Platts launches global LNG arbitrage matrix July 16

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

Platts informed the market of the launch of the arbitrage matrix June 19 via a subscriber note available here(opens in a new tab), having considered the feedback from the market following the proposal May 21 via a subscriber note available here(opens in a new tab).

The matrix provides 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 compare the potential netbacks 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 is a total of 13 assessments:

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

The matrix reflects 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 (opens in a new tab)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), represents 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.

If the cargo was 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.

If the cargo was 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 appear on LNG Daily and LNG Price Assessments table. They are published in $/MMBtu and follow the Singapore and London publishing schedule.

The assessments are published in Platts LNG Daily and daily fixed page LNG2499.

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