Trafigura, Vitol trade first LNG cargo on Platts JKM MOC
Swiss LNG traders Trafigura Pte and Vitol Asia traded an LNG cargo on the Platts JKM Market on Close assessment process in Singapore Thursday, marking the first time ever a physical spot cargo has changed hands in the transparent MOC process.
Following this transaction, S&P Global Platts assessed the JKM for H1 September delivery at the traded outright value of $10.40/MMBtu. The August JKM was also assessed at $10.40/MMBtu.
The cargo is for 3,300,000 MMBtu with a gross heating value of 1,040-1,150 Btu/SCF and a ship capacity 140,000-180,000 cu m.
Under the terms of the contract, Trafigura has the option to nominate a one day delivery window 30 days prior to the initial delivery window, and declare an alternative port 35 days prior to the delivery window subject to ship-shore compatibility.
The transaction follows Trafigura’s submission of the first firm and transparent bid in the Platts MOC assessment process June 16, and is a milestone for an industry that has traditionally relied on opaque, oil-linked, long-term supply contracts.
Trading houses Trafigura, Pavilion Gas and Vitol had completed the Asia JKM LNG physical and derivatives MOC review process on June 12. BP Singapore and Itochu Petroleum Singapore were also approved in the physical MOC review process subsequently.
Platts publishes firm bids, offers and interest to trade from approved participants in the MOC process.
A firm and transparent MOC process is a structured system designed to yield a price reflective of market values at the close of the trading day, and can inject greater robustness and transparency to a benchmark, which can be vital to support the development of a commodity and help stakeholders mitigate risks in a commoditizing marketplace.