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 18
Americas 18
LNG assessments 19

Updated: may 2019

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

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Methodology and specifications guide May 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
Official selling price of Sonatrach for butane for the listed month. • Propane VLGC Houston-Chiba
• Propane VLGC Houston-Flushing
Saudi Aramco • Handysize Houston-east coast Mexico

Propane See the Argus NGL Americas methodology.

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. In the absence of outright price indications, Argus may assess butane
Floating-price trades will be considered for inclusion in the assessment prices on a percentage of naphtha basis.
after conversion to a fixed-price fob basis using the relevant published
Argus price assessment on the day of trade and, if necessary, a freight In the absence of assessment-relevant trade, and in the event that
differential to normalise cif trades to a fob ARA basis. only assessment-relevant bids or offers are available in the market
at the time of assessment or if the spread between assessment-
fca ARA (rail) relevant orders is greater than $6/t, Argus will typically include a $6/t
Size: rail is for 400-600t spread between bids and offers in the assessment process.
Basis: fca (rail) ARA
Timing: railcars lifting 2-10 days forward In these cases, Argus may narrow that default $6/t spread for
Specification: the fca (rail) ARA assessment includes commercial and reasons including but not limited to the preservation of the accuracy
ex-terminal material. Sulphur content of no more than 50ppm. and/or representativeness of the midpoint price or in consideration
of other relevant market information.
cif Mediterranean (large)
Size: large cargoes are 5,000-20,500t fob northwest Europe (small)
Basis: cif Lavera Size: small cargoes (coasters) are up to 6,000t
Timing: cargoes for delivery 3-15 days forward Basis: fob northwest Europe
Specification: the large cargo propane assessment is for field grade Timing: cargoes for lifting 3-15 days forward
(95pc) propane, fully refrigerated. Specification: the fob northwest Europe small cargo assessment
is for pressurised vessels, up to 30pc olefins. Sulphur content of no
fob Mediterranean (small) more than 50ppm. Timestamp is 4:30pm London time.
Size: small cargoes (coasters) are up to 2,000t
Basis: fob Lavera cif ARA (small)
Timing: cargoes for lifting 3-15 days forward Size: small cargoes (coasters) are 1,800-2,500t
Specification: the small cargo assessment is for commercial grade. Basis: cif ARA
Small cargo (coasters) are pressurised vessels. Timing: cargoes for delivery 3-15 days forward
Specification: the cif northwest Europe small cargo assessment is for
fca Mediterranean (rail) pressurised vessels, up to 30pc olefins. Sulphur content of no more
Size: rail is 400-600t than 50ppm.
Basis: fca (rail) Lavera Floating-price trades will be considered for inclusion in the assess-
Timing: railcars lifting 2-10 days forward ment after conversion to a fixed-price fob basis using the relevant
Specification: railcars are for commercial grade published Argus price assessment on the day of trade.

Propane averages fob ARA (barge)

Size: barges are up to 1,200t
cif ARA large cargo Basis: fob ARA
The Argus cif ARA large cargo assessment is the arithmetic average of Timing: barges for lifting 2-10 days forward
the prices published every day in a month. Specification: the fob barge 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 assess- • daf Brest propane
ment after conversion to a fixed-price fob basis using the relevant • daf Ukraine propane-butane mix.
published Argus price assessment on the day of trade. • Argus daf Ukrainian-Romanian border propane-butane mix
• fot Burgas (Lukoil posted) propane-butane mix
fca ARA (rail) • daf Bekabad propane-butane mix
Size: rail is for 400-600t
Basis: fca (rail) ARA Argus Polish Domestic Index (APDI™) price:
Timing: railcars lifting 2-10 days forward Basis: fca Plock
Specification: the fca (rail) ARA assessment includes commercial and Specification: the product contains on average 50pc propane and
ex-terminal material. Sulphur content of no more than 50ppm. 50pc butane.

cif Mediterranean (large) The APDI price is an assessment for the domestic Polish market
Size: large cargoes are 5,000-20,500t. calculated on deliveries to Poland from the ARA region through
Basis: cif Lavera sea terminals and by rail from the eastern and former Soviet Union
Timing: cargoes for delivery 3-15 days forward regions. The calculation is as follows:
Specification: the large cargo butane assessment is for field grade
mixed butane (minimum 20pc isobutane content), fully refrigerated. APDI= [(ADBM*65% + ADBP*10% + (CAL + F)*5%) + (LOG/$)]
+20%OG/$, where:
fob Mediterranean (small) • ADBM = average Argus daf Brest for mix
Size: small cargoes (coasters) are up to 2,000t • ADBP = average Argus daf Brest for Propane
Basis: fob Lavera • CAL = average cif ARA for Propane
Timing: for cargoes for lifting 3-15 days forward • F = sea freight from ARA to Stettin (is taken for 2016 as $60/mt)
Specification: small cargo assessments are for commercial grade. • LOG = total average logistics costs from daf and to Plock (is
Small cargo (coasters) are pressurised vessels. taken for 2016 as 190 PLN/t)
• $ = exchange rate PLN/USD
Butane averages • OG = Orlen Gaz quotation (with 0 logistics cost)

cif ARA large cargo Logistics and freight costs are revised on an annual basis.
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
The Argus fob ARA barge assessment is the running average in Propane northwest Europe
which the last data point will be assumed to be the data point for the Swaps in northwest Europe are for 12 months, four quarters and
remaining days of the month. 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-
Crude ing day after the 15th of the second month of the quarter. Calendar
year swaps roll on the first working day after the 15th of the sixth
Argus North Sea Dated month of the year. Timestamp is 4:15-4:30pm London time.
Prices are in US dollars/barrel. See the Argus Crude methodology.
Prices for the first and/or second forward month, depending on
Ice Brent futures settlement which is used as the floating price component of physical trade, are
Prices are in US dollars/barrel. Prices are the settlement prices for the calculated as a volume-weighted average of trade, rounded to the
IntercontinentalExchange’s Brent contract for three months forward. nearest 25¢/t, with a minimum 2,000t transaction size.

