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

Following market consultations, Platts has decided to add new freight route costs from the US Gulf to destinations on the existing freight route cost table currently published in Platts LNG Daily and on Natural Gas Alert page 1025 from June 16, 2016.

The standard shipping assumptions remain as previously proposed and aligned with existing methodology for freight route costs. They are 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 will eventually include the Panama Canal. As such Platts will database and intends to publish all these options in the market data category "LF." Platts currently estimates the cost of transiting via the Panama Canal to be $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. 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.