SUBSCRIBER NOTE: Platts amends MOC guidelines for JKM LNG assessments

S&P Global Platts is amending its guidelines for its Market on Close assessment process for LNG in Asia, including its benchmark JKM assessments, following a period of feedback and industry consultation.

The guidelines are aimed at bringing greater clarity and transparency to the assessment process for the benchmark JKM prices. Besides information published in the MOC, Platts editors also engage directly with producers, consumers, traders, brokers and shippers to gather price information.

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

Platts MOC guidelines are a key component of its assessment methodology, essential to an orderly and transparent price discovery process.

Intraday values: Starting June 12, 2018 Platts will begin publishing intraday values for JKM LNG time stamped at 3 pm Singapore time. The intradays would reflect Platts assessment of JKM LNG value 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.

Submitting Bids/Offers: Buyers and sellers must submit any bids and offers with complete information to Platts editors by phone, instant message or email before 16:00:00 Singapore time or 08:00:00 GMT. Buyers and sellers may withdraw their bids or offers at any time during the MOC by communicating the same to Platts editors. 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: Platts is amending the increment guidelines for participants in the JKM LNG MOC following feedback from market participants. Effective June 12, 2018, buyers and sellers will be able to improve the price of their published bids and offers by a maximum of 5 cents/MMBtu every two minutes. Participants may change prices by a minimum of 1 cent/MMBtu.

Platts had earlier set the incrementability at a maximum of 5 cents/MMBtu every minute in a subscriber note published March 27 https://www.platts.com/subscriber-notes-details/26923541. No price changes will be allowed in the final minute of the MOC. Bids and offers remain firm and open to the market until 16:30:00 Singapore time or 08:30:00 GMT, unless withdrawn. Bids and offers that are repeated after a trade in the final minute of the MOC will trigger an extension and remain firm and open until 16:31:00 SGT, or 08:31:00 GMT.

Bids/Offers format: Platts expects participants to clearly state all the relevant information when submitting a bid or offer for publication. Platts may request further information from participants to ensure clarity.

Required information in a published bid or offer: Terms of Delivery (FOB or DES), loading (FOB)/discharge (DES) location, laycan, quantity, price, quality, ship criteria and nomination procedures. Participants must also clearly state any optionality related to the bid/offer parameters such as volume, location or quality at the time of submission, though Platts will review these for reasonability prior to publication.

Platts JKM LNG assessments reflect 1030-1130 Btu/scf calorific cargoes of 135,000-175,000 cubic meters delivered into ports in Japan, South Korea, mainland China and Taiwan.

Credit and trading terms: Transactions reported in the MOC are bilateral trades between counterparties and should reflect their standard bilateral 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.

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.

Trade performance: Platts expects trades reported in the MOC to be physically performed and for parties to be reasonable when circumstances require a party to substitute ship or receiving terminal. Participants should not unreasonably withhold substitutions or hamper the established delivery process. From time to time, Platts may review performance of trades reporting in the MOC to maintain the integrity of the assessment process.

Platts not only focuses on the performance of the transaction at the time of trade, but also on any significant issues stemming from such trades, including logistics and eventual delivery of the product. Platts therefore may request documentary material to determine performance and validity.

For more information on Platts JKM LNG benchmark prices and how they are assessed, please visit: http://www.platts.com/IM.Platts.Content/MethodologyReferences/MethodologySpec s/lngmethodology.pdf

Information on LNG MOC bids, offers and trades can be seen on lng-https://lng-moc.plattslabs.io/ and Page 700 of Platts Natural Gas Alert(NGA). They can be submitted to Platts editors via platts_lng_moc@spglobal.com, ICE Chat: Platts_asia_lng, or +65 6530 6417.

Please send any feedback or 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.