Naphtha northwest Europe

FSU Swaps in northwest Europe are for 12 months, four quarters and
one calendar year forward. The front month rolls on the first working
A full methodology for the FSU assessments published in Argus day after the 15th of the month. Swap quarters roll on the first work-
International LPG can be found in the Argus Russian LPG and Con- ing day after the 15th of the month before the start of the quarter.
densate methodology. Calendar year swaps roll on the first working day after the 15th of
the sixth month of the year. Timestamp is 4.30pm London time.
Argus International LPG includes prices for
• fob Black Sea propane Propane CP Middle East
• fob Black Sea butane The minimum swap volume for the CP swaps is 1,000t. Propane
• fob Black Sea propane-butane mix contract price swaps are assessed twice each day, at a 5pm Singa-
• daf Brest propane-butane mix pore timestamp and a 4.30pm London timestamp.

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Prices are assessed for three months of the Contract Price (CP) at East-West
the 5pm Singapore timestamp. Prices are in US dollars/tonne. The Argus Far East Index propane
swap minus the cif ARA propane swap.
Prices are assessed for 12 months, four quarters and one calendar
year of the Contract Price (CP) at the 4.30pm London timestamp. The Arb
Prices are in US dollars/tonne. The Mont Belvieu propane swap
The front month rolls on the first working day on which the new CP minus the cif ARA propane swap.
is available. For example, if the October CP is issued on 29 Septem-
ber, the swaps front month will roll from October to November that Mont Belvieu-AFEI
day. Swap quarters roll on the first working day after the 15th of the Prices are in US dollars/tonne. The Mont Belvieu propane swap
second month of the quarter. Calendar year swaps roll on the first minus the Argus Far East Index propane swap.
working day after the 15th of the sixth month of the year.
AFEI-CP
Argus Far East Index Prices are in US dollars/tonne. The Argus Far East Index propane
The minimum swap volume for the Argus Far East Index swaps is swap minus the CP propane swap.
1,000t.

Argus Far East Index propane swaps prices are assessed twice each Middle East and Asia-Pacific averages
day, at a 5pm Singapore timestamp and a 4.30pm London timestamp.
Prices are assessed for three months of the Argus Far East Index at Middle East averages
the 5pm Singapore timestamp.
Propane
Prices are assessed for 12 months, four quarters and one calendar The Argus Middle East fob average is the average of the spot premium
year of the Argus Far East Index at the 4.30pm London timestamp. for additional Saudi volumes trading out of Yanbu and Ras Tanura
The front month rolls on the first working day after the 15th of the which is calculated on a monthly basis and which rolls on the 1st of the
month. Swap quarters roll on the first working day after the 15th of month. So on the 1st of January, Argus will begin quoting a cumulative
the second month of the quarter. Calendar year swaps roll on the average for January.
first working day after the 15th of the sixth month of the year.
Butane
Mont Belvieu LST The Argus Middle East fob average is the average of the spot premium
Prices are in US dollars/tonne converted from US cents/gallon. for additional Saudi volumes trading out of Yanbu and Ras Tanura
Mont Belvieu propane swaps assessments are for 12 months, four which is calculated on a monthly basis and which rolls on the 1st of the
quarters and one calendar year. The front month rolls on the first month. So on the 1st of January, Argus will begin quoting a cumulative
working day after the 15th of the month. Swap quarters roll on the average for January.
first working day after the 15th of the second month of the quarter.
Calendar year swaps roll on the first working day after the 15th of Argus Middle East Index averages
the sixth month of the year. Timestamp is 4.30pm London time.
Propane
Spreads The Argus Middle East Index average is the average of propane
spot prices trading out of the Mideast Gulf, which is calculated on
M1 diff to physical a monthly basis and which rolls on the 1st of the month. So on the
Prices are in US dollars/tonne. This is the difference between the 1st of January, Argus will begin assessing a cumulative average for
assessed physical or wet value and the front month swap. January.

• Cif ARA propane minus cif ARA propane swap Butane

• Cif northwest Europe naphtha minus European naphtha swap The Argus Middle East Index average is the average of butane
• Fob Middle East Gulf propane minus CP swap spot prices trading out of the Mideast Gulf, which is calculated on
• Argus Far East Index propane minus Argus Far East Index a monthly basis and which rolls on the 1st of the month. So on the
propane swap 1st of January, Argus will begin assessing a cumulative average for
• Mont Belvieu LST propane mean of high/low minus Mont January.
Belvieu propane swap
Argus Far East Index
Propane-naphtha
Prices are in US dollars/tonne. The cif ARA propane swap minus the Propane
European naphtha swap. The Argus Far East Index average is accumulated on a calendar
month basis, rolling on the first working day of the month. For de-
tails of the Argus Far East Index methodology see page 13.

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Butane and the second half of the month. So the Argus assessment for
The Argus Far East Index average is accumulated on a calendar 25-40 day forward period, should prices be flat for each of these de-
month basis, rolling on the first working day of the month. For de- livery periods, will be proportionate to the number of days for each
tails of the Argus Far East Index methodology see page 15. half month delivery period within the 25-40 day forward period.

