Platts proposes DES East Mediterranean LNG cargo assessment

Platts, part of S&P Global Commodity Insights, is proposing to launch a DES East Mediterranean Marker (EMM) price assessment reflecting the value of spot LNG cargoes delivered into East Mediterranean markets, effective Dec. 18, 2023.

Platts would publish EMM as an outright price in $/MMBtu and as a differential to Platts DES Northwest Europe and as a differential to Dutch TTF.

East Mediterranean LNG imports have grown significantly over the last two years and are expected to grow further as new infrastructure comes online, according to S&P Global Commodity Insights shipping data. Additionally, market participants have expressed a desire for pricing transparency into a region expected to grow in spot trading liquidity.

BASIS AND LOCATION: The assessments would reflect a minimum cargo size of 135,000 cu m delivered ex ship (DES) into the Turkish ports of Aliaga, Dortyol, Etki, Marmara Ereglisi and Saros. Prices of LNG spot cargoes delivered into ports in Croatia, Italy or Greece with the same minimum cargo size may be considered and normalized in EMM.

TIMING: Platts would assess cargoes for delivery in the second, third, fourth and fifth half-month cycles forward from the date of publication. The East Med monthly assessment would be based on the average of the two DES East Mediterranean LNG half-months that match the NWE delivery month period.

Bids and offers provided for publication in the Market on Close assessment process would typically reflect delivery into ports in Turkey with buyer's option to substitute the discharge port. Platts is seeking feedback from the market via this subscriber note on which ports to reflect as the basis disports in the assessment.

Bids must be expressed with a specific base discharge port. The location chosen would set the conditions for any potential counterparty considering trading. For transactions concluded and reported through the MOC process, buyers should nominate a base discharge port at least 30 days before the first day of the traded delivery window, or at the time of trade confirmation for a prompter delivery window.

Buyers would retain the option to substitute discharge port within the basis disports in East Mediterranean up to 15 days before the first day of the traded delivery window, subject to ship shore compatibility study (SSCS). Bids for cargoes for delivery at or less than 15 days from the date of assessment would have to state the final discharge port.

DELIVERY WINDOW: The delivery period reflected by bids and offers would typically be three days long, with the buyer's option to narrow to a one-day delivery window latest by 20 days before the first day of the traded delivery window.

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

QUALITY: Market participants should clearly state GHV specifications in bids and offers submitted for publication. Platts DES East Mediterranean assessments would reflect cargoes with a GHV of 1,010-1,130 Btu/Scf. Platts may normalize for quality specifications with different ranges.

QUANTITY: DES East Mediterranean assessments would reflect quantity of 3.3 TBtu. Under this proposal, this volume would be subject to +/-3% operational tolerance, at the seller's option.

For cargoes offered or bid for in a volume range (e.g. 3.1-3.4 TBtu +/-3%), the specific volume (e.g. 3.3 TBtu +/-3%) would have to be declared by the seller at least 30 days prior to delivery. The quantity range stated in offers published during the MOC process would be no greater than 0.3 TBtu. An example of an offer with a 0.3 TBtu quantity range would be 3.1-3.4 TBtu, with an operational tolerance of +/- 3% at the sellers option.

LNG VESSEL: Platts standards would reflect LNG vessel size range of 135,000-175,000 cu m. Sellers would nominate an LNG ship either up to 15 days prior to the first day of the traded delivery window, or at the time of trade confirmation for a prompter delivery window.

For offers of cargoes for delivery at or less than 15 days from the date of assessment, sellers should state the LNG vessel explicitly.

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 process should reflect these standards, which Platts understands to be broadly typical in the spot market for cargoes delivered into East Mediterranean.

Platts may publish bids, offers and trades for spot 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.

Please send all feedback, comments and questions to LNGeditorialteam@spglobal.com and pricegroup@spglobal.com by Nov. 10, 2023.

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 make comments not marked as confidential available upon request.