Argus-NGL-Americas.pdf

Copyright © 2013 Argus Media Inc.

Argus NGL Americas

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Overview

Propane prices at Mont Belvieu soared in robust trading at the week’s open, as heating demand and exports pushed prices higher, hitting an intraday high of 130.5¢/USG, values not seen since 12 March 2012. Propane outpaced declines in crude and it ended the day valued at 56pc of WTI, the highest valuation seen since 5 January 2012.

Ethane opened stronger, borrowing from gains in natural gas futures, and rose in moderate trading, aided by sharp gains in propane.

Butane opened weaker than Friday’s close, and fell in choppy trading, in sympathy with Rbob values. It was last discussed at 52pc of Rbob, in line with the previous week’s value.

Conway propane surged in active trading Monday, reaching a 4.5¢ premium to Mont Belvieu; its value relative to crude climbed to 57pc.

In Latin America, an Argentinian producer loaded a cargo for delivery to Brazil.

The January contract for light, sweet crude fell 31¢ to $97.27/bl in trading on the Nymex. Natural gas futures rose 11.8¢ to $4.232/mnBtu. Rbob contracts fell 5.2¢ to $2.6749/USG.

MOnt Belvieu light ngls

E/P mix saw thin activity Monday. It was bid early at 26.75¢/USG, higher than the previous session’s close, where it

spOt Market trade ranges

Mont Belvieu ¢/USG

Month low high Meanvolume-

weighted average

E/P mix Wet 26.875 27.375 27.125Dec 26.750 27.250 27.000 27.000Jan 27.000 27.500 27.250

Ethane non-LST Wet 27.000 27.500 27.250Dec 27.000 27.375 27.188 27.223Jan 27.125 27.625 27.375

Propane LST Wet 128.875 129.375 129.125Dec 127.500 130.375 128.938 128.500Jan 128.250 129.375 128.813

Propane non-LST Wet 128.875 129.375 129.125Dec 127.375 130.500 128.938 128.682Jan 128.875 129.375 129.125

Propane Targa Wet 128.625 129.125 128.875Dec 128.250 129.125 128.688 128.688Jan 128.625 129.125 128.875

Normal butane LST Wet 137.625 138.125 137.875Dec 137.125 137.625 137.375 137.375Jan 137.625 138.125 137.875

Normal butane non-LST Wet 139.125 139.625 139.375Dec 137.875 140.000 138.938 139.310Jan 139.125 139.625 139.375

Isobutane LST Wet 140.750 141.250 141.000Dec 140.250 140.750 140.500 140.500Jan 140.750 141.250 141.000

Isobutane non-LST Wet 139.250 139.750 139.500Dec 137.750 140.375 139.063 139.625Jan 139.250 139.750 139.500

Natural gasoline non-LST Wet 212.500 213.000 212.750Dec 211.000 213.500 212.250 212.135Jan 212.500 213.000 212.750

See related deals on page 3

Current month-to-date averages ¢/USG

Mont Belvieu Month Mean Mtd volume-weighted average Mtd

E/P mix Dec 25.771 25.771Ethane non-LST Dec 26.438 26.473Propane LST Dec 125.115 124.841Propane non-LST Dec 125.010 124.891Propane Targa Dec 125.156 125.198Normal butane LST Dec 138.042 138.042Normal butane non-LST Dec 139.625 139.776Isobutane LST Dec 141.188 152.542Isobutane non-LST Dec 141.656 141.792Natural gasoline non-LST Dec 215.042 214.839

Spot market prices reflect the low and high of deals done throughout the trading day

Issue 13Q-236 | Monday 9 December 2013

LST propane percentage of Nymex WTI %

of 9Copyright © 2013 Argus Media Inc.

Argus NGL Americas Issue 13Q-236 | Monday 9 December 2013

remained for the majority of the session. Spreads with ethane priced mix at parity or at a slight 0.125¢ discount.

Ethane opened 0.5¢ higher than Friday’s close, at 27¢/USG, and rose, pulled up by sharp gains in propane. It hit 27.375¢/USG, before activities retreated before noon, values not seen since 31 May. It was last discussed at a 0.515¢ discount to its fuel value.