11+11 propane-butane mix In recent years, it has become common for participants in the Asian
The 11+11 propane-butane mix average is accumulated on a cal- cfr market to transact deals that include both a fixed price and floating
endar month basis, rolling on the first working day of the month. For price component. For example, deals that are a 50:50 average of the
details of the 11+11 propane-butane mix methodology see page 16. Far East Index and a fixed price, are common. In such cases, Argus
will use a variety of techniques to determine the value of the deal so
that it can be considered in Argus’ assessments. The techniques
Asia-Pacific include examining the forward structure of the LPG swaps market,
considering the value of the fixed portion of the deal and using other
All prices are assessed at 5pm Singapore time. analytical techniques employed by the industry to derive a fair value
for the deal. Argus will use these techniques as appropriate to derive
Propane a representative value for deals that are priced on a fixed/floating
price basis and consider such deals as warranted in its assessments.
Argus Middle East Index
Timing: period is the timing of lifting The Argus Middle East Index Taiwan CP cfr
will roll from one month loading to the next on the 1st of the month. Timing: Period is the timing of lifting or delivery. CP basis is the
Specificaiton: refrigerated cargoes are of field grade quality month’s CP (Saudi Contract Price) that is the underlying price for
Size: 45,000-47,000t cargoes the CP differential. For refrigerated cargoes cfr Taiwan (CP Plus), the
Location: loading at Ras Tanura, Yanbu, Ras Laffan, Ruwais, Das roll date from first-half month delivery to second-half month delivery
Island and Mina al Ahmadi will occur on the 10th of the previous month. The roll date from
second-half month delivery to first-half month delivery will occur on
Gulf CP fob the 25th of the previous month.
Timing: CP basis is the month’s CP (Saudi Contract Price) that is Specification: refrigerated cargoes are of field grade quality.
the underlying price for the CP differential. Period is the timing of Size: 22,000t cargoes
lifting or delivery. The fob Mideast Gulf roll date from one month Location: for delivery to Kaohsiung (Taiwan)
loading to the next will occur on the 1st of the month.
Specification: refrigerated cargoes are of field grade quality. East China 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 China (CP Plus), the
roll date from first-half month delivery to second-half month delivery
Japan CP cfr will occur on the 25th 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 lift- the 10th of the month.
ing or delivery. For refrigerated cargoes cfr Japan (CP plus), the roll Specification: refrigerated cargoes are of field grade quality.
date from first-half month delivery to second-half month delivery will Size: 22,000t cargoes
occur on the 10th of the previous month. The roll date from second- Location: for delivery into Shanghai and Taicang in the Jiangsu
half month delivery to first-half month delivery will occur on the 25th Province for east China
of the previous month
Specification: refrigerated cargoes are of field grade quality East China cfr
Size: 22,000t cargoes Specification: refrigerated cargoes are of field grade quality
Location: for delivery to Kawasaki/Chiba (Japan) Size: 23,000t cargoes
Location: for delivery into Shanghai and Taicang in the Jiangsu
Japan cfr Province of east China.
Specification: refrigerated cargoes are of field grade quality Timing: 25-40 days from the publication date
Size: 23,000t cargoes
Location: for delivery to Kawasaki/Chiba (Japan) In recent years, it has become common for participants in the Asian
The assessment is an average price for the period 25-40 days from CFR market to transact deals that include both a fixed price and
the publication date. Argus will make a price assessment for each floating price component. For example, deals that are a 50:50 aver-
of the days in the 25-40 day forward period taking into account the age of the Far East Index and a fixed price, are common. In such
price structure of the physical market. Physical prices are discussed cases, Argus will use a variety of techniques to determine the value
in the market for different delivery periods in the 25-40 day forward of the deal so that it can be considered in Argus’ assessments.
period. The delivery periods are usually discussed as the first half The techniques include examining the forward structure of the LPG

