Normalization of high ethane offers in Platts JKM MOC

S&P Global Platts would like to clarify that its JKM LNG assessment reflects standard market norms for ethane levels. Bids, offers and trades published in the Platts Market on Close assessment process that reflect cargoes with high ethane levels may be normalized back to the standard for assessment purposes.

The Asia LNG market has in the past several months seen an increase in supplies from new LNG projects that have higher ethane levels than deemed acceptable by some end-users in Japan, South Korea, Taiwan or China (JKTC). These cargoes are typically seen traded at a discount to standard cargoes.

Sellers wishing to supply high ethane cargoes against trades reported through the MOC should state in their offers the maximum level of ethane, and these offers may be normalized to the standard for assessment purposes. Normalizations are based on market information available through the assessment period.

Offers that do not state a maximum ethane level are considered equivalent to high ethane offers and are normalized equivalent to the highest ethane LNG cargoes in the market.

Platts understands that cargoes with ethane levels up to 11%/mol are considered standard in the broader market.

Separately, Platts is currently seeking feedback on a proposal to define the maximum total sulfur and ethane content reflected in its benchmark JKM LNG price assessments, with effect from October 1, 2019.

The subscriber note, published on July 30, 2019 can be found here: https://www.spglobal.com/platts/en/our-methodology/subscriber-notes/073019-platts-proposes-to-define-maximum-total-sulfur-and-ethane-content-in-jkm-lng-specification.

Under this proposal, the maximum total sulfur content and ethane content reflected in the Platts JKM specification would be defined as 5 mg/Nm3 and 10%/mol, respectively.

Please send all feedback and comments 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.