SUBSCRIBER NOTE: Platts to launch FOB USGC LSR naphtha assessment

Following a period of industry feedback that ended May 30, Platts confirms it will introduce a light straight run naphtha assessment for parcels loading at US Gulf Coast terminals on an FOB basis effective July 1, 2014.

Significant growth in condensate production, a result of liquids-rich gas drilling, has shifted the US from a net importer to a net exporter of naphtha, and light straight run naphtha exports are expected to increase substantially going forward as rising US supplies will continue to overwhelm demand.

The assessment will be published as an outright price, and as a differential to the Platts non-Targa Mont Belvieu natural gasoline corresponding forward value.

The assessment will reflect the value of 50,000-barrel parcels loading 10-30 days forward from the date of publication.

Other trade sizes and quality may be considered for the assessment, normalized for size and quality.

Specifically, Platts will use Platts non-Targa Mont Belvieu natural gasoline Month 1 and Month 2 assessments to derive a physical market structure, which will then be applied to the Platts non-Targa Mont Belvieu natural gasoline pipeline assessment to draw a 20-day forward value.

The specifications would be maximum 83 API gravity, maximum 250 ppm sulfur, 13 RVP, minimum 65 paraffin content, minimum color of 20, maximum 50 ppm oxygenates, maximum 10 ppb mercury, maximum 50 ppm lead and maximum 10 ppm H2S. The location of the assessment would be typical terminals in the US Gulf Coast.

Platts will use a conversion factor of 4.01 gallon/mt to convert between US dollars per metric ton and cents per gallon.

In its assessment process, Platts will gather bids, offers and transactional information for the FOB USGC light straight run naphtha market and will normalize these inputs to 2:15 pm Houston time (1915 GMT).

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.

Please email additional comments and questions to americas_products@platts.com with a cc to pricegroup@platts.com.