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swaps market, considering the value of the fixed portion of the deal For the purposes of assessing the Far East Index for propane Argus
and using other analytical techniques employed by the industry to establishes a viable buy-sell range at the timestamp. To accomplish
derive a fair value for the deal. Argus will use these techniques as this, Argus considers a wide range of information, including bids
appropriate to derive a representative value for deals that are priced and offers, transactions, informed market views and the perfor-
on a fixed/floating price basis and consider such deals as warranted mance of other related markets.
in its assessments.
Market information may not be consistent regarding prevailing price
South China CP cfr levels so if contradictory information regarding a viable buy-sell range
Timing: Period is the timing of lifting or delivery. CP basis is the is in the market Argus will give the greatest weight to deals for cargoes
month’s CP (Saudi Contract Price) that is the underlying price for that conform to Argus’ published specification done in the run up to the
the CP differential. For refrigerated cargoes cfr China (CP Plus) the timestamp (currently 5:00pm Singapore time).For inclusion in the FEI,
roll date from first-half month delivery to second-half month delivery deals must be judged by Argus to be repeatable and representative.
will occur on the 25th of the previous month. The roll date from
second-half month delivery to first-half month delivery will occur on All bids, offers and deals to be included for Argus assessment are
the 10th of the month. to conform to Ginga standard terms.
Specification: refrigerated cargoes are of field grade quality
Size: 22,000t cargoes For the purpose of the Argus Far East Index assessment, the south
Location: for delivery into Shenzen and Zhuhai in the Guangdong China cfr price that makes up 50pc of the AFEI assessment is set
Province for south China at parity to the Japan cfr price assessment. This is in line with cur-
rent industry practice as China purchases do not conform to the
South China cfr standard traded contract in the region, which is currently the Ginga
Specification: refrigerated cargoes are of field grade quality contract. Argus will keep under review the standard traded contract
Size: 23,000t cargoes terms for the region and institute amendments to the AFEI method-
Location: for delivery into Shenzen and Zhuhai in the Guangdong ology as and when necessary.
Province of south China
Timing: the assessment is an average price for the period 25-40 Bid and offers must be firm, made in the open market, not subject to
days from the publication date. Argus will make a price assessment special conditions and be valid for a period of time during which a deal
for each of the days in the 25-40 day forward period taking into ac- could reasonably be transacted. Similarly if a firm bid and/or offer is
count the price structure of the physical market. Physical prices are made after a deal but before the timestamp, Argus will consider this bid
discussed in the market for different delivery periods in the 25-40 and/or offer if it is found to be representative. This bid and/or offer may
day forward period. The delivery periods are usually discussed as be viewed by Argus as being more representative of the market at the
the first half and the second half of the month. So the Argus assess- timestamp than a single non-repeatable deal and may be used as the
ment for 25-40 day forward period, should prices be flat for each of basis for the price assessment. In the absence of any firm bids and/
these delivery periods, will be proportionate to the number of days or offers, Argus shall use inputs from its regular market surveys, plus
for each half month delivery period within the 25-40 day forward any other inputs from brokers, market participants or market portals, to
period. establish a valid buy-sell range. This buy-sell range shall be determined
using informed market opinions and other indicators judged by Argus
In recent years, it has become common for participants in the Asian to be indicative of market values.
cfr market to transact deals that include both a fixed price and
floating price component. For example, deals that are a 50:50 aver- Argus will review swaps and other derivatives markets with an eye
age of the Far East Index and a fixed price, are common. In such toward determining forward market structure and direction. Argus
cases, Argus will use a variety of techniques to determine the value will also refer to the swaps markets to evaluate the outright value of
of the deal so that it can be considered in Argus’ assessments. floating prices deals that are reported.
The techniques include examining the forward structure of the LPG
swaps market, considering the value of the fixed portion of the deal Market structure
and using other analytical techniques employed by the industry to The Argus LPG assessments are for cargoes delivered to destination
derive a fair value for the deal. Argus will use these techniques as ports 25-40 days forward from the date of assessments. It is usual
appropriate to derive a representative value for deals that are priced that part of this assessment period would be determined by market
on a fixed/floating price basis and consider such deals as warranted prices for one delivery period, and another part would be determined
in its assessments. by different delivery period. In such cases, Argus will pro-rate the
values of the relevant delivery periods. A spreadsheet detailing these
Argus Far East Index (propane) inputs is available on a daily basis from Argus on request.
The Argus Far East Index is the average of the Argus Japan cfr pro-
pane quotation and the Argus South China cfr propane quotation. A significant volume of the LPG trade in the eastern LPG markets
No minimum data transaction threshold exists as this is the average consists of mixed cargoes that include approximately 11,000t each
of other assessments. of propane and butane. These cargoes typically are traded at a
single price representing the value of both components.

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In the absence of market indicators for 23,000t cargoes of propane or Japan cfr
butane, Argus will include 11,000t + 11,000t (known as 11-11) deals Specification: refrigerated cargoes are of field grade quality
and bid/offer ranges in its assessments. This means that the midpoint Size: 23,000t cargoes
value of 11-11 deals will be used and an informed consensus differ- Location: for delivery into Kawasaki/Chiba (Japan)
ential between propane and butane prices used to calculate individual The assessment is an average price for the period 25-40 days from
propane and butane values from the 11,000t + 11,000t midpoint value. 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
If there is any discrepancy between 23,000t and mixed cargoes price structure of the physical market. Physical prices are discussed
then the 23,000t price will set the Argus price quotation for 23,000t in the market for different delivery periods in the 25-40 day forward
propane and 23,000t butane. period. The delivery periods are usually discussed as the first half
and the second half of the month. So the Argus assessment for
Butane 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
Argus Asia-Pacific butane assessments half month delivery period within the 25-40 day forward period.
Argus will assess 22,000t butane prices in the following manner.
During the periods of time when butane demand from the petro- In recent years, it has become common for participants in the Asian
chemical sector is absent, Argus will assess butane prices as a cfr market to transact deals that include both a fixed price and floating
price differential against propane prices, with the differential being price component. For example, deals that are a 50:50 average of the
obtained based on an informed consensus. Far East Index and a fixed price, are common. In such cases, Argus
will use a variety of techniques to determine the value of the deal so
Such a price differential can be obtained through a variety of channels. that it can be considered in Argus’ assessments. The techniques
This includes deriving from 11+11 quotes where a midpoint value of include examining the forward structure of the LPG swaps market,
11+11 is being used in combination with an informed consensus price considering the value of the fixed portion of the deal and using other
spread between propane and butane, to derive butane values. analytical techniques employed by the industry to derive a fair value
for the deal. Argus will use these techniques as appropriate to derive
During the periods of time when butane demand from the petro- a representative value for deals that are priced on a fixed/floating
chemical sector prevails, Argus may assess butane prices based on price basis and consider such deals as warranted in its assessments.
an economic relationship to naphtha prices.
Taiwan CP cfr
Argus Middle East Index Timing: CP basis is the month’s CP (Saudi Contract Price) that is the
Timing: period is the timing of lifting. The Argus Middle East Index underlying price for the CP differential. Period is the timing of lifting or
will roll from one month loading to the next on the 1st of the month delivery. For refrigerated cargoes cfr Taiwan (CP Plus), the roll date from
Specification: refrigerated cargoes are of field grade quality first-half month delivery to second-half month delivery will occur on the 10th
Size: 45,000-47,000t cargoes of the previous month. The roll date from second-half month delivery to
Location: loading at Ras Tanura, Yanbu, Ras Laffan, Ruwais, Das first-half month delivery will occur on the 25th of the previous month.
Island and Mina al Ahmadi Specification: Refrigerated cargoes are of field grade quality.
Size: 22,000t cargoes for delivery to Kaohsiung (Taiwan)
Gulf CP fob
Timing: CP basis is the month’s CP (Saudi Contract Price) that is East 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. The fob Mideast Gulf roll date from one month the underlying price for the CP differential. Period is the timing of lifting
loading to the next will occur on the 1st of the month. or delivery. For refrigerated cargoes cfr China (CP Plus), the roll date
Specification: refrigerated cargoes are of field grade quality from first-half month delivery to second-half month delivery will occur on
Size: 45,000-47,000t cargoes the 25th of the previous month. The roll date from second-half month
Location: loading at Ras Tanura, Yanbu, Ras Laffan, Ruwais, Das delivery to first-half month delivery will occur on the 10th of the month.
Island and Mina al Ahmadi Specification: refrigerated cargoes are of field grade quality
Size: cfr east China are for 22,000t cargoes
Japan CP cfr Location: for delivery into Shanghai and Taicang in the Jiangsu
Timing: CP basis is the month’s CP (Saudi Contract Price) that is the un- Province for east China
derlying price for the CP differential. Period is the timing of lifting or delivery.
For refrigerated cargoes cfr Japan (CP plus), the roll date from first-half East China cfr
month delivery to second-half month delivery will occur on the 10th of the Specification: refrigerated cargoes are of field grade quality
previous month. The roll date from second-half month delivery to first-half Size: 23,000t cargoes
month delivery will occur on the 25th of the previous month. Location: delivery into Shanghai and Taicang in the Jiangsu Prov-
Specification: refrigerated cargoes are of field grade quality ince of east China
Size: 22,000t cargoes Timing: 25-40 days from the publication date
Location: for delivery to Kawasaki/Chiba (Japan)

