North American LNG Projects: Political and Economic Factors by Adrian K

NOVEMBER 2014

North American LNG Projects: Political and Economic Factors By Adrian K. Yee

Powered by New products and Delisting of products Potential impact Changes to data attributes, data sources and data sources on data replacement of products Editorial 4 Summary Electricity Markets Expand and Get Integrated. Moving towards Convergence. 4 Power 6 FERC Expands SPP Market by Integrating Western-UGP, Basin Electric,and Heartland 6 Argus Adds New NYISO Power Forwards and Heat Rates Data Modules 6 Czech Republic, Hungary, Romania, and Slovakia Integrated into European Power Markets 7 Thomson Reuters Offers Forecast Tool for Brazilian Power Markets 7 PJM and NYISO Implement Coordinated Transaction Scheduling 7 Nodal Exchanges to Form Nodal Clear as a Derivatives Clearing Organization 8 NYMEX Revises MISO Michigan Hub Electricity Contract Names and Sizes 8 NYMEX Modifies Block Trade Minimum Threshold for North American Electricity Futures and Options 8 ERCOT Mobile App Offers Updates in Five Minute Intervals 9 Petroleum 10 Platts to Launch ICE Gasoil EFS, ESS Assessments at Singapore Close 10 Platts Lists New Clean Medium Range Tanker Freight Rate Assessment 10 Platts Publishes Libyan Crude Mesla Official Selling Price 10 Argus Introduces New Market to Forward Curves Publication 10 Argus Adds New Gulf Coast Markets to Its Refined Products Module 11 Argus Lists New East Chinese Propylene Oxide Assessments 11 Argus Creates Gasoil Diesel Winter Assessment to Caspian Market Report 11 NYMEX to List Cash-Settled Louisiana Light Sweet Crude Oil Futures 12 NYMEX Lists Canadian Heavy Crude Oil BALMO Futures 13 NYMEX Adds Crude Oil Mid-Curve Options 13 ICE Futures Europe Launches Two Gulf Coast Gasoline Futures 14 EIA Releases New Tool for Oil Import Analysis 14 GFI Empire Electronic Brokerage Launches Block Futures 14 Platts to End Chile Marine Diesel Oil Assessment 14 Platts to Discontinue Northwest European Dioctyl Phythalate Assessments 15 Platts to Discontinue Q1, Q2 Benzene Assessments 15 Platts Discontinues Gasoil 0.1% and Fuel Oil 3.5% from Power Cost Comparisons 15 Platts to Cease Publishing ARPEL Postings 15 NYMEX Delists Seven Low Sulphur Gasoil Based Futures and Options 16 Platts to Edit Specifications of FOB ARA Solvent 16 Platts to Base Full Cargoes on Malaysian Tapis and Indonesian Minas Crude Oil 16 Argus to Replace NWE Toluene, Paraxylene, and Mixed Xylene Assessments 17 NYMEX Permits Block Trading in Crude Oil BALMO Futures and MidCurve Options 17 CME Amends NY Harbor ULSD Crack Spread, RBOB Gasoline Calendar Spread, and Other Petroleum Option Contracts 17 Natural Gas 18 Platts to Add New Monthly Listing for Transco, Zone 5 Delivered 18 Platts to Create Sublistings for Transco, Zone 6 Non-New York North 19 Argus Adds Assessments to International LPG Publication 19 Argus Creates New Propane Conway and Targa Assessments 20 Argus Adds New AOC European Natural Gas Assessments 20 CME Lists New Columbia, Dominion, South Point, and Texas Eastern Zone M-3 Natural Gas Options 21 ICE Endex Introduces Belgian ZTP Natural Gas Futures 21 NYMEX Introduces Block Trading for Columbia, Dominion, and Texas Eastern Natural Gas Pipe Options 22 CME Amends Henry Hub Calendar Spread Option Contract 22 Coal 23 Platts to Change Calorific Value Basis of Russian and Poland Baltic Coal Assessments 23 Softs and Metals 24 Platts to Publish Singapore Time Sugar Futures Assessments 24 Argus Adds New Assessments to Argus Biomass Report and Data Module 24 Argus Introduces New RIN Americas Biofuels Assessments 24 Successful Farming and AgriCharts Launch New Mobile Application for Farmers 25 CME Group Delists Urea (Prilled) FOB Yuzhny Swaps (Clearing Only) Contracts 25

