Methodology and specifications guide

ARGUS international LPG

Contents:
Methodology overview 2
Argus International LPG report 6
International comparisons 6
Naphtha6
LPG freight assessments 6
Northwest Europe and Mediterranean 7
FSU9
International swaps prices 9
Middle East and Asia-Pacific averages 10
Asia-Pacific 11
China wholesale propane/butane mix 17
Africa LPG indexes 17
Americas 18
LNG assessments 18

Updated: November 2019

The most up-to-date Argus International LPG methodology is available on www.argusmedia.com

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Methodology and specifications guide November 2019

Methodology overview Market data usage

In each market, Argus uses the methodological approach deemed
Methodology rationale to be the most reliable and representative for that market. Argus will
Argus strives to construct methodologies that reflect the way the utilise various types of market data in its methodologies, to include:
market trades. Argus aims to produce price assessments that are
reliable indicators of commodity market values, free from distortion • Transactions
and representative of spot market values. As a result, the specific • Bids and offers
currencies, volume units, locations and other particulars of an as- • Other market information, to include spread values between
sessment are determined by industry conventions. grades, locations, timings, and many other data.

In the international LPG markets, Argus publishes physical market In many markets, the relevant methodology will assign a relatively
prices in the open spot market as laid out in the specifications higher importance to transactions over bids and offers, and a
and methodology guide. Argus uses the trading period deemed relatively higher importance to bids and offers over other market
by Argus to be most appropriate, in consultation with industry, to information. Certain markets however will exist for which such a
capture spot liquidity. Additionally, Argus reflects international LPG hierarchy would produce unreliable and non-representative price as-
swap market prices as a bid-offer range over various time ranges sessments, and so the methodology must assign a different relative
depending on the broad regional location of the market, detailed importance in order to ensure the quality and integrity of the price
in the methodology below. This approach aligns the financial swap assessment. And even in markets for which the hierarchy normally
with its underlying regional futures settlement price. applies, certain market situations will at times emerge for which the
strict hierarchy would produce non-representative prices, requiring
In order to be included in the assessment process, deals must meet Argus to adapt in order to publish representative prices.
the minimum volume, delivery, timing, and specification require-
ments in our methodology. In illiquid markets, Argus assesses the Verification of transaction data
range within which product could have traded by applying a strict Reporters carefully analyse all data submitted to the price assess-
process outlined later in this methodology. ment process. These data include transactions, bids, offers, vol-
umes, counterparties, specifications and any other information that
Survey process contributes materially to the determination of price. This high level
Argus price assessments are informed by information received from a of care described applies regardless of the methodology employed.
wide cross-section of market participants, including producers, con- Specific to transactions, bids, and offers, reporters seek to verify the
sumers and intermediaries. Argus reporters engage with the industry price, the volume, the specifications, location basis, and coun-
by proactively polling participants for market data. Argus will contact terparty. In some transactional average methodologies, reporters
and accept market data from all credible market sources including also examine the full array of transactions to match counterparties
front and back office of market participants and brokers. Argus will and arrive at a list of unique transactions. In transactional average
also receive market data from electronic trading platforms, Argus methodologies, full details of the transactions verified are published
Open Markets™ (AOM™) and directly from the back offices of market on electronic bulletin boards that are accessible by subscribers. The
participants. Argus will accept market data by telephone, instant mes- deals are also published in the daily report.
senger, email, AOM or other means.
Several tests are applied by reporters in all markets to transactional
Argus encourages all sources of market data to submit all market data to determine if it should be subjected to further scrutiny. If a
data to which they are a party that falls within the Argus stated transaction has been identified as failing such a test, it will receive
methodological criteria for the relevant assessment. Argus encour- further scrutiny. For assessments used to settle derivatives and for
ages all sources of market data to submit transaction data from many other assessments, Argus has established internal proce-
back office functions. Argus will contact and accept market data dures that involve escalation of enquiry within the source’s company
from all credible market sources including front and back office of and escalating review within Argus management. Should this pro-
market participants and brokers. cess determine that a transaction should be excluded from the price
assessment process, the supervising editor will initiate approval
Throughout all markets, Argus is constantly seeking to increase the and, if necessary, documentation procedures.
number of companies willing to provide market data. Reporters are
mentored and held accountable for expanding their pool of contacts. Primary tests applied by reporters
The number of entities providing market data can vary significantly • Transactions not transacted at arm’s length, including deals
from day to day based on market conditions. between related parties or affiliates.
• Transaction prices that deviate significantly from the mean of
For certain price assessments identified by local management, if more all transactions submitted for that day.
than 50pc of the market data involved in arriving at a price assessment • Transaction prices that fall outside of the generally observed
is sourced from a single party the supervising editor will engage in an lows and highs that operated throughout the trading day.
analysis of the market data with the primary reporter to ensure that the • Transactions that are suspected to be a leg of another trans-
quality and integrity of the assessment has not been affected. action or in some way contingent on an unknown transaction.

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• Single deal volumes that significantly exceed the typical trans- The assessment process employing judgment is rigorous, replica-
action volume for that market. ble, and uses widely accepted valuation metrics. These valuation
• Transaction details that are identified by other market par- metrics mirror the process used by physical commodity traders
ticipants as being for any reason potentially anomalous and to internally assess value prior to entering the market with a bid or
perceived by Argus to be as such. offer. Applying these valuation metrics along with sound judgment
• Transaction details that are reported by one counterparty dif- significantly narrows the band within which a commodity can be as-
ferently than the other counterparty. sessed, and greatly increases the accuracy and consistency of the
• Any transaction details that appear to the reporter to be illogi- price series. The application of judgment is conducted jointly with
cal or to stray from the norms of trading behaviour. This could the supervising editor, in order to be sure that guidelines below are
include but is not limited to divergent specifications, unusual being followed. Valuation metrics include the following:
delivery location and counterparties not typically seen.
• Transactions that involve the same counterparties, the same Relative value transactions
price and delivery dates are checked to see that they are Frequently transactions occur which instead of being an outright
separate deals and not one deal duplicated in Argus records. purchase or sale of a single commodity, are instead exchanges of
commodities. Such transactions allow reporters to value less liquid
Secondary tests applied by editors for transactions markets against more liquid ones and establish a strong basis for
identified for further scrutiny the exercise of judgment.

Transaction tests • Exchange one commodity for a different commodity in the

• The impact of linkage of the deal to possible other transac- same market at a negotiated value.
tions such as contingent legs, exchanges, options, swaps, • Exchange delivery dates for the same commodity at a negoti-
or other derivative instruments. This will include a review of ated value.
transactions in markets that the reporter may not be covering. • Exchange a commodity in one location for the same com-
• The nature of disagreement between counterparties on trans- modity at another location at a negotiated value.
actional details.
• The possibility that a deal is directly linked to an offsetting Bids and offers
transaction that is not publicly known, for example a “wash If a sufficient number of bids and offers populate the market, then
trade” which has the purpose of influencing the published the highest bid and the lowest offer can be assumed to define the
price. boundaries between which a deal could be transacted.
• The impact of non-market factors on price or volume, includ-
ing distressed delivery, credit issues, scheduling issues, Comparative metrics
demurrage, or containment. The relative values between compared commodities are readily
discussed in the market and can be discovered through dialogue
Source tests with market participants. These discussions are the precursor to
• The credibility of the explanation provided for the outlying negotiation and conclusion of transactions.
nature of the transaction.
• The track record of the source submitting the data. Sources • Comparison to the same commodity in another market centre.
will be deemed more credible if they • Comparison to a more actively traded but slightly different
• Regularly provide transaction data with few errors. specification commodity in the same market centre.
• Provide data by Argus’ established deadline. • Analysis of prices in forward markets for a physically deliver-
• Quickly respond to queries from Argus reporters. able commodity that allow extrapolation of value into the
• Have staff designated to respond to such queries. prompt timing for the commodity assessed.
• How close the information receipt is to the deadline for informa- • Comparison to the commodity’s primary feedstock or primary
tion, and the impact of that proximity on the validation process. derived product(s).
• Comparison to trade in the same commodity but in a different
Assessment guidelines modality (as in barge versus oceangoing vessel) or in a differ-
When insufficient, inadequate, or no transaction information exists, ent total volume (as in full cargo load versus partial cargo load).
or when Argus concludes that a transaction-based methodology will
not produce representative prices, Argus reporters will make an as- Volume minimums and transaction data thresholds
sessment of market value by applying intelligent judgment based on Because of the varying transportation infrastructure found in all
a broad array of factual market information. Reporters must use a commodity markets, Argus typically does not establish thresholds
high degree of care in gathering and validating all market data used strictly on the basis of a count of transactions, as this could lead to
in determining price assessments, a degree of care equal to that unreliable and non-representative assessments. Instead, mini-
applying to gathering and validating transactions. The information mum volumes are typically established which may apply to each
used to form an assessment could include deals done, bids, offers, transaction accepted, to the aggregate of transactions, to transac-
tenders, spread trades, exchange trades, fundamental supply and tions which set a low or high assessment or to other volumetrically
demand information and other inputs. relevant parameters.

