SUBSCRIBER NOTE: Platts proposes LNG Ballast Rate assessments, freight updates

S&P Global Platts is extending the consultation period on a proposal to launch two new Ballast Rate assessments to value the return leg of journeys reflected in its current Asia Pacific and Atlantic Day Rate LNG spot freight assessments. Additionally, Platts is seeking feedback on proposals to incorporate these new assessments and update several other components of its LNG netbacks and freight cost calculations, published in Platts LNG Daily and on Natural Gas Alert page 1025. These proposed new assessments, and proposed amended freight calculations, would take effect from July 1, 2018. PROPOSED NEW ASSESSMENTS: Platts proposes to launch two new Ballast Rate assessments, one for the Asia Pacific basin and one for the Atlantic basin. Each Ballast Rate assessment would be published with the relevant Day Rate assessment and be expressed as percentage of the Day Rate assessment for the relevant basin. These planned new assessments reflect the value typically charged by ship-owners to charterers to position vessels for a spot voyage. Ballast Rates, sometimes known as a "ballast bonus," would be assessed using all available data from the spot markets, including lump sum amounts. BALLAST RATES IN FREIGHT CALCULATIONS: Platts proposes to incorporate these new Ballast Rate assessments into its calculations for the return legs of freight route costs. The rates would replace the current practice of assuming round-trip economics at 100% of Day Rates for all voyages. BOIL-OFF CALCULATION UPDATE: At the same time Platts proposes to amend the basis of the boil-off calculation reflected in freight route costs. Under its revised approach, Platts would reflect the loaded volume of LNG in calculations, rather than the vessel's total capacity. Platts would also reflect a reduction in boil-off while in port. Currently the boil-off calculation is based on a 100% of a vessel capacity at 165,000 cu m. Platts proposes to reflect loaded volume only, or 98.5% of vessel capacity, and falls to 25% while in port, in its freight calculations. UPDATED CONVERSION FACTOR: Platts proposes to use a factor of 23.0 in its conversion of cubic meters to MMBtu for loaded LNG in its freight assessments and calculations. Platts currently uses a factor of 23.9, which reflects only rich quality LNG. This would ensure consistency with Platts' JKM physical LNG cargo assessment methodology, which was updated on November 1, 2017 to reflect cargoes with a calorific value within a range of 1,030-1,130 Btu/scf. NEW PORT COSTS IN NETBACKS: Platts proposes to add port costs to the total cost calculation for its netbacks. Platts is seeking feedback not only on their inclusion, but also on our current valuation of port costs, as shown in the table below: Load port costs: Discharge port costs: Ras Laffan $120,000 Futtsu $120,000 Dampier $200,000 Guangdong $125,000 Point Fortin $60,000 Dahej $40,000 Bonny $900,000 Huelva $240,000 Arzew $160,000 Zeebrugge $130,000 Zeebrugge $130,000 Everett $300,000 Pampa Melchorita $200,000 Bahia Blanca $0 Sakhalin $70,000 Salvador Bahia $140,000 Huelva $240,000 Ain Sukhna $225,000 Hammerfest $200,000 Sabine Pass $190,000 Platts invites all questions and feedback to lng@spglobal.com and pricegroup@spglobal.com by May 31, 2018. 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.