Outer-month ethane activity was thin; a first quarter strip traded at 27.625¢/USG, while a calendar 2014 deal sold for 27.75¢/USG.

Non-LST propane opened slightly above the previous session’s close, at 127.375¢/USG, and rose in steady trading, hitting 129¢/USG before noon, as buyers secured volumes ahead of colder weather forecasts. As buyer reentered the market in the afternoon; propane continued to tick upward to 130.5¢/USG.

Outer-month propane activity was moderate; at the LST terminal a January volume traded at 128.25¢/USG, while a first quarter strip sold for 124.875¢/USG. A January/February spread traded at a 2.125¢ backwardation, and a January/March spread traded at a 9.75¢ backwardation.

Light NGLs rose sharply. E/P mix and ethane were last discussed at 27.25¢/USG and 27.375¢/USG. Propane was last traded at 130.5¢/USG.

MOnt Belvieu heavy ngls

Non-LST butane fell in moderate trading at the week’s open, pulled down by weakening Rbob. It opened 0.625¢ lower, at 140¢/USG, and fell in choppy trading, hitting 139.125¢/USG before activities retreated before noon. Discussions continued to fall in the afternoon, and a subsequent deal traded at 137.875¢/USG.

Isobutane fell in early trading Monday, following declines in motor gasoline. It opened at 140¢/USG, 0.875¢ below Friday’s close, and fell to 137.75¢/USG before noon. Two spreads with normal butane priced isobutane at parity with or at a 0.25¢

spOt Market trade ranges

Conway ¢/USG

Month low high Meanvolume-

weighted average

E/P mix Wet 24.500 25.000 24.750Dec 23.875 24.500 24.188 24.202Jan 24.250 24.750 24.500

Propane Wet 132.750 133.250 133.000Dec 130.500 134.375 132.438 132.453Jan 133.750 134.000 133.875

Normal butane Wet 137.750 138.000 137.875Dec 136.500 137.750 137.125 137.363Jan 137.125 137.625 137.375

Isobutane Wet 136.750 137.250 137.000Dec 136.375 136.875 136.625 136.625Jan 136.625 137.125 136.875

Natural gasoline Wet 208.750 209.250 209.000Dec 208.000 209.000 208.500 208.500Jan 208.500 209.000 208.750

Rail natural gasoline Dec 216.000 217.000 216.500See related deals on page 3

Current month-to-date averages ¢/USG

Conway Month Mean Mtd volume-weighted average Mtd

E/P mix Dec 22.281 22.294Propane Dec 125.927 126.127Normal butane Dec 137.833 137.978Isobutane Dec 136.792 136.792Natural gasoline Dec 208.167 208.222Rail natural gasoline Dec 216.333

us gulf coast exportlow high Mean

Propane fob ¢/USG 141.057 141.307 141.182Propane fob $/t 736.74 738.05 737.39US propane del Japan (AUSJ) $/t 876.5 878.0US propane del ARA (AUSE) $/t 802.5 804.0

hattiesburg ¢/USGMonth low high Mean Mean Mtd

Propane Dec 146.688 147.188 146.938 141.948

Bushton ¢/USGMonth low high Mean Mean Mtd

Propane Dec 133.188 133.688 133.438 126.927

napoleonville ¢/USGMonth low high Mean Mean Mtd

E/P Mix Dec 25.250 25.750 25.500 24.271Ethane Dec 25.938 26.438 26.188 25.438Propane Dec 126.688 127.188 126.938 123.011Normal butane Dec 143.188 143.688 143.438 144.125Isobutane Dec 149.813 150.313 150.063 152.656Natural gasoline Dec 217.250 217.750 217.500 220.292

Spot market prices reflect the low and high of deals done throughout the trading day

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premium to butane. It was last discussed at 52pc of Rbob, unchanged from Friday’s value.

At the LST terminal, isobutane traded 140.5¢/USG during the session, valued at a slight premium to non-LST.

