SUBSCRIBER NOTE: Platts proposes several changes to Asia LPG assessments

S&P Global Platts is proposing to rename some of its Asia refrigerated propane and butane assessments, and to reflect new specifications for all its Asia refrigerated LPG assessments.

Platts is also proposing to redefine the basis reflected in the differential assessments in Asia and the Middle East. As a result of the change, Platts proposes to discontinue its Asia Contract Price strip assessments and two Middle East differential assessments.

All the proposed changes to the assessments will start from January 2, 2020.

The changes proposed by Platts are in response to shifts in demand and supply fundamentals in the North Asian LPG market over the last few years.

In particular, the rise of the US as a significant exporter to Asia has altered the region's LPG trade flow structure. Last year, the US accounted for around 63%, equivalent to 6.7 million mt, of Japan's LPG imports, and for almost 80%, or about 4.5 million mt, of South Korea's imports.

CFR NORTH ASIA ASSESSMENTS: Platts is proposing to rename the current CFR Japan refrigerated propane and butane cargo assessments as CFR North Asia propane and CFR North Asia butane refrigerated assessments, respectively.

The renamed CFR North Asia assessments, which will carry the same price symbol codes for the current CFR Japan assessments, will reflect deliveries into both Japan and South Korea.

Platts' current CFR South Korea propane and butane differential assessments against the Saudi CP strip will be discontinued as a result of the change.

Platts will continue to publish three forward half-month cycles for the North Asia LPG benchmark assessments.

DISCONTINUATION OF NORTH ASIA ZONE ASSESSMENTS: Platts will discontinue its CFR North Asia Zone assessments for propane and butane, which reflect the average value of CFR Japan and CFR South China assessments, due to the change in the naming convention.

SINGAPORE-JAPAN 11:11: Platts is proposing to remove the term Singapore-Japan in reference to its spot 11:11 refrigerated LPG cargo assessments, and to name the assessments as CFR North Asia 11:11. These assessments will continue to reflect the value of cargoes delivered to main ports in North Asia.

There will be no changes to the names of Platts Asian CFR and FOB pressurized LPG assessments.

NEW SPECIFICATIONS: Platts is proposing to reflect the following specifications for its CFR North Asia, CFR South China and CFR Taiwan refrigerated LPG assessments in response to regional buyers' requirements and evolving supply into Asia.

Propane

Property Specifications Ethane 2.0 Liq. Vol % max Propane 90.0 Liq. Vol.% min. Butanes & Heavier 4 Liq. Vol. % max. Propylene 5.0 Liq. Vol.% max. Vapor Pressure, psig at 100F 208 max Volatile Residue: Temperature @ 95% evaporation -37F max Residue on evaporation of 100 ml 0.05 ml max Oil Stain Observation Pass Corrosion, Copper Strip No. 1 Total Sulfur 30 ppm wt. max. Water Content No Free Water Hydrogen Sulfide 5.0 max vol%

Butane

Propane & Lighter 2 max. Vol.% Isobutane 8 min, 29 max. Vol. % Normal Butane 68 min, 92 max. Vol.% Pentanes & Heavier 1.5 Liq. Vol. % max. Hexanes & Heavier 0.050 Liq. Vol. % max. Total Olefins 0.35 Liq. Vol. % max. Butadiene 0.01 Liq. Vol. % max. Total Oxygenates 50 ppm wt. max. Methanol 50 ppm wt. max. IPA & Heavier Alcohols 5 ppm wt. max. MTBE & Other Ethers 2 ppm wt. max. Other Oxygenates 5 ppm wt. max. Total Sulfur 140 ppm wt. max. Water Content No Free Water Fluoride 1 ppm wt. max. Vapor Pressure at 100F 70 psig max. Volatile Residue: Temperature @ 95% evaporation 36F max Corrosion, Copper Strip No. 1

Platts Asia CFR and FOB pressurized LPG assessments, as well as its Arab Gulf refrigerated LPG assessments will not be impacted by the proposed changes and will continue to reflect current specifications after January 2, 2020.

Currently, Platts Asia and Middle East propane assessments reflect specifications that conform to typical specifications issued by Saudi Aramco, including: minimum 95% propane content, maximum 4% butane content and maximum 0.1% olefin content.

Butane specifications reflected in Platts assessments conform to typical specifications issued by Aramco, including: maximum 2% propane content, maximum 29% isobutane content, minimum 68% normal butane content and maximum 0.1% olefin content.

REDEFINITION OF SAUDI CP STRIP VALUE: Platts is proposing to redefine the strip value of the Saudi CP to reflect the month ahead derivative contract from the current 20-40 days forward calculation, in line with market practice of pricing cargoes loading 20-40 days forward against the Month 1 CP.

FOB AG LPG: With this change, Platts proposes to discontinue its propane and butane differential assessments for spot cargoes loading 20-40 days forward in the Middle East against the Month 1 CP, and will continue to publish differentials against the CP strip, which will reflect the Month 1 CP derivative.

The outright FOB AG price for propane and butane will reflect the sum of the cash differential and the strip, which is the Month 1 CP derivative.

CFR ASIA LPG DIFFERENTIALS: With the redefinition of Saudi CP strip value to reflect Month 1 CP, the basis of the propane and butane differential assessments for Japan (which will be renamed to North Asia), South China and Taiwan will be changed to the Month 1 CP. With this amendment, Platts proposes to discontinue its propane and butane CP strip assessments for Japan, Korea, China and Taiwan.

The full list of changes to Platts' existing assessments can be found here: http://plts.co/GJ9s30ptji1 Please send all further comments, feedback and questions to asia_products@spglobal.com and pricegroup@spglobal.com by October 31, 2019.

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.