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For price assessments used to settle derivatives, Argus will seek to be found on our website at www.argusmedia.com. Included in this
establish minimum transaction data thresholds and when no such policy are restrictions against staff trading in any energy commodity
threshold can be established Argus will explain the reasons. These or energy related stocks, and guidelines for accepting gifts. Argus
thresholds will often reflect the minimum volumes necessary to also has strict policies regarding central archiving of email and
produce a transaction-based methodology, but may also establish instant messenger communication, maintenance and archiving of
minimum deal parameters for use by a methodology that is based notes, and archiving of spreadsheets and deal lists used in the price
primarily on judgment. assessment process. Argus publishes prices that report and reflect
prevailing levels for open-market arm’s length transactions (please
Should no transaction threshold exist, or should submitted data fall see the Argus Global Compliance Policy for a detailed definition of
below this methodology’s stated transaction data threshold for any arms length).
reason, Argus will follow the procedures outlined elsewhere in this
document regarding the exercise of judgment in the price assess- Consistency in the assessment process
ment process. Argus recognises the need to have judgment consistently applied
by reporters covering separate markets, and by reporters replacing
Transparency existing reporters in the assessment process. In order to ensure
Argus values transparency in energy markets. As a result, we this consistency, Argus has developed a programme of training and
publish lists of deals in our reports that include price, basis, coun- oversight of reporters. This programme includes:
terparty and volume information. The deal tables allow subscribers
to cross check and verify the deals against the prices. Argus feels • A global price reporting manual describing among other
transparency and openness is vital to developing confidence in the things the guidelines for the exercise of judgment.
price assessment process. • Cross-training of staff between markets to ensure proper holi-
day and sick leave backup. Editors that float between markets
Swaps and forwards markets to monitor staff application of best practices.
Argus publishes forward assessments for numerous markets. These • Experienced editors overseeing reporting teams are involved
include forward market contracts that can allow physical delivery and in daily mentoring and assisting in the application of judgment
swaps contracts that swap a fixed price for the average of a floating for illiquid markets.
published price. Argus looks at forward swaps to inform physical as- • Editors are required to sign-off on all price assessments
sessments but places primary emphasis on the physical markets. each day, thus ensuring the consistent application of judg-
ment.
Publications and price data
Argus International LPG prices are published in the Argus Interna- Review of methodology
tional LPG report. Subsets of these prices appear in other Argus The overriding objective of any methodology is to produce price as-
market reports and newsletters in various forms, such as Argus LPG sessments that are reliable indicators of commodity market values,
World. The price data are available independent of the text-based free from distortion and representative of spot market values. As
report in electronic files that can feed into various databases. These a result, Argus editors and reporters are regularly examining our
price data are also supplied through various third-party data integra- methodologies and are in regular dialogue with the industry in order
tors. The Argus website also provides access to prices, reports and to ensure that the methodologies are representative of the physical
news with various web-based tools. All Argus prices are kept in a market being assessed. This process is integral with reporting on
historical database and available for purchase. Contact your local a given market. In addition to this ongoing review of methodology,
Argus office for information. Argus conducts reviews of all of its methodologies and methodol-
ogy documents on at least an annual basis.
Corrections to assessments Argus market report editors and management will periodically and
Argus will on occasion publish corrections to price assessments as merited initiate reviews of market coverage based on a qualita-
after the publication date. We will correct errors that arise from cleri- tive analysis that includes measurements of liquidity, visibility of
cal mistakes, calculation errors, or a misapplication of our stated market data, consistency of market data, quality of market data and
methodology. Argus will not retroactively assess markets based on industry usage of the assessments. Report editors will review:
new information learned after the assessments are published. We
make our best effort to assess markets based on the information we • Appropriateness of the methodology of existing assessments
gather during the trading day assessed. • Termination of existing assessments
• Initiation of new assessments
Ethics and compliance
Argus operates according to the best practices in the publishing The report editor will initiate an informal process to examine viability.
field, and maintains thorough compliance procedures through- This process includes:
out the firm. We want to be seen as a preferred provider by our
sub¬scribers, who are held to equally high standards, while at the • Informal discussions with market participants
same time maintaining our editorial integrity and independence. Ar- • Informal discussions with other stakeholders
gus has a strict ethics policy that applies to all staff. The policy can • Internal review of market data

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Should changes, terminations, or initiations be merited, the report Argus will provide sufficient opportunity for stakeholders to analyse
editor will submit an internal proposal to management for review and comment on changes, but will not allow the time needed to
and approval. Should changes or terminations of existing assess- follow these procedures to create a situation wherein unrepresenta-
ments be approved, then formal procedures for external consulta- tive or false prices are published, markets are disrupted, or market
tion are begun. participants are put at unnecessary risk. Argus will engage with
industry throughout this process in order to gain acceptance of pro-
Changes to methodology posed changes to methodology. Argus cannot however guarantee
Formal proposals to change methodologies typically emerge out of universal acceptance and will act for the good order of the market
the ongoing process of internal and external review of the meth- and ensure the continued integrity of its price assessments as an
odologies. Formal procedures for external consultation regarding overriding objective.
material changes to existing methodologies will be initiated with an
announcement of the proposed change published in the relevant Following the consultation period, Argus management will com-
Argus report. This announcement will include: mence an internal review and decide on the methodology change.
This will be followed by an announcement of the decision that will
• Details on the proposed change and the rationale be published in the relevant Argus report and include a date for
• Method for submitting comments with a deadline for submis- implementation. For prices used in derivatives, publication of stake-
sions holders’ formal comments that are not subject to confidentiality and
• For prices used in derivatives, notice that all formal comments Argus’ response to those comments will also take place.
will be published after the given consultation period unless
submitter requests confidentiality

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Argus International LPG report Butane

Official selling prices of Saudi Aramco for butane for the listed month.
The Argus International LPG report is a daily report that covers the
market for internationally or openly traded LPG. KPC (Kuwait)

Prices are for contracts under whatever general terms and conditions Propane
are accepted as the standard prevailing in that particular market. Official selling prices of Kuwait Petroleum Company for propane for
the listed month.
Assessments and formulas refer to the price on the day of the
published report and published changes are from the previous Butane
publication. Official selling prices of Kuwait Petroleum Company for butane for
the listed month.
All prices are in US dollars per tonne ($/t) unless otherwise stated.
Argus Middle East netback

International comparisons Propane

The Argus Middle East netback is computed by subtracting the re-
Argus North Sea Index (ANSITM) ported daily Ras Tanura-Chiba freight assessment for VLGC carriers
from the Argus Far East Index for propane.
Propane
Prices are for the listed month. Butane
The Argus Middle East netback is computed by subtracting the re-
ANSI is a monthly index based on the last five days of the previous ported daily Ras Tanura-Chiba freight assessment for VLGC carriers
month Argus large cargo cif ARA assessments for propane, less from the Argus Far East Index for butane.
a freight element which is set on an annual basis. This base level
ANSI will be adjusted if the last five days average appears severely
out of alignment with prevailing industry sentiment. The freight ele- Naphtha
ment is based on average time charter rates for mid-size cargoes
on North Sea routes. The freight element change is announced in Argus International LPG includes several naphtha prices from other
September and is applied from the October ANSI to the following Argus publications.
September ANSI.
• cif northwest Europe
Butane • cif Mediterranean
Prices are for the listed month. See the Argus European Products Methodology.