Natural gasoline prices fell in thin trading Monday, pulled down by declines in Rbob. Natural gasoline opened at 213.5¢/USG, below the previous session’s close, and sank in thin trading. Late in the day volumes traded at 211.5-211¢/USG, valued at 79pc of motor gasoline, slightly below values seen last week.

Heavy NGLs fell sharply in steady trading. Butane and isobutane were last discussed at 138.75¢/USG and 139¢/USG. Natural gasoline was last discussed at 211¢/USG.

COnway light ngls

Midcontinent light products soared in active trading to kick off the week, as heating demand lent support to prices.

Conway propane opened sharply higher, with an early deal traded at 130.5¢/USG, and climbed in steady morning trade to 134.375¢/USG – its strongest level since 2 November, 2011. Prices edged slightly lower later in the session, and it last sold for 133.25¢/USG.

Midcontinent propane significantly outpaced gains seen on the Gulf coast Monday, as demand for heating fuel, coupled with lower-than-normal inventories, supported prices. Conway’s premium to Mont Belvieu stood at 4.5¢ Monday, marking the widest it has been since February 2009.

Conway propane’s value relative to crude rose to 57pc Monday, up from an average of 34pc last December, as PADD II inventories are currently 28pc below the five-year average.

Outer-month activity was robust. Outright volumes for delivery in January closed at 133.75-134¢/USG, and a January/February roll traded at a 2.5¢ backwardation.

E/P mix rose in robust trading Monday morning, bolstered by gains in natural gas. It opened at 23.875¢/USG, and climbed

ngl spot dealstiming ¢/USG ’000bl timing ¢/USG ’000bl

e/p mix non-lst/non-lst ethane propane non-lst (cont.)Dec 0.250 10 Dec 129.875 5Dec 0.000 10 Dec 130.000 10Dec 0.125 10 Dec 130.500 10Dec 0.125 10 Dec 130.500 15

Dated 129.500 25purity ethane non-lstDec 27.000 10 Mont Belvieu propane targaDec 27.000 10 Dec 128.250 10Dec 27.125 10Dec 27.125 10 normal butane non-lstDec 27.250 10 Dec 137.875 10Dec 27.250 10 Dec 138.500 10Dec 27.250 10 Dec 138.500 5Dec 27.250 10 Dec 139.000 10Dec 27.375 10 Dec 139.125 10Dec 27.375 10 Dec 139.750 10Dec 27.375 15 Dec 139.750 101Q 27.625 30 Dec 139.750 10Cal Year 27.750 60 Dec 139.750 10

Dec 140.000 10propane lst Dec 140.000 10Dec 127.500 10 2Q 130.875 120Dec 127.750 10 Jan-Jun 134.250 10Dec 127.750 15Dec 127.875 10 Butane non-lst/non-lst propaneDec 127.875 10 Dec -8.750 5Dec 128.000 10Dec 128.000 10 isobutane lstDec 128.125 10 Dec 140.500 10Dec 128.125 10Dec 128.125 50 isobutane non-lstDec 129.500 5 Dec 137.750 10Dec 129.500 15 Dec 139.000 10Dec 129.625 10 Dec 140.000 10Dec 130.250 10 Dec 140.250 10Dec 130.375 10 Dec 140.375 10Dec 130.500 5 Dec 140.375 10Dated 129.500 25Jan 128.250 15 natural gasoline non-lst1Q 124.875 75 Dec 211.000 25Jan/Feb -2.125 75 Dec 211.000 251Q/2Q -12.000 15 Dec 211.250 25Jan/Mar -9.750 75 Dec 211.500 25

Dec 212.750 20propane non-lst Dec 213.250 10Dec 127.375 10 Dec 213.250 15Dec 127.750 10 Dec 213.500 25Dec 127.750 15 Dec 213.500 15Dec 128.000 10Dec 128.000 10 Conway e/p mixDec 128.125 10 Dec 23.875 5Dec 128.125 10 Dec 24.000 5Dec 128.125 10 Dec 24.000 5Dec 128.375 10 Dec 24.000 5Dec 128.500 10 Dec 24.125 5Dec 128.500 10 Dec 24.250 10Dec 128.750 5 Dec 24.250 5Dec 129.000 10 Dec 24.250 10Dec 129.750 5 Dec 24.375 5

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LST propane vs Mt Belvieu non-LST ethane ¢/USG



to 24.25¢/USG shortly thereafter. Activity waned mid-morning, and bids and offers were last heard at 24/24.5¢/USG.

