SUBSCRIBER NOTE: Platts to add new LNG freight routes costs, basis US Gulf

Platts is seeking feedback on a proposal to add new freight route costs, from the US Gulf, to destinations in the existing freight route cost table, published in Platts LNG Daily and on Natural Gas Alert page 1025 from 16 June, 2016.

The standard shipping assumptions will be aligned with existing methodology for freight route costs as follows: average speed 17 knots, vessel size 155,000-180,000 cu m, fillable volume of 98.5%, fuel oil consumption 100 mt/day of IFO380 CST and a boil-off gas factor of 0.12% when laden and 0.09% when on ballast. Heel will be calculated as 0.09% natural boil off while on ballast, multiplied by the number of days of the return leg plus 36 hours.

The freight route costs in LNG Daily will reflect the most economical route at the time of publication. Navigation options include the Suez Canal or the Cape of Good Hope and could eventually include the Panama Canal. As such Platts will database and intends to publish all these options in market data category 'LF'. Platts currently estimates the initial cost of transiting via the Panama Canal at $0.18/MMBtu.

Basis gas price for boil off and heel will be calculated using the delivered price of LNG or a relevant proxy where an assessment is not available. Cost of charter will be for the entire voyage, accounting for a round-trip and a three-day loading/delivery time, and dividing that cost by the total delivered cargo in MMBtu. The bunker fuel basis for these routes will be Houston.

These proposed new freight route costs will also inform calculations into the proposed FOB US Gulf Coast Marker (GCM) where netback calculations using the most economic route may be used as the basis for the assessment.

Please send all questions and feedback to wyatt.wong@platts.com and lng@platts.com and copy pricemethodology@platts.com by May 19. 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.