Platts to launch global LNG arbitrage matrix July 16

Platts, part of S&P Global Commodity Insights, will launch a global LNG arbitrage matrix, effective July 16.

The matrix was first proposed May 21 in a subscriber note here: https://www.spglobal.com/commodityinsights/en/our-methodology/subscriber-notes/052124-platts-proposes-to-launch-global-lng-arbitrage-matrix

The matrix will provide a daily analysis of the potential to optimize the sale of a cargo of LNG based on that day's price assessments by Platts.

The assessments will compare the potential netback achievable for shipping an LNG cargo to different destinations from various supply basins, expressed as a differential to the appropriate JKM derivative assessment in $/MMBtu.

As part of this matrix, there will be a total of 13 assessments:

• East-West arbitrage: five assessments comparing the potential netback achievable for shipping an LNG cargo from West Africa, Middle East or the US to North Asia and Northwest Europe.
• North-South Asia arbitrage: five assessments comparing the potential netback achievable for shipping an LNG cargo from West Africa, Middle East or the US to North Asia and South Asia.
• South Asia-Atlantic arbitrage: four assessments comparing the potential netback achievable for shipping an LNG cargo from West Africa, Middle East or the US to South Asia and Northwest Europe.

The matrix will reflect a cargo of LNG being shipped from the supply basin in the middle of the next half-month cycle from the assessment date and priced at the DES assessment for the appropriate arrival half-month period at the destination, based on the voyage time to the destination.

The voyage time assumption from the supply basin to the destination is based on the best-case voyage time in the table "Voyage times in days" of the Specifications Guide Global LNG (https://www.spglobal.com/commodityinsights/PlattsContent/_assets/_files/en/our-methodology/methodology-specifications/global_lng.pdf) plus a couple of days for logistical delays.

The corresponding freight is assessed and published daily.

For example, the symbol LANSE00, referring to the assessment of the LNG Arbitrage North Asia via Cape vs Atlantic (USA loading), would refer to the netback difference between selling a US-loading LNG cargo to North Asia via the Cape of Good Hope and selling the same cargo to Northwest Europe.

On any assessment date in H2 April, the cargo in question would be assumed to ship from the US in the middle of H1 May.

When the cargo is sold to North Asia, taking into account the voyage time from the US to North Asia via the Cape of Good Hope, the cargo would be assumed to arrive in North Asia in H2 June.

When the cargo is sold to Northwest Europe, taking into account the voyage time from the US to Northwest Europe, the cargo would be assumed to arrive in Northwest Europe in H2 May.

The Platts LNG Arbitrage North Asia via Cape vs Atlantic (USA loading) on April 25 would be calculated as follows, reflecting a negative arbitrage spread:

The assessments will appear on LNG Daily and LNG Price Assessments table. It will be published in $/MMBtu and follow the Singapore and London publishing schedule.

Please send all feedback, comments, and questions to LNGeditorialteam@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.