November 2014 2 Platts to Launch New UK Hot Rolled Coil Assessment 26 Summary Platts to Release Daily Data Analysis on Turkish Rebar Billet and Scrap Markets 26 Platts Introduces New Dry Freight Wire Monthly Report 27 NYMEX to List New Iron Ore Futures Contract 27 ICE Benchmark Administration to Become New Administrator of the LBMA Gold Price 28 Platts to Cease Publishing Weekly New York Dealer Osmium Price 28 Platts to Remove Weekly FOB China Tungsten Prices 28 Platts to Delist CIF Japan Indium Price Assessment 29 Platts Removes Some Fixed Pages from Metals Alert Service 29 HKEx Group and China Merchants Group to Collaborate on Product Development 29 Platts to Increase Frequency of US Midwestern Wire Rod Assessment 29 Finance 30 CME to Release US/Chilean Peso Futures Contract 30 CBOE Launches 10-Year US Treasury Note Volatility Index Futures 30 Thompson Reuters Creates StarMine Quality Earners APAC Ex-Japan Income Index 30 Bloomberg Launches List Trading Tool for Interest Rate Swaps 31 ICE to Open ICE Futures Singapore and ICE Clear Singapore in March 2015 31 ICE Completes Transition of Liffe’s European Interest Rates to ICE Futures Europe 31 ICE Clear Credit Starts Sovereign CDS Clearing for Hungary and South Africa 33 Deutsche Börse Begins Sovereign Bond Indexes for Africa’s Developed Economies 33 Deutsche Börse Adds Exchange Traded Commodities and Exchange Traded Notes from Boost ETP to Xetra 33 Deutsche Börse Lists SPDR Bond Index ETF on Xetra 34 Bank of China Authorized as Trading and Clearing Participant at Deutsche Börse 34 Nasdaq Lists FlexShares Credit-Scored US Corporate Bond Index Fund 35 Iraq Stock Exchange Introduces Nasdaq’s X-stream Trading Technology 35 Nasdaq Buyback Index Launches as ETF in Europe 35 Nasdaq Point of Presence Announced 35 Nasdaq Lists First Trust Emerging Markets Local Currency Bond ETF and First Trust Low Duration Mortgage Opportunities ETF 35 Nasdaq Adds First Trust International IPO ETF 36 ISE Launches ISE Cyber Security Index 36 Eurex Exchange Launches Variance Futures Contract with DRW 37 Barchart Begins On-Demand Equity Options Market Data 37 ASX and Bank of China Sign Agreement to Expand Cooperation 37 China Financial Futures Exchange Signs MOU with Korea Exchange 37 Other 38 US Department of Energy Launches Mobile Application for Energy Emergencies 38 Bank of China and DME Announce Partnership Agreement 38 News from Data Vendors 49 New ZEMA Data Reports – November 2014 39 ZE Publishes White Paper about Acquiring ZEMA vs. Building an Enterprise Data Management System 39 MDA Offers New Real-Time Weather Products 40 Portugal Launches Fuel Reference Prices Based on Argus 40 15-Minute Intraday Call Auction to Launch December 9, 2014 41 Monthly Market Analysis 42 Crude Oil Brent vs. WTI: Prompt-Month Contract (NYMEX) 42 Crude Oil Brent vs. WTI: Forward Curve (NYMEX) 43 Henry Hub Natural Gas Forward Curve (ICE) 43 North American Natural Gas Spot Prices (ICE) 44 Actual Weather (AccuWeather) 44 Electricity: Day-Ahead Prices (ICE) 46 In Depth 67 North American LNG Projects: Political and Economic Factors 47

November 2014 3 Editorial

Electricity Markets Expand and Get Integrated. Moving towards Convergence.