ANSI is a monthly index based on the last five days of the previous • cfr Japan
month Argus large cargo cif ARA assessments for butane, less a • fob Mideast Gulf
freight element which is set on an annual basis. This base level See the Argus Asia-Pacific Products Methodology.
ANSI will be adjusted if the last five days average appears severely
out of alignment with prevailing industry sentiment. The freight ele-
ment is based on average time charter rates for mid-size cargoes LPG freight assessments
on North Sea routes. The freight element change is announced in
September and is applied from the October ANSI to the following Argus International LPG includes several LPG freight rates from
September ANSI. other Argus publications.

Sonatrach fob Bethioua • VLGC Ras Tanura-Chiba

• 1,800t Tees-Lisbon
Propane • 1,800t Tees-ARA
Official selling price of Sonatrach for propane for the listed month. See the Argus Freight Methodology.

Butane • Propane VLGC Houston-Chiba

Official selling price of Sonatrach for butane for the listed month. • Propane VLGC Houston-Flushing
• Handysize Houston-east coast Mexico
Saudi Aramco See the Argus NGL Americas methodology.

Propane
Official selling prices of Saudi Aramco for propane for the listed month.

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Northwest Europe and Mediterranean Transactions criteria for inclusion

The price is for a transaction:
Northwest Europe and Mediterranean bid and offer prices are
rounded to the nearest 50¢/t. The midpoint of the bid and offer is • on the day
rounded to the nearest 25¢/t. • standardised by Argus to the specifications published in the
current ToT contract and to any revisions of this contract as
All prices are assessed at 4.30pm London time. accepted by Argus
• for any days wholy within the delivery period 10-20 days
Propane forward
• standardised to Flushing using the ToT freight matrix for cif
cif ARA (large cargoes) basis ports of Flushing, Antwerp, Terneuzen, Canvey Island,
Le Havre, Stenungsund, and ToT freight differential criteria for
The application of the market data to the methodology any alternative discharge port not listed in the matrix
Price identification is based primarily on reported transactions, bids • standardised to an average 20,500t on vessels ranging from
and offers, and other market data. 16,000-84,000m³
• with a minimum 50pc fixed price element, except in deals
In the case of the large cargo cif ARA propane assessment other market done on a naphtha-related basis
data will be derived from the forward curve for propane, or an assess- • concluded by 4:30pm London time
ment, at Argus’ discretion, if the forward price data are unavailable.
Bids and offers
Argus assesses a representative market value by constructing an Argus will include values from bids and offers in the following man-
average price for the period 10-20 days forward from ‘on the day’ ner if unmatched bids are above or unmatched offers below the
market data. price of reported trade.

In the absence of assessment-relevant trade, and in the event that Bids and offers criteria for inclusion
only assessment-relevant bids or offers are available in the market The price is for a bid or offer:
at the time of assessment or if the spread between assessment-
relevant orders is greater than $6/t, Argus will typically include a $6/t • on the day;
spread between bids and offers in the assessment process. • standardised by Argus to the specifications published in the
current ToT contract for grade and quality and to any revisions
In these cases, Argus may narrow that default $6/t spread for of this contract as accepted by Argus;
reasons including but not limited to the preservation of the accuracy • bids to have a minimum 5 day delivery range and offers to
and/or representativeness of the midpoint price or in consideration have a maximum 5 day delivery date range wholly within the
of other relevant market information. 10-20 days forward delivery period;
• standardised to Flushing using the ToT freight matrix for cif
Argus assesses the price in the following manner: basis ports of Flushing, Antwerp, Terneuzen, Canvey Island,
Le Havre, Stenungsund, and ToT freight differential criteria for
Transactions any alternative discharge port not listed in the matrix;
The price of a large cargo transaction that can be standardised (in • standardised to an average 20,500t on vessels ranging from
Argus’ exclusive judgment) to the specifications published in the 16,000-84,000m³;
current ToT (10 days’ notice of a three-day delivery window) contract • with a minimum 50pc fixed price element except in deals
and to any revisions of this contract as accepted by Argus, will be done on a naphtha-related basis;
included in the assessment for the period of delivery. • that is firm and feasible (in the exclusive judgment of Argus);
• adjusted to a representative value using prevailing and rel-
All such transactions will be considered for inclusion in the price evant spreads (in the exclusive judgment of Argus).
identification process.
The highest bids and lowest offers (adjusted to a representative value)
Argus will make use of swaps market transactions to assist in the evalu- prevailing at 4:30pm London time will be used to determine the values
ation of the outright value of floating prices for deals, bids and offers. for inclusion.

Argus does not establish a minimum transaction data threshold as fob northwest Europe (small)
this would lead to unreliable and non-representative assessments. Size: small cargoes (coasters) are up to 2,000t
Basis: fob northwest Europe
The Argus LPG Bulletin Board displays trade details and is available Timing: cargoes for lifting 3-15 days forward
to clients on the Argus website. Specification: the fob northwest Europe small cargo assessment is
for pressurised vessels, up to 20pc olefins. Sulphur content of no more
than 50ppm.

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Floating-price trades will be considered for inclusion in the assessment fob ARA barge
after conversion to a fixed-price fob basis using the relevant published The Argus fob ARA barge assessment is the running average in
Argus price assessment on the day of trade and, if necessary, a freight which the last data point will be assumed to be the data point for the
differential to normalise cif trades to a fob northwest Europe basis. remaining days of the month.

cif ARA (small) Butane

Size: small cargoes (coasters) are up to 2,000t
Basis: cif ARA cif ARA (large cargoes)
Timing: cargoes for delivery 3-15 days forward Size: large butane cargoes are 7,000-12,000t
Specification: the cif northwest Europe small cargo assessment is for Basis: cif ARA
pressurised vessels, up to 20pc olefins. Sulphur content of no more Timing: cargoes for delivery 10-25 days forward, eg: on 1 July the
than 50ppm. delivery period will be 11-26 July. Bids must have a minimum five-day
delivery range and offers must have a maximum five-day delivery range
fob ARA (barge) wholly within the 10-25 days forward delivery period.
Size: barges are up to 1,300t Specification: The large cargo butane assessment is for field grade
Basis: fob ARA mixed butane (minimum 20pc isobutane content) or normal butane,
Timing: barges for lifting 2-10 days forward fully refrigerated. Sulphur content of no more than 50ppm.
Specification: the fob barge assessment is for pressurised vessels,
up to 20pc olefins. Sulphur content of no more than 50ppm. Argus uses swaps market information to assist in assigning an outright
Floating-price trades will be considered for inclusion in the assessment value to floating-price bids offers and trades, and may also assess butane
after conversion to a fixed-price fob basis using the relevant published prices on a percentage of naphtha basis.
Argus price assessment on the day of trade and, if necessary, a freight
differential to normalise cif trades to a fob ARA basis. In the absence of outright price indications for physical cargoes, Argus
may include in the assessment process butane swaps market information
fca ARA (rail) including transactions, bids and offers, if available.
Size: rail is for 400-600t
Basis: fca (rail) ARA In the absence of assessment-relevant trade, and in the event that
Timing: railcars lifting 2-10 days forward only assessment-relevant bids or offers are available in the market
Specification: the fca (rail) ARA assessment includes commercial and at the time of assessment or if the spread between assessment-
ex-terminal material. Sulphur content of no more than 50ppm. relevant orders is greater than $6/t, Argus will typically include a $6/t
spread between bids and offers in the assessment process.
cif Mediterranean (large)
Size: large cargoes are 5,000-20,500t In these cases, Argus may narrow that default $6/t spread for
Basis: cif Lavera reasons including but not limited to the preservation of the accuracy
Timing: cargoes for delivery 3-15 days forward and/or representativeness of the midpoint price or in consideration
Specification: the large cargo propane assessment is for field grade of other relevant market information.
(95pc) propane, fully refrigerated.
fob northwest Europe (small)
fob Mediterranean (small) Size: small cargoes (coasters) are up to 6,000t
Size: small cargoes (coasters) are up to 2,000t Basis: fob northwest Europe
Basis: fob Lavera Timing: cargoes for lifting 3-15 days forward
Timing: cargoes for lifting 3-15 days forward Specification: the fob northwest Europe small cargo assessment
Specification: the small cargo assessment is for commercial grade. is for pressurised vessels, up to 30pc olefins. Sulphur content of no
Small cargo (coasters) are pressurised vessels. more than 50ppm. Timestamp is 4:30pm London time.

fca Mediterranean (rail) cif ARA (small)

Size: rail is 400-600t Size: small cargoes (coasters) are 1,800-2,500t
Basis: fca (rail) Lavera Basis: cif ARA
Timing: railcars lifting 2-10 days forward Timing: cargoes for delivery 3-15 days forward
Specification: railcars are for commercial grade Specification: the cif northwest Europe small cargo assessment is for
pressurised vessels, up to 30pc olefins. Sulphur content of no more
Propane averages than 50ppm.
Floating-price trades will be considered for inclusion in the assess-
cif ARA large cargo ment after conversion to a fixed-price fob basis using the relevant
The Argus cif ARA large cargo assessment is the arithmetic average of published Argus price assessment on the day of trade.
the prices published every day in a month.