COnway heavy ngls

Midcontinent heavy products were mixed Monday, as crude and motor gasoline futures tumbled.

Conway butane opened lower, at 137.625¢/USG, and oscillated throughout the morning in extremely range-bound trading. It was last bid and offered at 137/138¢/USG, and its value relative to crude inched lower, to stand at 59pc.

Wet butane traded robustly, with a flurry of early deals done at 137.75-138¢/USG. A wet/any-month spread priced wets at a 0.375¢ premium.

Isobutane did not trade, and few bids or offers were heard. Isobutane was assessed at a 0.5¢ discount to normal butane based on recent deals done, which put its value relative to Group Three motor gasoline steady at 59pc.

Natural gasoline opened at parity with the prior day’s close, with an early volume traded at 209¢/USG. It weakened 1¢ in quiet trading, as lower crude and gasoline futures pulled prices lower.

ngl spot deals (cont.)timing ¢/USG ’000bl timing ¢/USG ’000bl

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Non-LST natural gas ratio of USGC 87 %

LST propane vs Conway propane ¢/USG

Conway e/p mix (cont.) Conway propane (cont.)Dec 24.500 10 Wet 131.000 1.5

Jan/Feb -2.500 25Conway propaneDec 130.500 10 Conway propane/non-lst propaneDec 130.625 10 Dec -2.610 5Dec 130.750 5Dec 130.750 5 Conway normal butaneDec 130.875 5 Dec 136.500 5Dec 131.000 10 Dec 137.000 5Dec 131.000 5 Dec 137.000 5Dec 131.000 5 Dec 137.250 5Dec 131.000 5 Dec 137.500 5Dec 131.375 10 Dec 137.500 5Dec 131.500 10 Dec 137.625 5Dec 132.000 5 Dec 137.750 10Dec 132.000 10 Dec 137.750 5Dec 132.000 5 Wet 137.750 5Dec 132.125 5 Wet 138.000 5Dec 132.250 5 Wet 138.000 5Dec 132.750 10 Wet 138.000 5Dec 132.875 5 Wet 138.000 10Dec 132.875 10 Wet/Feb -0.375 19Dec 133.000 10Dec 133.250 10 Conway natural gasolineDec 133.250 10 Dec 208.000 5Dec 133.250 10 Dec 209.000 5Dec 133.500 10Dec 133.625 5 hattiesburg propaneDec 133.625 10 Dated 147.500 10Dec 134.000 10Dec 134.000 20 isobutane non-lst/non-lst butaneDec 134.125 5 Dec 0.000 10Dec 134.375 5 Dec -0.250 10Jan 133.750 10Jan 134.000 10

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Non-LST butane percentage of Nymex WTI %



Conway natural gasoline’s discount to midcontinent Cbob narrowed to 23.49¢ Monday, and its value against crude held steady at roughly 90pc.

Canada

Canadian NGL prices were mixed Monday, as propane prices continued to surge on strong demand and concern about tight supply.

In Sarnia, producers offered propane for 162.75¢/USG, marking a 33.875¢ premium over Mont Belvieu propane. Its value relative to crude stood at 69pc for the session.

Nearby, in Marysville, Michigan, propane was discussed at a roughly 35-40¢ premium to Mont Belvieu. Propane prices in the northeast US and eastern Canada have soared following strict allocation on the TE Products, or Teppco, pipeline, leaving product in thin supply during the winter heating season.

Sarnia butane was last discussed at a 19-20¢ premium to Mont Belvieu, but markets were quiet at the start of the week. Isobutane was assessed at parity with normal, which put its notional traded range at 155.375-157.375¢/USG.