With the news remaining totally focused on crude oil markets over the last several months, the electric power sector has been somewhat abandoned by newsmakers. Meanwhile, during this period, electricity markets have been generating some very interesting developments. On the menu, there are several items offered by balancing authorities; regardless of the scale or location of these changes, all of them indicate the common trend of expansion by organized marketplaces and realignment of practices along interfaces between neighboring markets. In short, it means convergence, whether it is convergence of business practices, processes, or even prices. In November, two marketplaces — one in the Midwest United States and another in Europe — announced that they are expanding their borders. Following the FERC’s order of November 10, 2014, SPP will double the size of its service area with 9,500 miles of transmission lines and more than 3 million customers coming from Heartland Consumers Power District, Basin Electric Power Cooperative, and the Western Area Power Administration’s Upper Great Plains Region. The complete amalgamation is expected to take place in October 2015. However, prior to this glorious event, utilities will have to jump through many regulatory hoops. Some of them have to do with increased complexity over ongoing SPP and MISO cost allocation and the Joint Operating Agreement dispute that emerged after Entergy announced its departure from the SPP membership in order to join MISO. Another issue — and this one is unconventional — is that SPP will now have to deal with the federal agency status of WAPA that has a statutory obligation to provide preferential service to a certain group of clients (preference customers) and also falls under different exemptions that apply to federal entities. But those are only minor glitches. Across the ocean, the European Union marked another milestone on its way to consolidating different countries into one common power marketplace. Czech Republic, Hungary, Slovakia and Romania launched a coupled day-ahead electricity market on November 19, 2014. Heading towards the creation of an internal energy market for Europe, this set of harmonized procedures is moving power markets across Europe closer for future integration.

November 2014 4 Consolidation and integration processes on a country- or Editorial even county-level are very tenuous and lengthy; however, Olga Gorstenko even alignment of practices along market interfaces is not an easy task. Initiatives on eliminating seams in Editor interconnected grids through modifications of the Olga Gorstenko existing tools and processes have been taken on by Phone: 778-296-4183 several system operators, especially those located in the Email: [email protected] Eastern Interconnection. PJM and MISO have been working on this within the frames of the Joint and Common Market since 2004. NYISO, PJM, and ISO-NE Advertising & Vendor Relationships have been trying to remove impediments to trade Bruce Colquhoun between the markets through the Broader Regional Phone: (604) 790-3299 Markets initiatives since 2010. On November 5, 2014, Email: [email protected] PJM and NYISO announced implementation of a Have an idea for an article or would like to Coordinated Transaction Scheduling system that would contribute to an upcoming issue? Write to us improve the real-time power scheduling and transmission at [email protected] lines utilization at the interfaces between Pennsylvania To get real-time data updates, follow and New Jersey. NYISO cited improved economic @zedatawatch on Twitter direction of energy flows between market areas and more To access previous issues of ZE DataWatch, efficient utilization of the transmission system as the key go to datawatch.ze.com benefits of the improvement. ZEMA Inquiries I do believe that “improved economic direction of energy Bruce Colquhoun flows” actually translates into price convergence between Phone: (604) 790-3299 regions. Price convergence has been considered a goal or Email: [email protected] at least a benefit of implementing the day-ahead market along with the real-time trading. Price convergence between regions will bring even greater flattening of the regional price differentials. No doubt, it will drive prices lower, making consumers happier. At the request FERC to waiver tariff provisions, “to ensure market same time, consumer happiness usually moves in the prices more accurately reflect[ed] system conditions in reverse direction of trader happiness. Reduction in EIM.” Apparently, according to CAISO, “a series of arbitrage opportunities is not exactly what trading entities conditions that reduce the amount of flexibility and are looking for. Whether appreciated or not, the global information available to the EIM systems is causing the trend of integrating and converging marketplaces will market to appear more constrained than actual push traders to look harder for more and more conditions warrant and triggering unrepresentative high sophisticated ways of locating opportunities demanding prices.” I don’t know about you, but it certainly sounds to faster and faster response. me that somebody added a bit of the margin in the algorithm or perhaps neglected to add some parameters, Ultimately, many ends meet at the selection of software conditions, or something of this nature… And with the and hardware solutions that support the delivery of better noble intentions of realigning neighboring markets in the and faster decisions. And of course, the speed of the West, EIM, as it stands now, has not been the best case of software is not the only factor to consider. November price convergence and arbitrage opportunities reduction. 2014 also brought us the very educational case of CAISO But we are still learning here, right?h that, two weeks after the full launch of the Energy Imbalance Market (EIM) on November 1, 2014, had to