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fob ARA (barge) Argus International LPG includes prices for

Size: barges are up to 1,200t • fob Black Sea propane
Basis: fob ARA • fob Black Sea butane
Timing: barges for lifting 2-10 days forward • fob Black Sea propane-butane mix
Specification: the fob barge assessment is for pressurised vessels, • daf Brest propane-butane mix
up to 20pc olefins. Sulphur content of no more than 50ppm. • daf Brest propane
Floating-price trades will be considered for inclusion in the assess- • daf Ukraine propane-butane mix.
ment after conversion to a fixed-price fob basis using the relevant • Argus daf Ukrainian-Romanian border propane-butane mix
published Argus price assessment on the day of trade. • fot Burgas (Lukoil posted) propane-butane mix
• daf Bekabad propane-butane mix
fca ARA (rail)
Size: rail is for 400-600t Argus Polish Domestic Index (APDI™) price:
Basis: fca (rail) ARA Basis: fca Plock
Timing: railcars lifting 2-10 days forward Specification: the product contains on average 50pc propane and
Specification: the fca (rail) ARA assessment includes commercial and 50pc butane.
ex-terminal material. Sulphur content of no more than 50ppm.
The APDI price is an assessment for the domestic Polish market
cif Mediterranean (large) calculated on deliveries to Poland from the ARA region through
Size: large cargoes are 5,000-20,500t. sea terminals and by rail from the eastern and former Soviet Union
Basis: cif Lavera regions. The calculation is as follows:
Timing: cargoes for delivery 3-15 days forward
Specification: the large cargo butane assessment is for field grade APDI= [(ADBM*65% + ADBP*10% + (CAL + F)*5%) + (LOG/$)]
mixed butane (minimum 20pc isobutane content), fully refrigerated. +20%OG/$, where:
• ADBM = average Argus daf Brest for mix
fob Mediterranean (small) • ADBP = average Argus daf Brest for Propane
Size: small cargoes (coasters) are up to 2,000t • CAL = average cif ARA for Propane
Basis: fob Lavera • F = sea freight from ARA to Stettin (is taken for 2016 as $60/mt)
Timing: for cargoes for lifting 3-15 days forward • LOG = total average logistics costs from daf and to Plock (is
Specification: small cargo assessments are for commercial grade. taken for 2016 as 190 PLN/t)
Small cargo (coasters) are pressurised vessels. • $ = exchange rate PLN/USD
• OG = Orlen Gaz quotation (with 0 logistics cost)
Butane averages
Logistics and freight costs are revised on an annual basis.
cif ARA large cargo
The Argus cif ARA large cargo assessment is the arithmetic average of
the prices published every day in a month. International swaps prices

fob ARA barge Propane northwest Europe

The Argus fob ARA barge assessment is the running average in Swaps in northwest Europe are for 12 months, four quarters and
which the last data point will be assumed to be the data point for the one calendar year forward. The front month rolls on the first working
remaining days of the month. day after the 15th of the month. Swap quarters roll on the first work-
ing day after the 15th of the second month of the quarter. Calendar
Crude year swaps roll on the first working day of the year. Timestamp is
4:15-4:30pm London time.
Argus North Sea Dated
Prices are in US dollars/barrel. See the Argus Crude methodology. Prices for the first and/or second forward month, depending on
which is used as the floating price component of physical trade, are
Ice Brent futures settlement calculated as a volume-weighted average of trade, rounded to the
Prices are in US dollars/barrel. Prices are the settlement prices for the nearest 25¢/t, with a minimum 2,000t transaction size.
IntercontinentalExchange’s Brent contract for three months forward.
Naphtha northwest Europe
Swaps in northwest Europe are for 12 months, four quarters and
FSU one calendar year forward. The front month rolls on the first working
day after the 15th of the month. Swap quarters roll on the first work-
A full methodology for the FSU assessments published in Argus ing day after the 15th of the month before the start of the quarter.
International LPG can be found in the Argus Russian LPG and Con- Calendar year swaps roll on the first working day of the year. Times-
densate methodology. tamp is 4.30pm London time.

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Propane CP Middle East Spreads

The minimum swap volume for the CP swaps is 1,000t. Propane
contract price swaps are assessed twice each day, at a 5pm Singa- M1 diff to physical
pore timestamp and a 4.30pm London timestamp. Prices are in US dollars/tonne. This is the difference between the
assessed physical or wet value and the front-month swap.
Prices are assessed for three months of the Contract Price (CP) at
the 5pm Singapore timestamp. • Cif ARA propane minus cif ARA propane swap
• Cif northwest Europe naphtha minus European naphtha swap
Prices are assessed for 12 months, four quarters and one calendar • Fob Middle East Gulf propane minus CP swap
year of the Contract Price (CP) at the 4.30pm London timestamp. • Argus Far East Index propane minus Argus Far East Index
propane swap
The front month rolls on the first working day on which the new CP • Mont Belvieu LST propane mean of high/low minus Mont
is available. For example, if the October CP is issued on 29 Sep- Belvieu propane swap
tember, the swaps front month will roll from October to November
that day. Swap quarters roll on the first working day on which the CP Propane-naphtha
has been announced for two months of the quarter. Calendar year Prices are in US dollars/tonne. The cif ARA propane swap minus the
swaps roll on the first working day of the year. European naphtha swap.

Butane CP Middle East East-West

The minimum swap volume for the CP swaps is 1,000t. Butane con- Prices are in US dollars/tonne. The Argus Far East Index propane
tract price swaps are assessed at a 5pm Singapore timestamp. swap minus the cif ARA propane swap.

Prices are assessed for one forward month of the Contract Price The Arb
(CP) at the 5pm Singapore timestamp. Prices are in US dollars/tonne. The Mont Belvieu propane swap
minus the cif ARA propane swap.
The front month rolls on the first working day on which the new CP is
available. For example, if the October CP is issued on 29 September, Mont Belvieu-AFEI
the swaps front month will roll from October to November that day. Prices are in US dollars/tonne. The Mont Belvieu propane swap
minus the Argus Far East Index propane swap.
Argus Far East Index
The minimum swap volume for the Argus Far East Index swaps is AFEI-CP
1,000t. Prices are in US dollars/tonne. The Argus Far East Index propane
swap minus the CP propane swap.
Argus Far East Index propane swaps prices are assessed twice
each day, at a 5pm Singapore timestamp and a 4.30pm London Butane-Propane CP swaps differential
timestamp. Prices are in US dollars/tonne. The Argus butane CP Middle East
front-month swap minus the Argus propane CP Middle East front-
Prices are assessed for three months of the Argus Far East Index at month swap.
the 5pm Singapore timestamp.
Middle East and Asia-Pacific averages
Prices are assessed for 12 months, four quarters and one calendar
year of the Argus Far East Index at the 4.30pm London timestamp. Middle East averages

The front month rolls on the first working day after the 15th of the Propane
month. Swap quarters roll on the first working day after the 15th of The Argus Middle East fob average is the average of the spot premium
the second month of the quarter. Calendar year swaps roll on the for additional Saudi volumes trading out of Yanbu and Ras Tanura
first working day of the year. which is calculated on a monthly basis and which rolls on the 1st of the
month. So on the 1st of January, Argus will begin quoting a cumulative
Mont Belvieu LST average for January.
Prices are in US dollars/tonne converted from US cents/gallon. Mont
Belvieu propane swaps assessments are for 12 months, four quar- Butane
ters and one calendar year. The front month rolls on the first working The Argus Middle East fob average is the average of the spot
day after the 15th of the month. Swap quarters roll on the first work- premium for additional Saudi volumes trading out of Yanbu and Ras
ing day after the 15th of the second month of the quarter. Calendar Tanura which is calculated on a monthly basis and which rolls on the
year swaps roll on the first working day of the year. Timestamp is 1st of the month. So on the 1st of January, Argus will begin quoting
4.30pm London time. a cumulative average for January.

