Platts clarifies prioritization, determination of floating prices in LNG MOC

S&P Global Platts wishes to clarify how floating price bids, offers and trades are prioritized, determined, and considered in the LNG Market on Close (MOC) assessment process.

In the event of an observed conflict between outright values and floating price information, outright values prevail in Platts final published assessments.

For floating price bids, offers and trades Platts establishes the hedgable, outright value of floating price indications by applying them to the observable, prevailing value of underlying relevant derivatives instruments.

Consequently, Platts wishes to clarify that it prioritizes physical floating price bids, offers and trades based on the relative transparency of the bids, offers and trades reported to Platts on these derivatives instruments.

Should derivative bids, offers and trades be reported transparently through the MOC for an instrument, Platts establishes a value for the derivative instrument that would be given priority in the physical MOC assessment process when compared with values resulting from derivative bid, offer and trade information that lacks equivalent transparency, for example anonymous information, or bids or offers that do not demonstrate value incrementally.

When determining the flat price equivalent of a floating price trade Platts considers the value of the derivative at the time of trade. For a bid or an offer left standing up until the market close, Platts would use the derivative value at the close of the MOC to convert the floating price to a flat price equivalent.

Platts wishes to also remind market participants that firm bids and offers that are available to the entire market take precedence over trades that have been concluded earlier in the assessment process when establishing the value of the market. When determining a final market assessment, Platts gives the greatest priority to fully verifiable and transparent market information.

Please send all feedback, comments and questions to lngeditorialteam@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.