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In recent years, it has become common for participants in the Asian West coast India CP cfr
cfr market to transact deals that include both a fixed price and floating Timing: CP basis is the month’s CP (Saudi Contract Price) that is
price component. For example, deals that are a 50:50 average of the the underlying price for the CP differential. Period is the timing of
Far East Index and a fixed price, are common. In such cases, Argus lifting or delivery. For refrigerated cargoes cfr India (CP Plus), the roll
will use a variety of techniques to determine the value of the deal so date from one month delivery to the next will occur on the 25th of
that it can be considered in Argus’ assessments. The techniques the previous month.
include examining the forward structure of the LPG swaps market, Specification: refrigerated cargoes are of field grade quality
considering the value of the fixed portion of the deal and using other Size: 10,000-15,000t cargoes
analytical techniques employed by the industry to derive a fair value Location: for delivery into Kandla and Mangalore on the west coast
for the deal. Argus will use these techniques as appropriate to derive of India
a representative value for deals that are priced on a fixed/floating
price basis and consider such deals as warranted in its assessments. Argus Far East Index (butane)
The Argus Far East Index is the average of the Argus Japan cfr
South China CP cfr butane assessment and the Argus South China cfr butane assess-
Timing: CP basis is the month’s CP (Saudi Contract Price) that is ment. No minimum data transaction threshold exists as this is the
the underlying price for the CP differential. Period is the timing of lift- average of other assessments.
ing or delivery. For refrigerated cargoes cfr China (CP Plus), the roll
date from first-half month delivery to second-half month delivery will For the purposes of assessing the Far East Index for butane, Argus
occur on the 25th of the previous month. The roll date from second- establishes a viable buy-sell range at the timestamp. To accomplish
half month delivery to first-half month delivery will occur on the 10th this, Argus considers a wide range of information, including bids
of the month. and offers, transactions, informed market views and the perfor-
Specification: refrigerated cargoes are of field grade quality mance of other related markets.
Size: 22,000t cargoes
Location: for delivery into Shenzen and Zhuhai in the Guangdong Market information may not be consistent regarding prevailing price
province for south China 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 cfr for cargoes that conform to Argus’ published specification done in
Specification: refrigerated cargoes are of field grade quality the run up to the timestamp. For inclusion in the FEI, deals must be
Size: 23,000t cargoes judged by Argus to be repeatable and representative.
Location: for delivery into Shenzen and Zhuhai in the Guangdong
province of south China All bids, offers and deals to be included for Argus assessment are
The assessment is an average price for the period 25-40 days from to conform to Ginga standard terms.
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 For the purpose of the Argus Far East Index assessment, the south
price structure of the physical market. Physical prices are discussed China cfr price that makes up 50pc of the AFEI assessment is set
in the market for different delivery periods in the 25-40 day forward at parity to the Japan cfr price assessment. This is in line with cur-
period. The delivery periods are usually discussed as the first half rent industry practice as China purchases do not conform to the
and the second half of the month. So the Argus assessment for standard traded contract in the region, which is currently the Ginga
25-40 day forward period, should prices be flat for each of these de- contract. Argus will keep under review the standard traded contract
livery periods, will be proportionate to the number of days for each terms for the region and institute amendments to the AFEI method-
half month delivery period within the 25-40 day forward period. ology as and when necessary.

In recent years, it has become common for participants in the Asian Bid and offers must be firm, made in the open market, not subject to
cfr market to transact deals that include both a fixed price and floating special conditions and be valid for a period of time during which a
price component. For example, deals that are a 50:50 average of the deal could reasonably be transacted. Similarly if a firm bid and/or of-
Far East Index and a fixed price, are common. In such cases, Argus will fer is made after a deal but before the timestamp, Argus will consider
use a variety of techniques to determine the value of the deal so that this bid and/or offer if it is found to be representative. This bid and/
it can be considered in Argus’ assessments. The techniques include or offer may be viewed by Argus as being more representative of the
examining the forward structure of the LPG swaps market, consider- market at the timestamp than a single non-repeatable deal and may
ing the value of the fixed portion of the deal and using other analytical be used as the basis for the price assessment. In the absence of any
techniques employed by the industry to derive a fair value for the deal. firm bids and/or offers, Argus shall use inputs from its regular market
Argus will use these techniques as appropriate to derive a representa- surveys, plus any other inputs from brokers, market participants or
tive value for deals that are priced on a fixed/floating price basis and market portals, to establish a valid buy-sell range. This buy-sell range
consider such deals as warranted in its assessments. shall be determined using informed market opinions and other indica-
tors judged by Argus to be indicative of market values.