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Argus Middle East Index averages Japan CP cfr

Timing: CP basis is the month’s CP (Saudi Contract Price) that is
Propane the underlying price for the CP differential. Period is the timing of lift-
The Argus Middle East Index average is the average of propane spot ing or delivery. For refrigerated cargoes cfr Japan (CP plus), the roll
prices trading out of the Mideast Gulf, which is calculated on a monthly date from first-half month delivery to second-half month delivery will
basis and which rolls on the 1st of the month. So on the 1st of January, occur on the 10th of the previous month. The roll date from second-
Argus will begin assessing a cumulative average for January. half month delivery to first-half month delivery will occur on the 25th
of the previous month
Butane Specification: refrigerated cargoes are of field grade quality
The Argus Middle East Index average is the average of butane spot Size: 22,000t cargoes
prices trading out of the Mideast Gulf, which is calculated on a monthly Location: for delivery to Kawasaki/Chiba (Japan)
basis and which rolls on the 1st of the month. So on the 1st of January,
Argus will begin assessing a cumulative average for January. Japan cfr
Specification: refrigerated cargoes are of field grade quality
Argus Far East Index Size: 23,000t cargoes
Location: for delivery to Kawasaki/Chiba (Japan)
Propane The assessment is an average price for the period 25-40 days from
The Argus Far East Index average is accumulated on a calendar the publication date. Argus will make a price assessment for each
month basis, rolling on the first working day of the month. For de- of the days in the 25-40 day forward period taking into account the
tails of the Argus Far East Index methodology see below. price structure of the physical market. Physical prices are discussed
in the market for different delivery periods in the 25-40 day forward
Butane period. The delivery periods are usually discussed as the first half
The Argus Far East Index average is accumulated on a calendar and the second half of the month. So the Argus assessment for
month basis, rolling on the first working day of the month. For de- 25-40 day forward period, should prices be flat for each of these de-
tails of the Argus Far East Index methodology see below. livery periods, will be proportionate to the number of days for each
half month delivery period within the 25-40 day forward period.
11+11 propane-butane mix
The 11+11 propane-butane mix average is accumulated on a calendar In recent years, it has become common for participants in the Asian
month basis, rolling on the first working day of the month. For details of cfr market to transact deals that include both a fixed price and
the 11+11 propane-butane mix methodology see below. floating price component. For example, deals that are a 50:50 aver-
age of the Far East Index and a fixed price, are common. In such
cases, Argus will use a variety of techniques to determine the value
Asia-Pacific of the deal so that it can be considered in Argus’ assessments.
The techniques include examining the forward structure of the LPG
All prices are assessed at 5pm Singapore time. swaps market, considering the value of the fixed portion of the deal
and using other analytical techniques employed by the industry to
Propane derive a fair value for the deal. Argus will use these techniques as
appropriate to derive a representative value for deals that are priced
Argus Middle East Index on a fixed/floating price basis and consider such deals as warranted
Timing: period is the timing of lifting The Argus Middle East Index in its assessments.
will roll from one month loading to the next on the 1st of the month.
Specificaiton: refrigerated cargoes are of field grade quality Taiwan CP cfr
Size: 45,000-47,000t cargoes Timing: Period is the timing of lifting or delivery. CP basis is the
Location: loading at Ras Tanura, Yanbu, Ras Laffan, Ruwais, Das month’s CP (Saudi Contract Price) that is the underlying price for
Island and Mina al Ahmadi the CP differential. For refrigerated cargoes cfr Taiwan (CP Plus), the
roll date from first-half month delivery to second-half month delivery
Gulf CP fob will occur on the 10th of the previous month. The roll date from
Timing: CP basis is the month’s CP (Saudi Contract Price) that is second-half month delivery to first-half month delivery will occur on
the underlying price for the CP differential. Period is the timing of the 25th of the previous month.
lifting or delivery. The fob Mideast Gulf roll date from one month Specification: refrigerated cargoes are of field grade quality.
loading to the next will occur on the 1st of the month. Size: 22,000t cargoes
Specification: refrigerated cargoes are of field grade quality. Location: for delivery to Kaohsiung (Taiwan)
Size: 45,000-47,000t cargoes
Location: loading at Ras Tanura, Yanbu, Ras Laffan, Ruwais, Das East China CP cfr
Island and Mina Al Ahmadi Timing: period is the timing of lifting or delivery. CP basis is the
month’s CP (Saudi Contract Price) that is the underlying price for
the CP differential. For refrigerated cargoes cfr China (CP Plus), the

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roll date from first-half month delivery to second-half month delivery In recent years, it has become common for participants in the Asian
will occur on the 25th of the previous month. The roll date from cfr market to transact deals that include both a fixed price and
second-half month delivery to first-half month delivery will occur on floating price component. For example, deals that are a 50:50 aver-
the 10th of the month. age of the Far East Index and a fixed price, are common. In such
Specification: refrigerated cargoes are of field grade quality. cases, Argus will use a variety of techniques to determine the value
Size: 22,000t cargoes of the deal so that it can be considered in Argus’ assessments.
Location: for delivery into Shanghai and Taicang in the Jiangsu The techniques include examining the forward structure of the LPG
Province for east China swaps market, considering the value of the fixed portion of the deal
and using other analytical techniques employed by the industry to
East China cfr derive a fair value for the deal. Argus will use these techniques as
Specification: refrigerated cargoes are of field grade quality appropriate to derive a representative value for deals that are priced
Size: 23,000t cargoes on a fixed/floating price basis and consider such deals as warranted
Location: for delivery into Shanghai and Taicang in the Jiangsu in its assessments.
Province of east China.
Timing: 25-40 days from the publication date Argus Far East Index (propane)
In recent years, it has become common for participants in the Asian The Argus Far East Index is the average of the Argus Japan cfr pro-
CFR market to transact deals that include both a fixed price and pane quotation and the Argus South China cfr propane quotation.
floating price component. For example, deals that are a 50:50 aver- No minimum data transaction threshold exists as this is the average
age of the Far East Index and a fixed price, are common. In such of other assessments.
cases, Argus will use a variety of techniques to determine the value
of the deal so that it can be considered in Argus’ assessments. For the purposes of assessing the Far East Index for propane Argus
The techniques include examining the forward structure of the LPG establishes a viable buy-sell range at the timestamp. To accomplish
swaps market, considering the value of the fixed portion of the deal this, Argus considers a wide range of information, including bids
and using other analytical techniques employed by the industry to and offers, transactions, informed market views and the perfor-
derive a fair value for the deal. Argus will use these techniques as mance of other related markets.
appropriate to derive a representative value for deals that are priced
on a fixed/floating price basis and consider such deals as warranted Market information may not be consistent regarding prevailing price
in its assessments. levels so if contradictory information regarding a viable buy-sell
range is in the market Argus will give the greatest weight to deals
South China CP cfr for cargoes that conform to Argus’ published specification done in
Timing: Period is the timing of lifting or delivery. CP basis is the the run up to the timestamp (currently 5:00pm Singapore time).For
month’s CP (Saudi Contract Price) that is the underlying price for inclusion in the FEI, deals must be judged by Argus to be repeat-
the CP differential. For refrigerated cargoes cfr China (CP Plus) the able and representative.
roll date from first-half month delivery to second-half month delivery
will occur on the 25th of the previous month. The roll date from All bids, offers and deals to be included for Argus assessment are
second-half month delivery to first-half month delivery will occur on to conform to Ginga standard terms.
the 10th of the month.
Specification: refrigerated cargoes are of field grade quality For the purpose of the Argus Far East Index assessment, the south
Size: 22,000t cargoes China cfr price that makes up 50pc of the AFEI assessment is set
Location: for delivery into Shenzen and Zhuhai in the Guangdong at parity to the Japan cfr price assessment. This is in line with cur-
Province for south China rent industry practice as China purchases do not conform to the
standard traded contract in the region, which is currently the Ginga
South China cfr contract. Argus will keep under review the standard traded contract
Specification: refrigerated cargoes are of field grade quality terms for the region and institute amendments to the AFEI method-
Size: 23,000t cargoes ology as and when necessary.
Location: for delivery into Shenzen and Zhuhai in the Guangdong
Province of south China Bid and offers must be firm, made in the open market, not subject
Timing: the assessment is an average price for the period 25-40 days to special conditions and be valid for a period of time during which
from the publication date. Argus will make a price assessment for each a deal could reasonably be transacted. Similarly if a firm bid and/
of the days in the 25-40 day forward period taking into account the or offer is made after a deal but before the timestamp, Argus will
price structure of the physical market. Physical prices are discussed in consider this bid and/or offer if it is found to be representative. This
the market for different delivery periods in the 25-40 day forward period. bid and/or offer may be viewed by Argus as being more representa-
The delivery periods are usually discussed as the first half and the sec- tive of the market at the timestamp than a single non-repeatable
ond half of the month. So the Argus assessment for 25-40 day forward deal and may be used as the basis for the price assessment. In
period, should prices be flat for each of these delivery periods, will be the absence of any firm bids and/or offers, Argus shall use inputs
proportionate to the number of days for each half month delivery period from its regular market surveys, plus any other inputs from brokers,
within the 25-40 day forward period. market participants or market portals, to establish a valid buy-sell