Edmonton propane was heard at a 19¢ premium to Conway, marking a slightly wider differential than the prior session. Outright prices surged in lockstep with the midcontinent to stand at 150.5-152.5¢/USG for the day.

Loaded railcars out of Edmonton were discussed sharply higher, at 35-40¢ for December; pressurized cars are in thin supply.

Field-grade butane priced out of Edmonton was discussed unchanged, at 71-72pc of WTI. Its traded range weakened slightly with US crude prices to 164.75-166.75¢/USG.

In Edmonton, January condensate changed hands at $1.50-$2.25/bl over January calendar-month average Nymex, weaker from Friday.

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Canada

edmonton ¢/USGdaily Month low high Mean Mean Mtd

Propane Dec 150.500 152.500 151.500 143.979Diff to conway Dec +18.063 +20.063 +19.063 +18.052Field grade butane Dec 164.750 166.750 165.750 163.458Diff to LST Dec +27.375 +29.375 +28.375 +25.416Can. condensate $/bl Jan 99.070 99.820 99.445Diff to WTI $/bl Jan +1.500 +2.250 +1.875

sarnia ¢/USGdaily Month low high Mean Mean Mtd

Propane Dec 159.500 162.500 161.000 157.583Diff to LST Dec +30.563 +33.563 +32.063 +32.468Butane Dec 155.375 157.375 156.375 155.542Diff to LST Dec +18.000 +20.000 +19.000 +17.500Isobutane Dec 155.375 157.375 156.375 +155.188Diff to LST Dec +14.875 +16.875 +15.875 +14.000

wti COMparisOns

percentage of crude

Mont Belvieu % Conway % Mont Belvieu / Conway spread %

Propane 55.6 57.1 -1.5Propane LST 55.6 -1.5Normal butane 59.9 59.2 +0.8Isobutane 60.0 59.0 +1.1Isobutane LST 60.6 +1.7Natural gasoline 91.6 90.0 +1.6

Mont Belvieu grades are non-LST except where noted

Conway nat gasoline vs Canadian condensate ¢/USG

related Margins, 5 deC

us gulf ngl fractionation spreadsMont Belvieu ¢/USG $/mmBtu

Ethane non-LST 1.362 1.735Propane non-LST 90.570 3.880Normal butane Non-LST 99.242 0.947Isobutane non-LST 103.622 1.437Natural gasoline non-LST 173.290 2.645Total barrel value 10.644Total barrel frac spread 6.679

ethylene cash margins ¢/lbMargins

Purity ethane 43.26Propane non-LST 22.95Normal butane non-LST 26.56Light naphtha 15.71Heating oil Colonial -25.09

ice daily weighted averages ¢/USGtiming averages

Mont Belvieu ethane month 1 Dec 27.172Mont Belvieu propane month 1 Dec 128.171Conway propane month 1 Dec 131.611



latin aMeriCa

The VLGC Dorset began loading LPG at Enterprise’s terminal on the Houston Ship Channel Monday for a trader. Its destination remains unclear. Participants report strong buying interest from Europe, as Houston fob prices stood at a $247/t, or 47¢/USG, discount to northwest Europe as of 6 December.

The Ronald N, which loaded 44,000t of propane last week in Houston, is en route to Panama, according to market participants, where it may likely offload LPG onto a smaller vessel for transport across the canal.

In South America, the BW Nice loaded 30,500t cargo of LPG at Bahia Blanca, Argentina, for delivery to Brazil.

eurOpe/asia

In Europe, the lack of physical product available is keeping buyers away while the market waits for molecules to emerge or nomination chains to shake out a clearer picture of balances.

Total bid for a 20,500t cargo for delivery over 22-26 December, starting at 50:50 $970:December cif ARA flat, basis Le Havre. Bids reached $990:December cif ARA flat, basis Flushing, worth $978.50/t basis Flushing with December valued at $967/t, before withdrawing with no offer.

Glencore bid for a 20,500t cargo for 23-27 December delivery with bids starting at 50:50 $975:December cif ARA flat. Bids reached $980/t on the fixed element, putting value at $973.50/t basis Flushing, before withdrawing with no offer.

