SUBSCRIBER NOTE: Platts clarifies guidelines for JKM derivative MOC

Singapore (Platts)--26Jun2018/652 am EDT/1052 GMT S&P Global Platts is clarifying its guidelines for its Market on Close assessment process for JKM LNG derivatives in Asia.

Platts will publish bids, offers and interest to trade from approved participants in the JKM derivative MOC process in 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.

SUBMITTING BIDS, OFFERS AND INTENTIONS TO TRADE: 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. Platts expects participants to clearly state all the relevant information when submitting a bid or offer for publication, including price, contract period and volume. Platts may request further information from participants to ensure clarity. Buyers and sellers may withdraw their bids or offers at any time during the MOC by communicating the same to Platts editors, so long as interest in trading against the published bid or offer has not already been received by Platts. 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: Buyers and sellers may 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 requires participants to bid or offer at a minimum lot size of 5 lots. Derivatives typically trade in lot sizes of 10,000 MMBtu.

VOLUME: Platts requires participants to bid or offer LNG derivatives at a minimum size of 50,000 MMBtu, and multiples thereof.

INTRADAY VALUES: Starting June 27, 2018 Platts will begin publishing intraday values for JKM derivatives timestamped at 3 pm Singapore time. The intradays would reflect Platts assessment of JKM derivatives 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.

CREDIT AND TRADING TERMS: Transactions for LNG derivatives reported in the MOC are typically bilateral trades between counterparties, and should reflect their standard 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. Participants need to demonstrate ability to trade bilaterally on the MOC process. 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. Any company submitting a bid or offer that can only be traded on a cleared basis, and which would been to be processed as a block cleared derivative before final confirmation, should state as such in their bid or offer at the time of submitting for publication.

The JKM derivative is a monthly contract based on the Platts daily assessment price for the JKM. Platts publishes assessments for these derivatives for three forward contract months, two quarters and one calendar year. JKM derivatives are financially settled in reference to the average of the published JKM over the period from the 16th calendar day of the month that is two months prior to the contract month, and ends on, and includes the 15th calendar day of the month prior to the contract month. For example, the September JKM derivative would settle on the average of the Platts September JKM published from July 16th to August 15th.

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

Platts MOC guidelines are a key component of its assessment methodology, essential to an orderly and transparent price discovery process. They are aimed at bringing greater clarity and transparency to the assessment process used in assessments for these derivative JKM prices. Besides information published in the MOC, Platts editors also engage directly with producers, consumers, traders, brokers and shippers to gather price information.

Information on LNG MOC bids, offers and trades can be seen on 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 comments, questions or feedback 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.