SUBSCRIBER NOTE: Platts defines DES West India standard terms for LNG MOC process

Following a period of feedback and industry consultation, S&P Global Platts has defined the standard terms reflected in its DES West India benchmark, reflected in bids, offers and trades published as part of the Market on Close assessment process, with effect from September 02, 2019.

These standard terms apply to bids, offers and trades published by Platts in the Market on Close price assessment process. They do not change the specifications reflected in the DES West India assessments, which remain as published in Platts methodology & specification guide, available online here: https://www.spglobal.com/platts/plattscontent/_assets/_files/en/our-methodology/methodology-specifications/lngmethodology.pdf

STANDARD TERMS: Unless stated otherwise by a counterparty at the time of providing data for publication, the bids and offers provided for publication in the MOC will reflect these following standards, which Platts understands to be broadly typical in the spot market for cargoes delivered into India. Platts may publish bids, offers and trades for LNG cargoes that carry different terms and conditions, but may normalize these when considered in final, published assessments. Participants in the MOC process should clearly state in submitted bids or offers terms that differ from these standards.

DELIVERY WINDOW: The delivery period reflected by bids and offers will typically be three to five days long, with the buyer to narrow to a one- or two-day delivery window 30 days before the first day of the traded delivery window.

DISCHARGE LOCATION: Bids and offers typically reflect delivery into West Indian ports, with buyer's option to nominate the discharge port. Bids will need to be expressed with a specific discharge basis (or base) port. The location chosen sets the conditions for any potential counterparty considering trading. For transactions concluded and reported through the MOC process, buyers should nominate delivery port at least 30 days before the first day of the traded delivery window, or at the time of trade confirmation for more prompt delivery windows.

Buyers will retain the option to substitute delivery port within ports on the West Coast of India up to 15 days before the first day of the traded delivery window, subject to ship shore compatibility study (SSCS). Substitution of delivery locations to ports in East coast India, Dubai and Kuwait are subject to normalization.

LOADING LOCATION: Platts will reflect bids, offers and trades where sellers have the option to nominate the loading port up to 30 days prior to the first day of the traded delivery window and may be substituted up to 15 days prior to the first day of the traded delivery window subject to Gross Heating Value, or GHV, quality range reported in the trade. For cargoes for delivery at or less than 30 days from the date of assessment, sellers will have to state the load port explicitly.

QUALITY: Market participants should clearly state GHV specifications in bids and offers submitted for publication. Platts DES West India assessments reflect cargoes with a GHV of 1000-1150 Btu/Scf. Platts may normalize for quality specifications with different ranges.

QUANTITY: DES West India assessments will reflect quantity of 3.2 TBtu. This volume will be subject to +/-5% operational tolerance, at the seller's option. For cargoes offered or bid for in a volume range (i.e. 3.1-3.4 TBtu +/-5%), the specific volume (i.e. 3.3 TBtu +/-5%) should be declared by the seller 30 days prior to delivery, and this declaration deadline should be stated in the offer or bid.

LNG VESSEL: Platts standards will continue to reflect published DES West India LNG vessel size range of 135,000-175,000 cu m. Sellers should nominate an LNG ship either 30 days prior to the first day of the traded delivery window, or at the time of trade confirmation for more prompt delivery window. For cargoes for delivery at or less than 30 days from the date of assessment, sellers should state the LNG vessel explicitly. Sellers may substitute delivery vessel up to 15 days prior to the first day of the traded delivery window, subject to SSCS.

Platts expects parties to be reasonable when exceptional circumstances require sellers to substitute vessels or buyers to substitute terminals beyond typical standards stated in Platts MOC guidelines. Companies must promptly communicate to their counterparties when such a substitution is required. And buyers or sellers should not unreasonably withhold substitutions or hamper the established delivery process.

Please send all feedback, comments and questions 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.