The butane market continued to be very quiet with no activity or price discussions reported.

Asian refrigerated spot prices surged on the back of higher swaps values. Keen buying interest from traders kept Asian cfr premiums supported.

In the afternoon trading window, three European traders

FOrward Curves

Mont Belvieu ¢/USG

Month Bid Offer Mean

Ethane Dec 27.125 27.625 27.375

Jan 27.375 27.875 27.625

Feb 27.250 27.750 27.500

Mar 27.125 27.625 27.375

1Q14 27.250 27.750 27.500

2Q14 27.125 27.625 27.375

3Q14 27.500 28.000 27.750

Propane Dec 130.000 130.500 130.250

Jan 130.250 130.750 130.500

Feb 128.000 128.500 128.250

Mar 120.500 121.000 120.750

1Q14 126.250 126.750 126.500

2Q14 114.125 114.625 114.375

3Q14 114.250 114.750 114.500

Butane Dec 138.250 138.750 138.500

Jan 138.750 139.250 139.000

Feb 136.500 137.000 136.750

Mar 132.375 132.875 132.625

1Q14 135.875 136.375 136.125

2Q14 129.875 130.375 130.125

3Q14 130.750 131.250 131.000

Conway ¢/USG


Propane Dec 133.125 133.625 133.375

Jan 133.000 133.500 133.250

Feb 130.250 130.750 130.500

Mar 121.250 121.750 121.500

1Q14 128.125 128.625 128.375

2Q14 111.875 112.375 112.125

3Q14 111.625 112.125 111.875

US forward curve prices reflect the market at 1:30pm CT

northwest europe ¢/USG


Propane Dec 184.750 185.500 185.125

Jan 177.875 178.625 178.250

Feb 167.125 167.875 167.500

Mar 156.250 157.000 156.625

Apr 144.875 145.750 145.313

May 141.625 142.500 142.063

1Q14 167.125 167.875 167.500

2Q14 142.250 143.000 142.625

3Q14 141.125 141.875 141.500

petrochemical feedstock comparisons

¢/USG $/t

E/P mix 27.00 182.75

Purity ethane 27.19 202.11

Propane non-LST 128.94 672.59

Butane non-LST 138.94 629.39

Isobutane non-LST 139.06 652.40

Natural gasoline non-LST 212.25 848.32

Paraffinic naphtha 80 min 234.08 904.88

Reformer naphtha 40 N+A 256.49 919.31

Diesel 10ppm Colonial 292.66 884.32

Heating oil Colonial 289.56 874.95



posted bids for 22,000t propane for second-half January arrival, with the highest bid at January CP +$39/t. No selling indications were reported as the mood was cautious ahead of January term acceptances from Abu Dhabi and Saudi Arabia.

Pressurized premiums were assessed unchanged from Friday last week. Buying interest was lacking for China-origin pressurised cargoes.

related Markets

CrudeMost values at the US Gulf coast weakened slightly, although all values are still substantially stronger week-on-week.

Notional landed values for foreign crudes at the US Gulf coast weakened further as WTI strengthened further versus Ice Brent and as North Sea Dated values weakened at the start of the week.

At the US west coast, Alaskan North Slope crude’s premium declined as the January WTI/Brent spread narrowed.

In Latin America, reports of an Escalante sale weakened assessed values for the grade, and decreased demand in the Mediterranean continued to weigh on Colombian crudes.

In western Canada, Western Canadian Select crude and Syncrude strengthened from Friday, while TransCanada began linefill on its MarketLink pipeline over the weekend.

gasolineUS Gulf coast gasoline levels firmed during the morning but encountered resistance in the afternoon, causing prices to fall back below the morning’s highs Monday. Early strength was attributed to continued buying amid a shortage of sellers with one day remaining until trading for the current pipeline cycle concludes.

Gasoline basis in Chicago and Group Three were up Monday with Chicago Cbob making the largest gain. The majority of midcontinent market liquidity focused on the Chicago spot market.

naphthaThere was some interest in Mississippi River naphtha barrels but know bids or offers emerged during the day. This kicked the week off on a quiet note.

