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ASIA LPG METHODOLOGY

SIZE LOCATION SPECIFICATIONS PRODUCT SPECIFICATIONS

www.platts.com

Methodology and Specifications Guide

Asian LPG
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CHINA LPG METHODOLOGY

LATEST UPDATE: August 2011

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METHODOLOGY GUIDE

ASIA LPG METHODOLOGY

Platts assesses the value of large cargoes of propane and butane supplied on refrigerated tankers in both the Middle East and the Asia Pacific regions. Additionally, Platts publishes assessments for the small-cargo LPG market in the Asia Pacific, reflecting the value of mixed LPG cargos carried in pressurized ships. Platts refrigerated and pressurized LPG market assessments reflect the tradable value at the close of trading in Asia. Firm bids, firm offers, and confirmed deals take precedence when Platts assesses the value of LPG in Asia. Platts publishes this information on two real-time news services, Platts Global Alert and Petrochemicals Alert. Additionally, this information is also published in summary form in Platts daily newsletter for the LPG markets, LPGaswire. Platts considers outright prices and floating prices in its assessments. Floating price transactions are most commonly based on a premium or discount to Saudi Aramcos monthly export Contract Prices (CPs) for propane and butane. Timing: Platts tracks the Asia and Middle East LPG markets continuously throughout the day. Daily assessments reflect the latest information available at 1630 Singapore standard time on the date of publication. Products: Platts assesses the value of refrigerated propane and refrigerated butane as stand-alone, 11,000mt cargoes. Additionally, Platts also assesses the value of combination refrigrated cargoes where propane and butane are both committed for delivery, typically in evenly split, 22,000mt cargo sizes. In the pressurized markets, Platts assesses the values of mixed LPG cargos Asia, assuming a typical mix of 30% propane, 70% butane. Refrigerated delivery periods: In Asias delivered markets, Platts assesses cargoes for delivery in three half-month cycles. The cycles generally fall 30-45 days forward, 45-60 days forward and 60-75 days forward on the first day of every roll. Assessments roll forward on the first business day of a new month, and the first business day after the 15th of every month. As an example, from March 1 until March 15, Platts assessments would be for H1 April, H2 April and H1 May representing 30-45 days, 45-60 days and 60-75 days forward on March 1 itself. On March 16 (the first business day after the 15th), assessment cycles move forward by a half month to become H2 April, H1 May and H2 May. Platts headline cargo assessment is produced by averaging the first two half-month assessments. Refrigerated loading periods: In the Middle East spot LPG market, Platts assesses the outright value of spot cargoes for loading 20-40 days after the date of assessment. Platts also publishes an assessment of the premium or discount for spot cargoes loading 20-30 days forward in the Middle East, and spot

premiums for cargos loading one and two months forward. These premiums and discounts are applied to the prevailing Saudi Aramco Contract Price during dates of loading. Refrigerated freight rate assessments: Platts publishes three assessments for the cost of freight along major shipping routes in the refreigerated LPG markets. These assessments are published in dollars per metric ton, and reflect the cost of shipping refrigerated LPG in Very Large Gas Carriers (VLGCs), ships that are typically carrying 44,000mt of LPG in segregated propane and butane tanks. Platts surveys the market and reflect spot charter fixtures in the assessments, for cargoes loading 20 or more days after the date of assessment. The three routes assessed are Persian Gulf to Japan, Persian Gulf to South China and Persian Gulf to East China. For the purposes of normalization, Persian Gulf reflects the port of Ras Tanura, with spot fixtures for nearby loading locations including Qatar and Bahrain normalized where needed. Japan deliveries are normalized to Chiba for freight assessments, while East China and South China are normalized to Shanghai and Guangzhou/Shenzhen respectively. Pressurized delivery periods: Platts CFR South China and CFR East China pressurized cargo assessments reflect the value of parcels to be delivered 7-15 days out from the date of publication. Pressurized freight rate assessments: Platts publishes five assessments for the cost of freight along significant shipping routes in the Asia Pacific region pressurized LPG markets. These assessments are published in dollars per metric ton, and reflect the cost of shipping pressurized LPG in small tankers typically carrying between 1,000 mt and 3,000 mt of mixed LPG. Platts surveys the market and reflects spot charter fixtures in the assessments, for cargoes loading 7 or more days after the date of assessment. The routes assessed are (1) Thailand to the port of Guangzhou, (2) Thailand to the port of Guanxi, (3) Thailand to the port of Shantou, (4) Japan to the port of Shanghai and (5) Korea to the port of Shanghai. For assessment purposes, Thailand loadings are normalized to Map Ta Phut, Korea loadings are normalized to Ulsan/Onsan, and Japan to the port of Chiba. Basis: Platts assessments reflect standard terms and conditions for FOB spot transactions lifting from the Arab Gulf and CFR spot transactions into Japan, Korea, South China and Taiwan main ports (see locations). Cost and Freight are typically defined by Incoterms. Asia Proxy: Platts publishes two proxy values for the Saudi CP, based on the official CP for the current month and forward CP values derived from the swaps market. These values provide a marker for the value of CP relative to the CFR delivery dates for Japan/Korea and China/Taiwan. Terms: AG/JAPAN/KOREA/SOUTH CHINA/TAIWAN: Platts assessments reflect transactions based on letter of credit as needed with typically 30-day terms.