November 2014 5 Power

FERC Expands SPP Market by Integrating Western-UGP, Basin Electric, and Heartland On November 10, 2014, the Federal Energy Regulatory Commission (FERC) announced that it has expanded the Southwest Power Pool, Inc. (SPP) market by integrating into it Western Area Power Administration-Upper Great Plains Region (Western-UGP), Basin Electric Power Cooperative (Basin Electric), and Heartland Consumers Power District (Heartland). As a result, the geographic footprint of the regional power market has been expanded to include significant portion of the Upper Great Plains that spans the Eastern and Western Interconnections of the US electric grid. This area consists of approximately 9,500 miles of transmission lines. Western-UGP owns an extensive system of high-voltage transmission facilities and markets federally generated hydropower in the Pick-Sloan Missouri-Basin Program-Eastern Division of Western. Basin Electric serves 2.8 million customers in territories covering approximately 540,000 square miles, using nearly 2,100 miles of transmission lines and 70 switch yards. Heartland is a public corporation and political subdivision of the State of South Dakota. It provides wholesale power to 28 municipalities in eastern South Dakota, southwest Minnesota, and northwest Iowa, to six South Dakota state agencies, and to one electric cooperative in South Dakota. See the original announcement.

Develop your own power market data warehouse using ZEMA’s best-in-class data collection and validation functionalities. To learn more, book a complimentary ZEMA demonstration.

Argus Adds New NYISO Power Forwards and Heat Rates Data Modules On November 21, 2014, the following markets were added to the Power Forwards and Heat Rates data modules of the Argus Forward Curves publication: Market ID Description 215 NYISO-Zone B 216 NYISO-Zone D 217 NYISO-Zone E 218 NYISO-Zone H 219 NYISO-Zone I 220 NYISO-Zone K See the original announcement.

ZEMA provides data visualization and dashboard reporting tools specifically designed for power and energy market participants. To learn more, book a complimentary ZEMA demonstration.

November 2014 6 Power

Czech Republic, Hungary, Romania, and Slovakia Integrated into European Power Markets On November 19, 2014, 4M Market Coupling (4M MC) was successfully launched, integrating the markets of OTE in Czech Republic, HUPX in Hungary, OPCOM in Romania, and OKTE in Slovakia. The 4M MC, as extended by Romania, replaced the Trilateral Coupling, in operation since 2012 between Czech Republic, Hungary, and Slovakia, and is considered as an intermediate step towards the single European day-ahead market. The 4M MC uses the Price Coupling of Regions (PCR) solution, a set of harmonized procedures consistent with the other European regions already in coupling operations. The PCR solution is used to connect the power markets across Europe and it prepares grounds for smooth future integration of the CEE region and the rest of Europe. See the original announcement.