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Argus will review swaps and other derivatives markets with an eye market portals, to establish a valid buy-sell range. This buy-sell range
toward determining forward market structure and direction. Argus shall be determined using informed market opinions and other indica-
will also refer to the swaps markets to evaluate the outright value of tors judged by Argus to be indicative of market values.
floating prices deals that are reported.
Japan cfr
Market structure Specification: refrigerated cargoes are of field grade quality. Prices
The Argus LPG assessments are for cargoes delivered to destination are for a single, mixed cargo.
ports 25-40 days forward from the date of assessments. It is usual Size: 23,000t cargoes divided equally between propane and butane
that part of this assessment period would be determined by market Location: for delivery into Kawasaki/Chiba (Japan)
prices for one delivery period, and another part would be determined The assessment is an average price for the period 25-40 days from
by different delivery period. In such cases, Argus will pro-rate the the publication date. Argus will make a price assessment for each
values of the relevant delivery periods. A spreadsheet detailing these of the days in the 25-40 day forward period taking into account the
inputs is available on a daily basis from Argus on request. price structure of the physical market. Physical prices are discussed
A significant volume of the LPG trade in the eastern LPG markets in the market for different delivery periods in the 25-40 day forward
consists of mixed cargoes that include approximately 11,000t each period. The delivery periods are usually discussed as the first half
of propane and butane. These cargoes typically are traded at a and the second half of the month. So the Argus assessment for
single price representing the value of both components. 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
In the absence of market indicators for 23,000t cargoes of propane half month delivery period within the 25-40 day forward period.
or butane, Argus will include 11,000t + 11,000t (known as 11-11)
deals and bid/offer ranges in its assessments. This means that In recent years, it has become common for participants in the Asian
the midpoint value of 11-11 deals will be used and an informed cfr market to transact deals that include both a fixed price and float-
consensus differential between propane and butane prices used to ing price component. For example, deals that are a 50:50 average
calculate individual propane and butane values from the 11,000t + of the Far East Index and a fixed price, are common. In such cases,
11,000t midpoint value. Argus will use a variety of techniques to determine the value of the
deal so that it can be considered in Argus’ assessments.
If there is any discrepancy between 23,000t and mixed cargoes
then the 23,000t price will set the Argus price quotation for 23,000t The techniques include examining the forward structure of the LPG
propane and 23,000t butane. swaps market, considering the value of the fixed portion of the deal and
using other analytical techniques employed by the industry to derive a
11+11 propane-butane mix fair value for the deal. Argus will use these techniques as appropriate to
derive a representative value for deals that are priced on a fixed/floating
Argus also publishes two mixed cargo quotations of 11,000t pro- price basis and consider such deals as warranted in its assessments.
pane and 11,000t butane (11-11). One quotation is basis cfr Japan
and the other cfr south China. South China cfr
Specification: refrigerated cargoes are of field grade quality. Prices
Argus will use a similar methodology as described above to estab- are for a single, mixed cargo.
lish a buy-sell range for these two quotes. Argus will consider a wide Size: 23,000t cargoes divided equally between propane and butane
range of information, including bids and offers, transactions, in- Location: for delivery into Shenzen and Zhuhai in the Guangdong
formed market views and the performance of other related markets. province of south China
Market information may not be consistent regarding prevailing price The assessment is an average price for the period 25-40 days from
levels so if contradictory information regarding a viable buy-sell the publication date. Argus will make a price assessment for each
range is in the market Argus will give the greatest weight to deals for of the days in the 25-40 day forward period taking into account the
cargoes that conform to Argus’ published specification done in the price structure of the physical market. Physical prices are discussed
run up to the timestamp. For inclusion in the mixed cargo quotes, in the market for different delivery periods in the 25-40 day forward
deals must be judged by Argus to be repeatable and representative. period. The delivery periods are usually discussed as the first half
and the second half of the month. So the Argus assessment for
Bid and offers must be firm, made in the open market, not subject to 25-40 day forward period, should prices be flat for each of these de-
special conditions and be valid for a period of time during which a livery periods, will be proportionate to the number of days for each
deal could reasonably be transacted. Similarly if a firm bid and/or of- half month delivery period within the 25-40 day forward period.
fer is made after a deal but before the timestamp, Argus will consider
this bid and/or offer if it is found to be representative. This bid and/ In recent years, it has become common for participants in the Asian
or offer may be viewed by Argus as being more representative of the cfr market to transact deals that include both a fixed price and float-
market at the timestamp than a single non-repeatable deal and may ing price component. For example, deals that are a 50:50 average
be used as the basis for the price assessment. In the absence of any of the Far East Index and a fixed price, are common. In such cases,
firm bids and/or offers, Argus shall use inputs from its regular market Argus will use a variety of techniques to determine the value of the
surveys, plus any other inputs from brokers, market participants or deal so that it can be considered in Argus’ assessments.

