Platts refines JKM specifications, Asia LNG MOC process guidelines

Following a period of feedback and industry consultation, S&P Global Platts has refined the definition of standard cargo quantity reflected in its Asia LNG 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.

Platts first proposed the refinements in a subscriber note available here: https://www.spglobal.com/platts/en/our-methodology/subscriber-notes/042219-platts-proposes-to-refine-jkm-specifications-asia-lng-moc-process-guidelines

QUANTITY: The standard cargo quantity reflected in Platts JKM will 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 will consider for publication bids, offers and trades for other cargo sizes, but may normalize these for assessment purposes to the standard value of 3.4 TBtu.

Offers with cargo volumes submitted in a range are subject to review prior to publishing and are 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 will only reflect bids that explicitly state a base discharge port. Buyers retain the option to substitute the delivery port up to 30 days before the first day of the delivery window, as per Platts existing guidelines.

Buyers will 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 existing guidelines.

LOADING PORT: Offers for cargoes for delivery at or less than 45 days from the date of assessment that do not explicitly state a base loading port may be subject to normalization. For cargoes for delivery at or less than 30 days from the date of assessment, Platts will continue to only publish offers that state the loading port explicitly.

Sellers 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 existing guidelines.

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

OPERATIONAL TOLERANCE: Platts clarifies 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 refinements and clarifications of current standards apply to bids, offers and trades reported to 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. 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.