The PCR solution will generate many new data points for the European electricity market. ZEMA’s advanced data collection capabilities will ensure that market participants remain up to date on new developments, since ZEMA already collects over 2,000 electricity records. To learn more about how ZEMA simplifies the data collection process, visit http://www.ze.com/the-zema-suite/.

Thomson Reuters Offers Forecast Tool for Brazilian Power Markets On November 18, 2014, Thomson Reuters launched Power Brazil, a new forecast model tool for the energy market in Brazil that includes Thomson Reuters’ Hydro Balance analysis. Based on its knowledge and experience from global power markets, Thomson Reuters Commodities Research & Forecasts hydrological model expands coverage to all major Brazilian hydro power regions, enabling sector traders to gain greater intelligence and insight into local energy markets. The Hydro Balance (HB) is an index that describes the total potential for hydro power production in the long and short term. While the measurement of reservoir content only describes the situation next to the power plants, the HB incorporates other natural variables which influence the hydro power system and thus gives traders an increased understanding of what to expect in the long run. The product offering also provides proprietary electric consumption, wind generation, and power outage forecasts for the Brazilian power system. See the original announcement.

ZEMA collects almost 100 records from Thomson Reuters on a daily basis. To learn more, visit http://www.ze.com/the-zema-solutions/ data-coverage/.

PJM and NYISO Implement Coordinated Transaction Scheduling PJM Interconnection (PJM) and the New York Independent System Operator (NYISO) are streamlining the flow of electricity across their mutual borders. The new Coordinated Transaction Scheduling (CTS) system, effective November 4, 2014, has improved the scheduling of wholesale electricity between New York State and the PJM regions where they border Pennsylvania and New Jersey. This solution was designed to help market participants access the least expensive source of power within the two regions; it helps lower the combined energy production cost of the two systems. CTS is among other initiatives that the NYISO and PJM have undertaken to improve interregional scheduling practices and power flows, some of which include intra-hour transaction scheduling and coordinating operations to cost-effectively solve transmission system constraints. See the original announcement.

November 2014 7 Power Nodal Exchanges to Form Nodal Clear as a Derivatives Clearing Organization On November 3, 2014, Nodal Exchange announced that it has formed a wholly owned subsidiary, Nodal Clear, which will soon submit an application to the US Commodity Futures Trading Commission (CFTC) to be registered as a derivatives clearing organization (DCO). Since its launch in April 2009, all Nodal Exchange contracts have been cleared by LCH.Clearnet Limited (LCH. Clearnet). Nodal Exchange contracts will continue to be cleared by LCH.Clearnet until a transition to Nodal Clear is completed. This transition is planned for fall 2015 pending regulatory approval of Nodal Clear. See the original announcement.

For more information on the North American electricity market, view ZEMA, ZE’s data management solution for electricity market participants, at http://www.ze.com/the-zema-solutions/data-coverage/.

NYMEX Revises MISO Michigan Hub Electricity Contract Names and Sizes On November 24, 2014, the New York Mercantile Exchange (NYMEX) revised the names and sizes for the two electricity futures contracts listed below: Current Contract Title New Contract Title Code Chapter MISO Michigan Hub Peak Calendar Month MISO Michigan Hub Real-Time Peak Calendar-Month HM 776 LMP Futures 5 MW Futures MISO Michigan Hub Off-Peak Calendar MISO Michigan Hub Real-Time Off-Peak HJ 776A Month LMP Futures Calendar-Month 5 MW Futures The amendments were implemented so that the contracts’ rules reflect standard cash market trading practices. The sizes of the MISO Michigan Hub Peak Calendar-Month LMP Futures (Code HM, Chapter 776) and MISO Michigan Hub Off-Peak Calendar-Month LMP Futures (Code HJ, Ch. 776A) are being adjusted to a flow rate of 5 megawatts (MW) per hour. Specifically, the size of the MISO Michigan Hub Peak Calendar Month LMP Futures will change from 2.5 MW multiplied by the number of peak hours in the contract month to 80 megawatt hours (MWh). The size of the MISO Michigan Hub Off-Peak Calendar Month LMP Futures will change from 2.5 MW multiplied by the number of off-peak hours in the contract month to 5 MWh. The subject contracts are listed for trading on CME Globex and the NYMEX trading floor, as well as for submission for clearing through CME ClearPort. The trading hours for open outcry are Monday – Friday 9:00 a.m. – 2:30 p.m. New York Time/NYT (8:00 a.m. – 1:30 p.m. Chicago Time/CT). The hours for CME Globex and CME ClearPort are Sunday – Friday 6:00 p.m. – 5:15 p.m. NYT (5:00 p.m. – 4:15 p.m. CT) with a 45-minute break each day beginning at 5:15 p.m. NYT (4:15 p.m. CT).