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Methodology and specifications guide November 2019

range. This buy-sell range shall be determined using informed mar- Such a price differential can be obtained through a variety of chan-
ket opinions and other indicators judged by Argus to be indicative of nels. This includes deriving from 11+11 quotes where a midpoint
market values. value of 11+11 is being used in combination with an informed
consensus price spread between propane and butane, to derive
Argus will review swaps and other derivatives markets with an eye butane values.
toward determining forward market structure and direction. Argus
will also refer to the swaps markets to evaluate the outright value of During the periods of time when butane demand from the petro-
floating prices deals that are reported. chemical sector prevails, Argus may assess butane prices based on
an economic relationship to naphtha prices.
Market structure
The Argus LPG assessments are for cargoes delivered to destination Argus Middle East Index
ports 25-40 days forward from the date of assessments. It is usual Timing: period is the timing of lifting. The Argus Middle East Index
that part of this assessment period would be determined by market will roll from one month loading to the next on the 1st of the month
prices for one delivery period, and another part would be determined Specification: refrigerated cargoes are of field grade quality
by different delivery period. In such cases, Argus will pro-rate the Size: 45,000-47,000t cargoes
values of the relevant delivery periods. A spreadsheet detailing these Location: loading at Ras Tanura, Yanbu, Ras Laffan, Ruwais, Das
inputs is available on a daily basis from Argus on request. Island and Mina al Ahmadi

A significant volume of the LPG trade in the eastern LPG markets Gulf CP fob
consists of mixed cargoes that include approximately 11,000t each Timing: CP basis is the month’s CP (Saudi Contract Price) that is
of propane and butane. These cargoes typically are traded at a the underlying price for the CP differential. Period is the timing of
single price representing the value of both components. lifting or delivery. The fob Mideast Gulf roll date from one month
loading to the next will occur on the 1st of the month.
In the absence of market indicators for 23,000t cargoes of propane or Specification: refrigerated cargoes are of field grade quality
butane, Argus will include 11,000t + 11,000t (known as 11-11) deals Size: 45,000-47,000t cargoes
and bid/offer ranges in its assessments. This means that the midpoint Location: loading at Ras Tanura, Yanbu, Ras Laffan, Ruwais, Das
value of 11-11 deals will be used and an informed consensus differ- Island and Mina al Ahmadi
ential between propane and butane prices used to calculate individual
propane and butane values from the 11,000t + 11,000t midpoint value. Japan CP cfr
Timing: CP basis is the month’s CP (Saudi Contract Price) that is
If there is any discrepancy between 23,000t and mixed cargoes the underlying price for the CP differential. Period is the timing of lift-
then the 23,000t price will set the Argus price quotation for 23,000t ing or delivery. For refrigerated cargoes cfr Japan (CP plus), the roll
propane and 23,000t butane. date from first-half month delivery to second-half month delivery will
occur on the 10th of the previous month. The roll date from second-
Butane half month delivery to first-half month delivery will occur on the 25th
of the previous month.
Argus Far East Index (butane) Specification: refrigerated cargoes are of field grade quality
Japan cfr Size: 22,000t cargoes
The Argus Far East index is for cargoes delivered to destination Location: for delivery to Kawasaki/Chiba (Japan)
ports 25-40 days forward from the date of assessment.
Specification: refrigerated cargoes are of field grade quality Taiwan CP cfr
Size: 23,000t cargoes Timing: CP basis is the month’s CP (Saudi Contract Price) that is
Location: for delivery into Kawasaki/Chiba (Japan) the underlying price for the CP differential. Period is the timing of lift-
ing or delivery. For refrigerated cargoes cfr Taiwan (CP Plus), the roll
The price is calculated based on an assessment of the spread be- date from first-half month delivery to second-half month delivery will
tween front-month Gulf CP butane and propane swaps prices and occur on the 10th of the previous month. The roll date from second-
the Argus Far East Index (propane) assessment. half month delivery to first-half month delivery will occur on the 25th
of the previous month.
Note, the Argus Far East Index (butane) and the Argus Japan cfr Specification: Refrigerated cargoes are of field grade quality.
butane assessment are identical. Size: 22,000t cargoes for delivery to Kaohsiung (Taiwan)

Argus Asia-Pacific butane assessments East China CP cfr

Argus will assess 22,000t butane prices in the following manner. Timing: CP basis is the month’s CP (Saudi Contract Price) that is
During the periods of time when butane demand from the petro- the underlying price for the CP differential. Period is the timing of lift-
chemical sector is absent, Argus will assess butane prices as a ing or delivery. For refrigerated cargoes cfr China (CP Plus), the roll
price differential against propane prices, with the differential being date from first-half month delivery to second-half month delivery will
obtained based on an informed consensus. occur on the 25th of the previous month. The roll date from second-

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Methodology and specifications guide November 2019