The 40 N+A market saw no firm bids or offers during the day. The market was left at US gulf coast conventional gasoline +7c/USG to +10c/USG.

Similarly, the full range naphtha was also sluggish in activity and left at conventional gasoline -3.25c/USG to -1.25c/USG.

The paraffinic naphtha was left assessed at natural gasoline +15.1c/USG, even to Friday. A weaker natural gasoline basis, however, dragged outright prices lower by $12.38c/mt.

natural gas US natural gas futures reached a fresh six-month high as unseasonably cold weather is expected to boost near-term heating demand.

Spot prices surged at demand centers across the US as colder weather drove up heating load. The Henry Hub rose by 7¢/mmBtu to an average of $4.215/mmBtu, while gas on Transco pipeline’s zone 6 in New York was up by 87.5¢/mmBtu to $5.03/mmBtu.

Nymex gas for January delivery rose by 11.8¢/mmBtu, or 2.9pc, to settle at $4.232/mmBtu. The 2014-calendar strip was up by 2.2pc to $4.198/mmBtu and the 2015-calendar strip gained 1pc to $4.204/mmBtu.

Monday’s settlement price was the highest for the prompt-month contract since 24 May. Forecasters predict that the demand-stoking weather affecting much of the US at present could extend into next week, particularly in key consuming markets in the northeast.

Unseasonably cold weather projected through mid-December has stoked buying interest from market participants, Schneider Electric commodity analyst Matt Smith said. Reports of well freeze-offs in producing areas of Texas and Oklahoma last week also contributed to the rally, he said.

Colder-than-normal weather should blanket most of the US, from coast to coast, on 9-13 December, according to private forecaster Commodity Weather Group. Another Arctic storm system should be strong enough to deliver a fresh round of moderate to much below-normal temperatures to the midcontinent and the northeast on 14-18 December, the forecaster said today.

The higher-than-normal heating demand and potential impacts to supply should further cut into US gas inventories, which slipped below the five-year average following an unusually large draw in late November.

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The pace of withdrawals at key storage systems tracked by Argus in Appalachia and the southeast US slowed in the fi rst week of December. But those reported draws were much higher than a year earlier, widening the year-over-year gap in inventories.

industry news

Bluegrass pipeline open season is extended Boardwalk Pipeline Partners and Williams have extended the open season for their joint venture Bluegrass pipeline, which will carry Marcellus and Utica NGLs to storage and export facilities in Louisiana.

The commitment period for shippers will now run until 17 January 2014, instead of 16 December as originally planned.

The 200,000 b/d pipeline is scheduled to begin operations in 2015 and will be expandable to 400,000 b/d, pending customer interest.

The line will compete with Enterprise Products Partners’ Appalachia-to-Texas (ATEX) ethane pipeline, and a Kinder Morgan/MarkWest joint venture, which will convert a portion of the Tennessee Gas pipeline system to transport NGLs from the Marcellus and Utica shales to the Gulf coast.

Eni shuts Nigeria fl ow stations after fi reItaly’s Eni has shut-in some fl ow stations after a fi re hit its Brass crude pipeline in Nigeria.

“We know that a fi re occurred along the Tebidaba-Brass line, nearby Igbomotoru,” Eni said. “We have promptly started the shut-in operations for the fl ow stations related to the pipeline.”

This section of the pipeline carries around 50,000 b/d of Brass River crude.

Fires on pipelines in Nigeria are usually caused by theft, when pipelines are deliberately ruptured to steal crude, condensate or refi ned products.

Criminal activity has forced several upstream operators including Shell to declare force majeure on crude exports such as Bonny Light.

Nigeria produces around 2mn b/d.Eni also supplies gas to the 22mn t/yr capacity Nigeria LNG

plant on Bonny island.

Freight costs added as rhine levels fallRefi ned products and coal barges travelling along the river Rhine from the Amsterdam-Rotterdam-Antwerp (ARA) hub are set to face higher freight costs this week as water levels are forecast to drop below 180cm.