To view additional changes, see the original announcement.

NYMEX Modifies Block Trade Minimum Threshold for North American Electricity Futures and Options On November 24, 2014, NYMEX modified its block trade minimum threshold for the following electricity futures and options contracts: Product Title New Block Trade Minimum Threshold MISO Michigan Hub Real-Time Peak Calendar-Month 5 MW Futures 95 contracts MISO Michigan Hub Real-Time Off-Peak Calendar-Month 5 MW Futures 100 contracts ISO New England Mass Hub Peak LMP 5 MW Option on Calendar Futures Strip 4 contracts See the original announcement.

November 2014 8 Power ERCOT Mobile App Offers Updates in Five Minute Intervals As of November 13, 2014, the Electric Reliability Council of Texas (ERCOT) updated its free ERCOT Energy Saver mobile app to improve access to information about electricity demand, generation and available reserves, updated in five-minute intervals. The ERCOT Energy Saver mobile app allows consumers to access real-time electric grid and marketing conditions from their mobile devices. The app also continues to offer wholesale prices for each load zone and other information about ERCOT, the grid and the competitive electric market. See the original announcement.

The ZEMA graph below shows hourly ERCOT Nodal Day Ahead LMP pricing from November 16, 2014 – November 24, 2014. The data is represented in $USD/MWh and has a range from a low of around $20 USD/MWh to a high of over $180 on November 18, 2014. The data is collected directly from an ERCOT Nodal report. The rise and fall of prices correlates mostly with on and off-peak hours of electricity usage.

November 2014 9 Petroleum

Platts to Launch ICE Gasoil EFS, ESS Assessments at Singapore Close On January 2, 2015, Platts will extend its existing suite of FOB Singapore 500 ppm-ICE Gasoil EFS (exchange of futures for swaps) assessments; it will also launch ESS (exchange of swaps for swaps) paper assessments and Intercontinental Exchange (ICE) Gasoil frontline swap assessments at 4:30 p.m. Singapore time (0830 GMT). These new assessments will be launched under the names “Gasoil EFS,” “Gasoil ESS,” and “Gasoil Frontlines,” spanning 12 calendar months and three quarters. The assessed derivatives are differentials between FOB Singapore 500 ppm paper, ICE gasoil futures (EFS), and the ICE gasoil frontline swap (ESS). See the original announcement.

ZEMA combines strengths in oil market data collection, visualization, and analysis, equipping traders and analysts to make informed business decisions. To learn more, book a complimentary ZEMA demonstration.

Platts Lists New Clean Medium Range Tanker Freight Rate Assessment Effective November 24, 2014, Platts listed a new clean Medium Range tanker freight rate assessment reflecting flows from US Gulf Coast to North Brazil. This assessment reflects the US Gulf Coast to North Brazil route for a clean MR tanker carrying a cargo of 38,00mt and reflects loadings from Houston and New Orleans and discharge at ports including Manaus, Belem, and Sao Luis. The new assessment’s purpose is to capture newly established supply trends of refined products out of the region following significant structural changes to the US oil industry and would reflect modern MR tonnage. See the original announcement.