half month delivery to first-half month delivery will occur on the 10th of cfr market to transact deals that include both a fixed price and floating
the month. price component. For example, deals that are a 50:50 average of the
Specification: refrigerated cargoes are of field grade quality Far East Index and a fixed price, are common. In such cases, Argus
Size: cfr east China are for 22,000t cargoes will use a variety of techniques to determine the value of the deal so
Location: for delivery into Shanghai and Taicang in the Jiangsu that it can be considered in Argus’ assessments. The techniques
Province for east China include examining the forward structure of the LPG swaps market,
considering the value of the fixed portion of the deal and using other
East China cfr analytical techniques employed by the industry to derive a fair value
Specification: refrigerated cargoes are of field grade quality for the deal. Argus will use these techniques as appropriate to derive
Size: 23,000t cargoes a representative value for deals that are priced on a fixed/floating
Location: delivery into Shanghai and Taicang in the Jiangsu Prov- price basis and consider such deals as warranted in its assessments.
ince of east China
Timing: 25-40 days from the publication date West coast India CP cfr
Timing: CP basis is the month’s CP (Saudi Contract Price) that is
In recent years, it has become common for participants in the Asian the underlying price for the CP differential. Period is the timing of
cfr market to transact deals that include both a fixed price and lifting or delivery. For refrigerated cargoes cfr India (CP Plus), the roll
floating price component. For example, deals that are a 50:50 aver- date from one month delivery to the next will occur on the 25th of
age of the Far East Index and a fixed price, are common. In such the previous month.
cases, Argus will use a variety of techniques to determine the value Specification: refrigerated cargoes are of field grade quality
of the deal so that it can be considered in Argus’ assessments. Size: 10,000-15,000t cargoes
The techniques include examining the forward structure of the LPG Location: for delivery into Kandla and Mangalore on the west coast
swaps market, considering the value of the fixed portion of the deal of India
and using other analytical techniques employed by the industry to
derive a fair value for the deal. Argus will use these techniques as 11+11 propane-butane mix
appropriate to derive a representative value for deals that are priced
on a fixed/floating price basis and consider such deals as warranted Argus also publishes two mixed cargo quotations of 11,000t pro-
in its assessments. pane and 11,000t butane (11-11). One quotation is basis cfr Japan
and the other cfr south China.
South China CP cfr
Timing: CP basis is the month’s CP (Saudi Contract Price) that is Argus will use a similar methodology as described above to estab-
the underlying price for the CP differential. Period is the timing of lift- lish a buy-sell range for these two quotes. Argus will consider a wide
ing or delivery. For refrigerated cargoes cfr China (CP Plus), the roll range of information, including bids and offers, transactions, in-
date from first-half month delivery to second-half month delivery will formed market views and the performance of other related markets.
occur on the 25th of the previous month. The roll date from second- Market information may not be consistent regarding prevailing price
half month delivery to first-half month delivery will occur on the 10th levels so if contradictory information regarding a viable buy-sell
of the month. range is in the market Argus will give the greatest weight to deals for
Specification: refrigerated cargoes are of field grade quality cargoes that conform to Argus’ published specification done in the
Size: 22,000t cargoes run up to the timestamp. For inclusion in the mixed cargo quotes,
Location: for delivery into Shenzen and Zhuhai in the Guangdong deals must be judged by Argus to be repeatable and representative.
province for south China
Bid and offers must be firm, made in the open market, not subject
South China cfr to special conditions and be valid for a period of time during which
Specification: refrigerated cargoes are of field grade quality a deal could reasonably be transacted. Similarly if a firm bid and/
Size: 23,000t cargoes or offer is made after a deal but before the timestamp, Argus will
Location: for delivery into Shenzen and Zhuhai in the Guangdong consider this bid and/or offer if it is found to be representative. This
province of south China bid and/or offer may be viewed by Argus as being more representa-
The assessment is an average price for the period 25-40 days from tive of the market at the timestamp than a single non-repeatable
the publication date. Argus will make a price assessment for each deal and may be used as the basis for the price assessment. In
of the days in the 25-40 day forward period taking into account the the absence of any firm bids and/or offers, Argus shall use inputs
price structure of the physical market. Physical prices are discussed from its regular market surveys, plus any other inputs from brokers,
in the market for different delivery periods in the 25-40 day forward market participants or market portals, to establish a valid buy-sell
period. The delivery periods are usually discussed as the first half range. This buy-sell range shall be determined using informed mar-
and the second half of the month. So the Argus assessment for ket opinions and other indicators judged by Argus to be indicative of
25-40 day forward period, should prices be flat for each of these de- market values.
livery periods, will be proportionate to the number of days for each
half month delivery period within the 25-40 day forward period.
In recent years, it has become common for participants in the Asian

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Methodology and specifications guide November 2019

Japan cfr and using other analytical techniques employed by the industry to
Specification: refrigerated cargoes are of field grade quality. Prices derive a fair value for the deal. Argus will use these techniques as
are for a single, mixed cargo. appropriate to derive a representative value for deals that are priced
Size: 23,000t cargoes divided equally between propane and butane on a fixed/floating price basis and consider such deals as warranted
Location: for delivery into Kawasaki/Chiba (Japan) in its assessments.
The assessment is an average price for the period 25-40 days from
the publication date. Argus will make a price assessment for each Argus South China cfr Index (propane and butane)
of the days in the 25-40 day forward period taking into account the Specification: refrigerated cargoes are as per original supplier’s
price structure of the physical market. Physical prices are discussed guaranteed specification
in the market for different delivery periods in the 25-40 day forward Size: 15,000-23,000t cargoes
period. The delivery periods are usually discussed as the first half Location: for delivery into the Pearl River delta (Guangzhou, Zhuhai
and the second half of the month. So the Argus assessment for and Dongguan) of Guangdong province
25-40 day forward period, should prices be flat for each of these de- The assessment is an average price for the period 25-40 days from
livery periods, will be proportionate to the number of days for each the publication date. Argus will make a price assessment for each
half month delivery period within the 25-40 day forward period. of the days in the 25-40 day forward period taking into account the
price structure of the physical market. Physical prices are discussed
In recent years, it has become common for participants in the Asian in the market for different delivery periods in the 25-40 day forward
cfr market to transact deals that include both a fixed price and float- period. The delivery periods are usually discussed as the first half
ing price component. For example, deals that are a 50:50 average and the second half of the month. So the Argus assessment for the
of the Far East Index and a fixed price, are common. In such cases, 25-40 day forward period, should prices be flat for each of these de-
Argus will use a variety of techniques to determine the value of the livery periods, will be proportionate to the number of days for each
deal so that it can be considered in Argus’ assessments. half-month delivery period within the 25-40 day forward period.

The techniques include examining the forward structure of the LPG The South China cfr assessment considers cargoes of worldwide
swaps market, considering the value of the fixed portion of the deal origin, including Iran. The assessment considers bids, offers and
and using other analytical techniques employed by the industry to deals for a laycan of a minimum of five days within the 25-40 day
derive a fair value for the deal. Argus will use these techniques as forward period and a laytime of up to 48 hours for one safe port.
appropriate to derive a representative value for deals that are priced The vessel arrival draught shall not exceed 11.5m and the vessel
on a fixed/floating price basis and consider such deals as warranted age shall not exceed 25 years. Payment for the cargo is to be made
in its assessments. within 20 days from the vessel’s tendered Notice of Readiness
(NOR).
South China cfr
Specification: refrigerated cargoes are of field grade quality. Prices Argus East China cfr Index (propane and butane)
are for a single, mixed cargo. Specification: refrigerated cargoes are as per original supplier’s
Size: 23,000t cargoes divided equally between propane and butane guaranteed specification
Location: for delivery into Shenzen and Zhuhai in the Guangdong Size: 15,000-23,000t cargoes
province of south China Location: for delivery into Ningbo, in Zhejiang province
The assessment is an average price for the period 25-40 days from The assessment is an average price for the period 25-40 days from
the publication date. Argus will make a price assessment for each the publication date. Argus will make a price assessment for each
of the days in the 25-40 day forward period taking into account the of the days in the 25-40 day forward period taking into account the
price structure of the physical market. Physical prices are discussed price structure of the physical market. Physical prices are discussed
in the market for different delivery periods in the 25-40 day forward in the market for different delivery periods in the 25-40 day forward
period. The delivery periods are usually discussed as the first half period. The delivery periods are usually discussed as the first half
and the second half of the month. So the Argus assessment for and the second half of the month. So the Argus assessment for the
25-40 day forward period, should prices be flat for each of these de- 25-40 day forward period, should prices be flat for each of these de-
livery periods, will be proportionate to the number of days for each livery periods, will be proportionate to the number of days for each
half month delivery period within the 25-40 day forward period. half-month delivery period within the 25-40 day forward period.

In recent years, it has become common for participants in the Asian The East China cfr assessment considers cargoes of worldwide ori-
cfr market to transact deals that include both a fixed price and float- gin, including Iran. The assessment considers bids, offers and deals
ing price component. For example, deals that are a 50:50 average for a laycan of a minimum of five days within the 25-40 day forward
of the Far East Index and a fixed price, are common. In such cases, period and a laytime of up to 48 hours for one safe port. The vessel
Argus will use a variety of techniques to determine the value of the arrival draught shall not exceed 11.5m and the vessel age shall not
deal so that it can be considered in Argus’ assessments. exceed 25 years. Payment for the cargo is to be made within 20
days from the vessel’s tendered Notice of Readiness (NOR).
The techniques include examining the forward structure of the LPG
swaps market, considering the value of the fixed portion of the deal

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Methodology and specifications guide November 2019