Water levels at the key measuring point of Kaub dropped by 1cm from yesterday’s levels to 186cm by 05:00 local time today, and are forecast to drop below 180cm this afternoon and to as low as 155cm by the morning of 12 December. Water levels at Kaub need to be above 180cm to allow barges to load to their full capacity. Once levels fall below 180cm, a surcharge of 10pc of the freight cost is added for every 10cm drop in order to compensate vessel owners for lost revenues caused by barges sailing partially loaded.

australia-south korea Fta to boost tradeAustralia and South Korea have signed a free-trade agreement (FTA), under which Seoul will eliminate taxes of up to 8pc on energy and resource imports from Australia over the next 10 years.

Crude, natural gas, propane and ammonia are among the products that will benefi t from the Korea-Australia Free Trade Agreement (Kafta).

Resource commodities accounted for about A$18bn ($16.4bn) or around three quarters of the value of Australia’s merchandise exports to South Korea last year. South Korea is Australia’s third-largest export market and is a key buyer of thermal and coking coal, iron ore and LNG. It also imports LPG products from Australia.

Kafta will boost Australia’s resource exports to South Korea by 17pc by 2030 compared to if the deal had not been signed, the countries said.

Coal and iron ore were the top Australian exports to South Korea last year, with each valued at A$5.4bn or 27.3pc of total exports of major goods. Crude exports totalled A$1.7bn or 7.1pc. LNG exports totalled A$591mn or 3pc of the total.

Other resource products covered in the FTA include gold, unwrought aluminium and titanium.

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Minimum volumes for volume-weighted average blMont Belvieu

EP mix 20,000

Ethane non-LDH 30,000

Propane LDH 30,000

Propane non-LDH 30,000

Normal Butane LDH 20,000

Normal Butane non-LDH 20,000

Isobutane non-LDH 20,000

Natural Gasoline non-LDH 30,000

Conway

EP mix 10,000

Propane 15,000

Normal butane 10,000

Isobutane 10,000

Natural gasoline 10,000

Argus US natural gas liquids trade range prices represent the market over the course of the entire trading day. Argus publishes the low and the high of deals done throughout the entire trading day for prompt wet, current “any month,” and the next “any month” markets. In illiquid markets, Argus makes an assessment of the range within which product could have traded, based on bids and offers through the entire day, movements in similar grades, and extensive polling of market participants. Argus also publishes volume weighted averages in Mont Belvieu and Conway. See full methodology below.The trading day is defined as 8:00am-4:00pm Central Time for all US and Canadian NGL markets. Argus values transparency in energy markets, so we publish lists of deals in our reports that include price, basis, and volume information. Argus also publishes forward prices for ethane and propane at Mont Belvieu and propane at Conway that are assessments of the best bid and best offer at 1:30pm Central time. Our complete methodology document is available at www.argusmedia.com/methodology. Argus also publishes the Argus International LPG daily report, which covers Europe, Asia Pacific, Former Soviet Union, China, and includes prices for Mont Belvieu NGLs. Prices in the International LPG report are used as benchmark indices for physical and financial trade in Europe and Asia Pacific. Swaps based on Argus LPG prices are available for clearing on the CME Clearport system.

volume-weighted averagesArgus publishes current month volume-weighted averages of deals done at Mont Belvieu and Conway. These averages are provided as an additional tool for the industry to use for purposes of indexing transactions. The volume-weighted average methodology is used extensively for indexation in the natural gas, crude, and clean products markets. The Argus averages are published as a single price, not as a range, and represent volume-weighted averages of the

current month deals done throughout the entire trading day. In order to allow the average to avoid distortion in illiquid markets, a minimum aggregate volume of trade must occur in a given trade day for the weighted average to be calculated (see table below). Should this aggregate volume not be achieved, the weighted average will represent an assessment of the market value based on bids, offers, and trades in the market. If deals are reported to Argus with volumes identified as meeting the minimum volume required for setting the low and high price, Argus will enter the volume at the minimum stated in the table below for purposes of calculating the volume weighted averages.

MethOdOlOgy

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High-level speakers discussing the issues that matter to market participants:

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