Platts Publishes Libyan Crude Mesla Official Selling Price Effective November 1, 2014, Platts began publishing the official selling price for Libya’s Mesla crude. In so doing, Platts now publishes a complete portfolio of Libya’s crude export slate. Mesla crude OSP will be published on a monthly basis as received from the Libyan National Oil Corporation. See the original announcement.

To learn more about Libyan crude oil prices, use ZEMA to view reports from Platts. To learn more, visit http://www.ze.com/ the-zema-solutions/.

Argus Introduces New Market to Forward Curves Publication On December 1, 2014, Argus added the following new market to its Forward Curves data module. This new market was introduced with effect from November 1, 2014. Market ID Description 221 ANS (Alaska North Slope) See the original announcement.

November 2014 10 Petroleum

Argus Adds New Gulf Coast Markets to Its Refined Products Module On November 21, 2014, Argus introduced the following new markets to its Forward Curves publication and the Refined Products data module: Market ID Description 207 Gulf Coast naphtha 40N+A 208 Gulf Coast naphtha full range 209 Gulf Coast naphtha LSR (light straight run) 210 Gulf Coast natural gasoline 211 Gulf Coast gasoline waterborne conventional 87 octane 212 Gulf Coast gasoline Colonial pipeline conventional 93 octane 213 Gulf Coast reformate 214 Gulf Coast alkylate

See the original announcement.

Argus Lists New East Chinese Propylene Oxide Assessments On November 5, 2014, Argus added the following new series to its Argus DeWitt Propylene publication and data module. The following PA codes will appear in the dpropylene csv file in the DPropylene folder of server ftp.argusmedia.com. Time Continuous PA Code Price Type Description Unit Frequency Stamp Forward PA0015265 0 1 0 Propylene oxide del east China CNY/t CNY/t Weekly PA0015265 0 2 0 Propylene oxide del east Chian CNY/t CNY/t Weekly PA0015266 0 1 0 Propylene oxide del east China USD/t USD/t Weekly PA0015266 0 2 0 Propylene oxide del east China USD/t USD/t Weekly

See the original announcement.

ZEMA collects a range of Argus petrochemical products data and can easily transform this information into relevant market analyses. To learn more, visit http://www.ze.com/the-zema-solutions/.

Argus Creates Gasoil Diesel Winter Assessment to Caspian Market Report On November 5, 2014, Argus added a new fortnightly assessment for winter diesel cpt Aktau USD/t to its Argus Caspian Market report. Relevant codes appeared in the DARK file of the DARK folder on server ftp.argusmedia.com. Continuous PA Code Time Stamp Price Type Description Unit Frequency Forward PA0015260 0 1 0 Gasoil diesel winter cpt Aktau USD/t Fortnightly PA0015260 0 2 0 Gasoil diesel winter cpt Aktau USD/t Fortnightly

See the original announcement.

November 2014 11 Petroleum NYMEX Lists Canadian Heavy Crude Oil BALMO Futures Effective November 24, 2014, NYMEX listed a cash-settled Canadian Heavy Crude Oil BALMO Futures (code CHB) for trading on the NYMEX trading floor and CME Globex. This listing can be submitted for clearing via CME ClearPort. This new balance-of-month contract is listed for two consecutive months. Specifications of the contract are below: Contract Name Canadian Heavy Crude Oil BALMO Futures Commodity Code CHB Chapter 1088 Settlement Type Financial Contract Size 1,000 barrels Trading shall cease on (1) Canadian business day prior to the Notice of Shipments Termination of Trading (NOS) date on the Enbridge Pipeline. The NOS date occurs on or about the 20th calendar day of the month, subject to confirmation by Enbridge Pipeline. Minimum Price Fluctuation $0.001 Final Settlement Price Tick $0.001 First Listed Month January 2015 Listing Convention Two Months

See the original announcement.