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Methodology and specifications guide May 2019

The techniques include examining the forward structure of the LPG Propane pressurised
swaps market, considering the value of the fixed portion of the deal
and using other analytical techniques employed by the industry to South China CP fob
derive a fair value for the deal. Argus will use these techniques as Timing: CP basis is the month’s CP (Saudi Contract Price) that is the
appropriate to derive a representative value for deals that are priced underlying price for the CP differential. Period is the timing of lifting
on a fixed/floating price basis and consider such deals as warranted or delivery. For pressurised cargoes (CP plus), the roll date from one
in its assessments. month loading to the next will occur on the 20th of the previous month.
Size: 1,500-2,500t
Argus South China cfr Index (propane and butane) Location: for loading from Zhuhai, Shenzhen and Dongguan, south
Specification: refrigerated cargoes are as per original supplier’s China
guaranteed specification Specification: pressurised cargoes are for deliveries of propane
Size: 15,000-23,000t cargoes from 30-50:50-70 propane:butane cargoes.
Location: for delivery into the Pearl River delta (Guangzhou, Zhuhai
and Dongguan) of Guangdong province South China fob
The assessment is an average price for the period 25-40 days from Size: 1,500-2,500t
the publication date. Argus will make a price assessment for each Location: loading from Zhuhai, Shenzhen and Dongguan, south
of the days in the 25-40 day forward period taking into account the China
price structure of the physical market. Physical prices are discussed Timing: for pressurised cargoes fob, the loading window is 5-20
in the market for different delivery periods in the 25-40 day forward days from the date of publication.
period. The delivery periods are usually discussed as the first half Specification: pressurised cargoes are for deliveries of propane
and the second half of the month. So the Argus assessment for the from 30-50:50-70 propane:butane cargoes
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 South China CP cfr
half-month delivery period within the 25-40 day forward period. 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 lifting or
The South China cfr assessment considers cargoes of worldwide ori- delivery. For pressurised cargoes cfr the delivery window is 7-15 days
gin, including Iran. The assessment considers bids, offers and deals for from the date of publication. For pressurised cargoes (CP plus), the
a laycan of a minimum of five days within the 25-40 day forward period roll date from one month delivery to the next will occur on the 20th of
and a laytime of up to 48 hours for one safe port. The vessel arrival the previous month.
draught shall not exceed 11.5m and the vessel age shall not exceed Size: 1,500 to 2,500t
25 years. Payment for the cargo is to be made within 20 days from the Location: for delivery into Zhuhai and Sherkou, south China
vessel’s tendered Notice of Readiness (NOR). Specification: pressurised cargoes are for deliveries of propane
from either 20:80 or 30:70 propane:butane cargoes
Argus East China cfr Index (propane and butane)
Specification: refrigerated cargoes are as per original supplier’s South China cfr
guaranteed specification Size: 1,500-2,500t
Size: 15,000-23,000t cargoes Location: delivery into Zhuhai and Sherkou, south China
Location: for delivery into Ningbo, in Zhejiang province Timing: for pressurised cargoes cfr, the delivery window is 12-20
The assessment is an average price for the period 25-40 days from days from the date of publication
the publication date. Argus will make a price assessment for each Specification: pressurised cargoes are for deliveries of propane
of the days in the 25-40 day forward period taking into account the from either 20:80 or 30:70 propane:butane cargoes
price structure of the physical market. Physical prices are discussed
in the market for different delivery periods in the 25-40 day forward Vietnam CP cfr
period. The delivery periods are usually discussed as the first half Size: 1,000-2,500t
and the second half of the month. So the Argus assessment for the Location: for delivery into Hai Phong, north Vietnam
25-40 day forward period, should prices be flat for each of these de- Timing: the delivery window is 12-20 days from the date of publication
livery periods, will be proportionate to the number of days for each Specification: Pressurised cargoes are for deliveries of 30-50:50-70
half-month delivery period within the 25-40 day forward period. propane:butane cargoes. For pressurised cargoes (CP plus), the roll
date from one month delivery to the next will occur on the 15th of the
The East China cfr assessment considers cargoes of worldwide ori- previous month
gin, including Iran. The assessment considers bids, offers and deals
for a laycan of a minimum of five days within the 25-40 day forward Butane pressurised
period and a laytime of up to 48 hours for one safe port. The vessel
arrival draught shall not exceed 11.5m and the vessel age shall not South China CP fob
exceed 25 years. Payment for the cargo is to be made within 20 Timing: CP basis is the month’s CP (Saudi Contract Price) that is
days from the vessel’s tendered Notice of Readiness (NOR). 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

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one month loading to the next will occur on the 20th of the previous China wholesale propane/butane mix
month.
Prices are published in yuan/tonne. Specification is propane-butane mix.
Size: 1,500-2,500t
Location: for delivery from Zhuhai, Shenzhen and Dongguan, outh East China
China.
Specification: pressurised cargoes are for deliveries of butane from Ex-terminal
30-50:50-70 propane:butane cargoes. • Ningbo
• Wenzhou
South China fob • Taicang
Size: 1,500-2,500t • Shanghai
Location: for loading from Zhuhai, Shenzhen and Dongguan, south • Zhangjiagang
China • Fujian
Timing: for pressurised cargoes fob, the loading window is 5-20
days from the date of publication. Ex refinery
Specification: pressurised cargoes are for deliveries of butane from • Shanghai
30-50:50-70 propane:butane cargoes • Zhenhai
• Yangzi
South China CP cfr • Fujian
Timing: CP basis is the month’s CP (Saudi Contract Price) that is • Gaoqiao
the underlying price for the CP differential. Period is the timing of • Qingdao
lifting or delivery. For pressurised cargoes cfr, the delivery window is
7-15 days from the date of publication. For pressurised cargoes (CP South China
plus), the roll date from one month delivery to the next will occur on
the 20th of the previous month Ex terminal
Size: 1,500-2,500t size • Zhuhai
Location: for delivery into Zhuhai and Sherkou, south China • Shenzhen
Specification: pressurised cargoes are for deliveries of butane from • Raoping
either 20:80 or 30:70 propane:butane cargoes • Nansha
• Shantou
South China cfr • Yangjiang
Size: 1,500-2,500t
Location: for delivery into Zhuhai and Sherkou, south China Ex refinery
Timing: for pressurised cargoes cfr, the delivery window is 12-20 • Maoming
days from the date of publication • Guangzhou
Specification: pressurised cargoes are for deliveries of butane from
either 20:80 or 30:70 propane:butane cargoes Northeast China

