Platts MOC guidelines are a key component of its assessment methodology, essential to an orderly and transparent price discovery process. They are aimed at bringing greater clarity and transparency to the assessment process used in assessments for these derivative WIM prices. Besides information published in the MOC, Platts editors also engage directly with producers, consumers, traders, brokers and shippers to gather price information.

Please send any comments, questions or feedback to LNGeditorialteam@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 comments not marked as confidential available upon request.