Natural Gas supply |
CIF/FOB buyer must provide the following information | ||
Buyer Company Questionnaire Reference | LNG Specification Reference | Buyer entrusted with Purchase LNG Agreement |
What are the differences between LNG DES and CIF trading methods? |
DES and CIF have the same price combination, freight and insurance costs are included in the price of goods, but buyers and sellers in the delivery of goods, expenses and risk liability are clearly different, main aspects as follow ●The CIF is a symbolic delivery, the buyer should pay the bills when shipping ; the DES is the actual delivery, and the seller must place the goods under actual control of the buyer before the buyer pays the bill.
● The division of responsibilities for expenses and risks is different. The CIF is on the port ; and DES transfer responsibility after actual delivery at the port of destination.
● Insurance is differant. In CIF The insurance is obligation of seller that should be performed in the contract or the usual practice ; IN DES, seller buy insurance for himself and does not constitute an obligation.
● The CIF contract is a shipping contract that only specifies the time of shipment; the DES contract is a delivery contract and must specify the arrival time.
|
Pricing Indicators and Options Linked price index selection(JKM、JCC、Brent、HH ,FOB Singapore SLInG)。 Asian pricing is mostly based on Platts JKM: https://www.platts.cn/commodity/natural-gas/natural-gas-lng LNG situation in China, for reference https://ipkk.com/zh-mo/read/211166.html https://tw.mobi.yahoo.com/money/ In China , LNG terminal is not enough - natural gas supply and demand tension is difficult to alleviate in short-term http://yeslng.com/p/23820 |
Special Note |
A single purchase (test order) can only be used JKM price, long-term order is 5 to 10 years will have a preferential price (or 1 to 5 years or a TT contract negotiation method). CIF or FOB buyers are required to have receiving terminal contracts (FOB needs to provide them) so as not to affect the LNG market. |