September 16, 2022 [Qcintel] – Quantum Commodity Intelligence – S&P Global Commodity Insights (Platts) will include the NuStar Corpus Christi, Texas North Beach terminal as a loading terminal for WTI Midland crude oil in its Dated Brent and Cash BFOE benchmarks, coming into effect for June 2023 deliveries.
The addition of a first US Gulf terminal comes after Platts announced in June this year it would broaden the basket of Dated Brent grades to include the WTI Midland crude o from June 2023.
”The decision marks a major milestone for the inclusion of US WTI Midland in the Brent complex, the first time a crude grade from outside of the North Sea will be reflected in the complex and the Dated Brent benchmark,” said S&P Global in a statement.
Platts further said it is currently reviewing six more oil terminals as it prepares for the inclusion of US WTI Midland into the Brent complex first announced on June 8, with decisions expected in the coming months.
“Our inclusion of the NuStar Corpus Christi, Texas North Beach terminal is an important step in evolving the Brent complex and our world-renowned Dated Brent benchmark by bringing on the first US-based terminal,” said Joel Hanley, a director at S&P Global Commodity Insights, which owns the Platts brand.
NuStar Logistics LP wholly owns the terminal, which handles crude oil and petroleum products, including distillates, gasoline, xylene and toluene. The terminal has four docks, including two that can fit up to a Suezmax size vessel and 3.7 million barrels of crude storage capacity, 1.4 million barrels of which is for WTI Midland.
The other six terminals currently under review by Platts include Energy Transfer Houston, Pin Oak Corpus Christi, Flint Hills Ingleside, Seabrook Logistics, Buckeye South Texas Gateway, and Plains Corpus Christi.
The Intercontinental Exchange, which hosts the ICE Brent futures contract, announced in July it plans to include WTI Midland in calculations for its Brent Index from June 2023 and increase the cargo size to 700,000 barrels.
Terms
Sources told Quantum the only issue still to be resolved ahead of the changes to Dated Brent is the underlying terms that govern forward market trades.
Shell said in late May it would amend its SUKO 90 terms governing forward trades of BFOE, allowing for delivery of US WTI Midland crude in a cash BFOE cargo on a CIF basis, meaning the cash seller would be responsible for vessel chartering.
However, Shell’s new SUKO 90 terms for trading in the forward cash BFOE market will differ from Platts, which is based on WTI Midland crude nominations from the US Gulf Coast on a “Free on Board” (FOB) basis.
Platts said in an 8 June statement: “Cash BFOE methodology to be defined after further discussion of market standards.”
A source told Quantum that the industry could switch to BP’s North Sea terms and conditions if Shell is not aligned with Platts and ICE.
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