Vietnam CP cfr Ex refinery

Size: 1,000-2,500t • Daqing
Location: for delivery into Hai Phong, north Vietnam • Dalian
Timing: for pressurised cargoes cfr, the delivery window is 12-20
days from the date of publication. For pressurised cargoes (CP Northwest China
plus), the roll date from one month delivery to the next will occur on
the 15th of the previous month Ex refinery
Specification: pressurised cargoes are for deliveries of 30-50:50-70 • Urumuqi
propane:butane cargoes.
Inland China

Ex refinery
• Lanzhou
• Yan-An

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Methodology and specifications guide May 2019

Africa LPG indexes and butane delivered to Mombasa, Kenya, and is calculated as the
weighted sum of two derived values.
South Africa LPG index
Prices are in US dollars/tonne. The South Africa LPG index is the Propane delivered east Africa * 0.15 + butane delivered east Africa
calculated value of LPG cargoes delivered to Richards Bay, South * 0.85
Africa, including logistics costs and the underlying prices of pro-
pane and butane exported from the Middle East. Propane delivered east Africa
Calculated as the Propane Argus Middle East Index plus a weekly
Calculated as the Argus Middle East Index for propane and butane in a assessment of freight and an annual assessment of other logistics
ratio of 60:40, plus freight from Ras Tanura to Richards Bay, the cost of costs for the Ras Tanura-Mombasa route.
bunker fuel, port and brokerage fees and ship-to-ship transfer costs.
Butane delivered east Africa
Calculation components: Calculated as the Butane Argus Middle East Index plus a weekly
All calculation components are updated daily, unless specified. assessment of freight and an annual assessment of other logistics
Propane Argus Middle East Index costs for the Ras Tanura-Mombasa route.
Butane Argus Middle East Index
Fuel oil bunker 380cst Fujairah ($/t) – see the Argus Asia-Pacific Timing
Products methodology. Indexes are calculated and published daily, except on days when
USD/ZAR exchange rate – sourced by Argus at 11am London time. Singapore, London or US price assessments are not produced.
When unavailable owing to a London holiday, the last available rate
is used.
Time-charter rate for 35,000-38,000m³ vessels – basis 12 months Americas
(updated weekly). Argus updates this rate weekly, in consultation
with the market. A full methodology for the Americas assessments published in
South Africa flat port fee – updated annually, on or around 1 April by Argus International LPG can be found in the Argus NGL Americas
Transnet National Ports Authority. Port fees are subject to VAT. methodology.
South Africa daily port fee – updated annually, on or around 1 April
by Transnet National Ports Authority. Port fees are subject to VAT. Mont Belvieu pipeline fob
Ras Tanura port fees – according to the Kingdom of Saudi Arabia
General Corporation of Ports Enterprise
Ship-to-ship transfer cost – updated at least annually on or around 1 • Propane
April, in consultation with the market. • Propane equivalent ($/t): prices are in US dollars/tonne. The
The resulting delivered South Africa LPG Index is published daily ac- conversion factor is 522.3 USG/t
cording to the Singapore publishing schedule. Argus also publishes • Butane
a month-to-date average of the index. • Butane equivalent ($/t):prices are in US dollars/tonne. The
conversion factor is 453 USG/t
Butane, delivered west Africa • Purity ethane
Prices are in US dollars/tonne. The butane, delivered west Africa • Purity ethane $/t equivalent: prices are in US dollars/tonne.
assessment is the calculated value of butane cargoes delivered to The conversion factor is 737.99 USG/t
Lagos, Nigeria, and is calculated as the lowest of two derived values. • Ethane-propane mix
• Isobutane
Northwest Europe butane delivered west Africa • Natural gasoline
Calculated as the Argus cif ARA large cargo butane price assess- • USGC export fob, diff to Mont Belvieu
ment plus a weekly assessment of freight and an annual assess- • USCG export fob ($/t)
ment of other logistics costs for the Rotterdam-Lagos route.
LST
US Gulf coast butane delivered west Africa • Propane
Calculated as the Argus USGC butane fob price assessment plus • Butane
a weekly assessment of freight and an annual assessment of other
logistics costs for the Houston-Lagos route. Targa
• Propane
See the NGL Americas methodology for the description of the • Purity Ethane
USGC butane price assessment.
US Enterprise averages
LPG 15:85 delivered east Africa
Prices are in US dollars/tonne. The LPG 15:85 delivered east Africa • Propane
assessment is the calculated value of a mixed cargo of propane • Butane

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Methodology and specifications guide May 2019

US forward market

Mont Belvieu
The Mont Belvieu propane and butane forward curves are the value
of the swap futures markets at the time of the Nymex close, typically
2:30pm New York time. The bid is the highest available bid. The of-
fer is the lowest available offer. The mean is the midpoint of the two.

LNG assessments

Argus International LPG includes a weekly northwest Europe small-

scale LNG free on truck price assessment, published on Thursday
in energy (€/MWh) and tonnes of propane equivalent ($/t propane
equivalent).

See the Argus LNG Daily methodology for details.

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

pane energy content of 50.4MJ/kg.

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