ASIAN LPG

METHODOLOGY GUIDE

Pressurized Cargos
CFR SOUTH CHINA:

CFR SINGAPORE-JAPAN: Platts 11:11 refrigerated LPG cargo assessments reflect the value of cargoes delivered to main ports from Singapore to Japan.

SIZE
Refrigerated LPG cargoes tend to trade on Very Large Gas Carriers (VLGCs) that typcally carry 44,000 mt of propane and butane split across four tanks. Refrigerated LPG typically trades in multiples of 11,000 mt, reflecting the typical size of one tank on a standard VLGC. Platts Asia assessments reflect the following typical volumes:

CFR JAPAN: Import terminals at main ports including Kashima, Yokkaichi and Oita CFR KOREA: Import terminals at main ports including Yeosu and Ulsan CFR SOUTH CHINA/TAIWAN: Import terminals, and floating storage vessels off China main ports including Shenzhen, Zhuhai, Shantou, Mai Liao and Kaohsiung CFR North Asia: Average value of CFR Japan and CFR South China assessements

Refrigerated Cargos
FOB AG: 11,000-44,000mt split refrigerated cargo CFR JAPAN: 11,000-44,000mt split refrigerated cargo CFR KOREA: 11,000-44,000mt split refrigerated cargo CFR SOUTH CHINA/TAIWAN: 11,000-44,000mt split refrigerated cargo

Pressurized Cargos
CFR SHENZHEN: Pressurized LPG storage terminals in South China including Zhuhai, Xiamen and Shantou, normalized to Shenzhen CFR SHANGHAI: Pressurized LPG storage terminals in East China including Ningbo and Nantong, normalized to Shanghai

Pressurized Cargos
CFR CHINA: 1,800-2,500mt pressurized mixed LPG

SPECIFICATIONS LOCATION
Propane (C3): Conforming to typical specifications issued by Saudi Aramco, including: minimum 95% propane content, maximum 4% butane content and maximum 0.1% olefin content. Normal Butane (C4): Conforming to typical specifications issued by Saudi Aramco, including: maximum 2% propane content, maximum 29% isobutane content, minimum 68% normal butane content and maximum 0.1% olefin content.

Platts assessments apply to the following ports:

Refrigerated Cargos
FOB AG: Export terminals including Ras Tanura, Saudi Arabia and Yanbu, Saudi Arabia, and any safe port in Qatar

ASIAN LPG

METHODOLOGY GUIDE

PRODUCT SPECIFICATIONS Saudi Aramco product specification / refrigerated Propane LPG

Test Composition,liquid volume % Ethane Propane Butanes Pentanes and heavier Total Olefins Corrosive Compunds,Copper strip Hydrogen Sulfide, ppm (wt) Guarantee Max 2.0 Min 95.0 Max 4.0 Nil Max 0.1 Max No 1b Max 5 Method ASTM D-2163

Specific Gravity 60F/60F Sulfur (Total),ppm (wt) (ug/g) Vapor Pressure @ 100F,psig (KPa(g)) Water Content, ppm (wt)

To be reported Max 30 Max 200 (1380) Max 10

ASTM D-1838 Lead acetate paper per Exxon Lab. Inspection Circular 200.14 UOP-212 ASTM D-2598 ASTM D-2784/D-40454 ASTM D-2598/D-1267 ASTM E-700

Notes: Odorant not required in refrigerated propane LPG. Hydrogen sulfide test required only when volatile sulfur test exceeds 5 ppm. Passing test of hydrogen sulfide shall be reported as "Not more than 5 ppm". Product shall contain no free water. 4 ASTM D-4045 as modified by Saudi Aramco can also be used as an alternative method of testing

Saudi Aramco product specification / refrigerated Butane LPG

Test Composition,liquid volume % Propane Iso-butane N-butane Isopentane and heavier Olefins Corrosive Compunds,Copper strip Hydrogen Sulfide, ppm (wt) Specific Gravity 60F/60F Total Sulfur ,ppm (wt) (ug/g) Vapor Pressure @ 100F,psig (KPa(g)) Water Content, ppm (wt) Guarantee ASTM D-2163 Max 2.0 Max 29.0 Min 68.0 Max 1.0 Max 0.1 Max No. 1b Max 5 To be reported Max 30 Max 70 (483) Max 10 Method

ASTM D-1838 Exxon Laboratory Inspection Circular 200.14 or UOP .212 ASTM D-2598 ASTM D-2784/ D-40454 ASTM D-2598/ D-1267 ASTM E-700

Notes: Odorant not required in refrigerated propane LPG. Hydrogen sulfide test required only when volatile sulfur test exceeds 5 ppm. Passing test of hydrogen sulfide shall be reported as "Not more than 5 ppm". Product shall contain no free water. 4 ASTM D-4045 as modified by Saudi Aramco can also be used as an alternative method of testing

CHINA LPG METHODOLOGY

Platts discontinued its China domestic LPG assessments effective December 6, 2010.

ASIAN LPG