Propane pressurised Butane pressurised

South China CP fob South China CP fob

Timing: CP basis is the month’s CP (Saudi Contract Price) that is Timing: CP basis is the month’s CP (Saudi Contract Price) that is
the underlying price for the CP differential. Period is the timing of lift- the underlying price for the CP differential. Period is the timing of lift-
ing or delivery. For pressurised cargoes (CP plus), the roll date from ing or delivery For pressurised cargoes (CP plus), the roll date from
one month loading to the next will occur on the 20th of the previous one month loading to the next will occur on the 20th of the previous
month. month.
Size: 1,500-2,500t
Location: for loading from Zhuhai, Shenzhen and Dongguan, south Size: 1,500-2,500t
China Location: for delivery from Zhuhai, Shenzhen and Dongguan, outh
Specification: pressurised cargoes are for deliveries of propane China.
from 30-50:50-70 propane:butane cargoes. Specification: pressurised cargoes are for deliveries of butane
from 30-50:50-70 propane:butane cargoes.
South China fob
Size: 1,500-2,500t South China fob
Location: loading from Zhuhai, Shenzhen and Dongguan, south Size: 1,500-2,500t
China Location: for loading from Zhuhai, Shenzhen and Dongguan, south
Timing: for pressurised cargoes fob, the loading window is 5-20 China
days from the date of publication. Timing: for pressurised cargoes fob, the loading window is 5-20
Specification: pressurised cargoes are for deliveries of propane days from the date of publication.
from 30-50:50-70 propane:butane cargoes Specification: pressurised cargoes are for deliveries of butane
from 30-50:50-70 propane:butane cargoes
South China CP cfr
Timing: CP basis is the month’s CP (Saudi Contract Price) that is South China CP cfr
the underlying price for the CP differential. Period is the timing of Timing: CP basis is the month’s CP (Saudi Contract Price) that is
lifting or delivery. For pressurised cargoes cfr the delivery window is the underlying price for the CP differential. Period is the timing of
7-15 days from the date of publication. For pressurised cargoes (CP lifting or delivery. For pressurised cargoes cfr, the delivery window is
plus), the roll date from one month delivery to the next will occur on 7-15 days from the date of publication. For pressurised cargoes (CP
the 20th of the previous month. plus), the roll date from one month delivery to the next will occur on
Size: 1,500 to 2,500t the 20th of the previous month
Location: for delivery into Zhuhai and Sherkou, south China Size: 1,500-2,500t size
Specification: pressurised cargoes are for deliveries of propane Location: for delivery into Zhuhai and Sherkou, south China
from either 20:80 or 30:70 propane:butane cargoes Specification: pressurised cargoes are for deliveries of butane
from either 20:80 or 30:70 propane:butane cargoes
South China cfr
Size: 1,500-2,500t South China cfr
Location: delivery into Zhuhai and Sherkou, south China Size: 1,500-2,500t
Timing: for pressurised cargoes cfr, the delivery window is 12-20 Location: for delivery into Zhuhai and Sherkou, south China
days from the date of publication Timing: for pressurised cargoes cfr, the delivery window is 12-20
Specification: pressurised cargoes are for deliveries of propane days from the date of publication
from either 20:80 or 30:70 propane:butane cargoes Specification: pressurised cargoes are for deliveries of butane
from either 20:80 or 30:70 propane:butane cargoes
Vietnam CP cfr
Size: 1,000-2,500t Vietnam CP cfr
Location: for delivery into Hai Phong, north Vietnam Size: 1,000-2,500t
Timing: the delivery window is 12-20 days from the date of publica- Location: for delivery into Hai Phong, north Vietnam
tion Timing: for pressurised cargoes cfr, the delivery window is 12-20
Specification: Pressurised cargoes are for deliveries of 30-50:50- days from the date of publication. For pressurised cargoes (CP
70 propane:butane cargoes. For pressurised cargoes (CP plus), the plus), the roll date from one month delivery to the next will occur on
roll date from one month delivery to the next will occur on the 15th of the 15th of the previous month
the previous month Specification: pressurised cargoes are for deliveries of 30-50:50-
70 propane:butane cargoes.

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Methodology and specifications guide November 2019

China wholesale propane/butane mix Africa LPG indexes

Prices are published in yuan/tonne. Specification is propane-butane South Africa LPG index
mix. Prices are in US dollars/tonne. The South Africa LPG index is the
calculated value of LPG cargoes delivered to Richards Bay, South
East China Africa, including logistics costs and the underlying prices of pro-
pane and butane exported from the Middle East.
Ex-terminal
• Ningbo Calculated as the Argus Middle East Index for propane and butane
• Wenzhou in a ratio of 60:40, plus freight from Ras Tanura to Richards Bay,
• Taicang the cost of bunker fuel, port and brokerage fees and ship-to-ship
• Shanghai transfer costs.
• Zhangjiagang
• Fujian Calculation components:
All calculation components are updated daily, unless specified.
Ex refinery • Propane Argus Middle East Index
• Shanghai • Butane Argus Middle East Index
• Zhenhai • Fuel oil bunker 380cst Fujairah ($/t) – see the Argus Asia-
• Yangzi Pacific Products methodology.
• Fujian • USD/ZAR exchange rate – sourced by Argus at 11am London
• Gaoqiao time. When unavailable owing to a London holiday, the last
• Qingdao available rate is used.
• Time-charter rate for 35,000-38,000m³ vessels – basis 12
South China months (updated weekly). Argus updates this rate weekly, in
consultation with the market.
Ex terminal • South Africa flat port fee – updated annually, on or around 1
• Zhuhai April by Transnet National Ports Authority. Port fees are subject
• Shenzhen to VAT.
• Raoping • South Africa daily port fee – updated annually, on or around 1
• Nansha April by Transnet National Ports Authority. Port fees are subject
• Shantou to VAT.
• Yangjiang • Ras Tanura port fees – according to the Kingdom of Saudi
Arabia General Corporation of Ports
Ex refinery • Ship-to-ship transfer cost – updated at least annually on or
• Maoming around 1 April, in consultation with the market.
• Guangzhou • The resulting delivered South Africa LPG Index is published
daily according to the Singapore publishing schedule. Argus
Northeast China also publishes a month-to-date average of the index.

Ex refinery Butane, delivered west Africa

• Daqing Prices are in US dollars/tonne. The butane, delivered west Africa as-
• Dalian sessment is the calculated value of butane cargoes delivered to La-
Northwest China gos, Nigeria, and is calculated as the lowest of two derived values.

Ex refinery Northwest Europe butane delivered west Africa

• Urumuqi Calculated as the Argus cif ARA large cargo butane price assess-
ment plus a weekly assessment of freight and an annual assess-
Inland China ment of other logistics costs for the Rotterdam-Lagos route.

Ex refinery US Gulf coast butane delivered west Africa

• Lanzhou Calculated as the Argus USGC butane fob price assessment plus
• Yan-An a weekly assessment of freight and an annual assessment of other
logistics costs for the Houston-Lagos route.

See the NGL Americas methodology for the description of the

USGC butane price assessment.

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Methodology and specifications guide November 2019

LPG 15:85 delivered east Africa US Enterprise averages

Prices are in US dollars/tonne. The LPG 15:85 delivered east Africa
assessment is the calculated value of a mixed cargo of propane • Propane
and butane delivered to Mombasa, Kenya, and is calculated as the • Butane
weighted sum of two derived values.
US forward market
Propane delivered east Africa * 0.15 + butane delivered east Africa
* 0.85 Mont Belvieu
The Mont Belvieu propane and butane forward curves are the value
Propane delivered east Africa of the swap futures markets at the time of the Nymex close, typically
Calculated as the Propane Argus Middle East Index plus a weekly 2:30pm New York time. The bid is the highest available bid. The of-
assessment of freight and an annual assessment of other logistics fer is the lowest available offer. The mean is the midpoint of the two.
costs for the Ras Tanura-Mombasa route.

Butane delivered east Africa LNG assessments

Calculated as the Butane Argus Middle East Index plus a weekly
assessment of freight and an annual assessment of other logistics Argus International LPG includes a weekly northwest Europe small-
costs for the Ras Tanura-Mombasa route. scale LNG free on truck price assessment, published on Thursday
in energy (€/MWh) and tonnes of propane equivalent ($/t propane
Timing equivalent).
Indexes are calculated and published daily, except on days when
Singapore, London or US price assessments are not produced. See the Argus LNG Daily methodology for details.

The conversion to tonnes of propane equivalent is based on a pro-

Americas pane energy content of 50.4MJ/kg.

A full methodology for the Americas assessments published in

Argus International LPG can be found in the Argus NGL Americas
methodology.

Mont Belvieu pipeline fob

Enterprise
• Propane
• Propane equivalent ($/t): prices are in US dollars/tonne. The
conversion factor is 522.3 USG/t
• Butane
• Butane equivalent ($/t):prices are in US dollars/tonne. The
conversion factor is 453 USG/t
• Purity ethane
• Purity ethane $/t equivalent: prices are in US dollars/tonne.
The conversion factor is 737.99 USG/t
• Ethane-propane mix
• Isobutane
• Natural gasoline
• USGC export fob, diff to Mont Belvieu
• USCG export fob ($/t)

LST
• Propane
• Butane

Targa
• Propane
• Purity Ethane

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