ZEMA collects a range of NYMEX crude futures data, including data from the NYMEX Futures Reference file and the NYMEX Futures Settlement report for petroleum and other liquids. To receive a complimentary ZEMA demonstration, visit http://www.ze.com/book-a-demo/.

NYMEX Adds Crude Oil Mid-Curve Options Effective November 24, 2014, NYMEX listed Crude Oil Mid-Curve Option contracts (code LM) for trading on the NYMEX trading floor and CME Globex as well as for submission for clearing via CME ClearPort. CME listed five consecutive mid-curve options that expire on a June-December cycle. For the Jun 2015 Crude Oil Mid-Curve Option, there are five mid-curve options exercised as follows: Mid-Curve Option Underlying Light Sweet Crude Oil Futures Underlying Light Sweet Crude Oil Futures (June 2015) (December 2015) LM1 June 2016 December 2016 LM2 June 2017 December 2017 LM3 June 2018 December 2018 LM4 June 2019 December 2019 LM5 June 2020 December 2020

Contract Name Crude Oil Mid-Curve Option Commodity Code LM Chapter 468 Option Style American Underlying Futures Light Sweet Crude Oil Futures Termination of Trading Trading shall cease three business days before the termination of trading in the underlying futures contract Minimum Price Fluctuation $0.01 Strike Prices Twenty strike prices in increments of $0.50 per barrel above and below the at-the-money strike price; and additional ten strike prices in increments of $2.50 per barrel above and below the highest and lowest fifty-cent increment as described before. First Listed Option June 2015 Settlement Type Exercise into Futures

See the original announcement.

November 2014 13 Petroleum

ICE Futures Europe Launches Two Gulf Coast Gasoline Futures Effective December 1, 2014, two new energy futures contracts have taken effect, according to ICE. The new refined product futures contracts, subject to completion of relevant regulatory processes, will be available for trading at ICE Futures Europe and cleared at ICE Clear Europe. Contract Specifications: • Gulf Coast Unl 87 Gasoline Prompt Pipeline (Platts) vs. RBOB Gasoline 1st Line Future • Gulf Coast Unl 87 Gasoline Prompt Pipeline (Platts) vs. RBOB Gasoline 1st Line Balmo Future See the original announcement.

ZEMA, ZE’s data management solution, collects many ICE records. To learn more about how ZEMA can collect, aggregate, and analyze data, book a complimentary ZEMA demonstration now at http://www.ze.com/book-a-demo/.

EIA Releases New Tool for Oil Import Analysis On November 20, 2014, the Energy Information Administration (EIA) released a new US Crude Oil Import Tracking Tool that allows policymakers, analysts, and the public to more easily track trends in crude oil imports. Users can sort and display crude oil imports by month or year, by crude type (i.e., light, medium, heavy), country source, port of entry, processing company, processing refinery, and more. The tool features graphing and mapping capabilities and a built-in help function. The tool attempts to shed light on the adjustments to imports being made in response to growing production of crude oil within the United States. See the original announcement.

ZEMA collects nearly 300 records from the EIA, many of which contain oil market data. To learn more about ZEMA’s vast data library, visit http://www.ze.com/the-zema-solutions/data-coverage/.

GFI Empire Electronic Brokerage Launches Block Futures Effective November 30, 2014, GFI Group Inc. announced that it will offer block future services of Crude Oil, Natural Gas, and Refined Products block futures on its EnergyMatch platform. Energy options will also be added in early 2015.

See the original announcement.

Platts to End Chile Marine Diesel Oil Assessment On May 1, 2015, Platts will cease publishing its daily spot assessment of marine diesel oil (MDO) delivered in Valparaiso, Chile. This discontinuation reflects a shift in the Chilean market away from marine diesel oil, towards marine gasoil (MGO). Platts will continue to publish a daily assessment of MGO delivered to Valparaiso, Chile. The MDO assessment is currently published on Platts Global Alert page 870, in Platts Bunkerwire, and in the Platts price database under code AANUA00.

See the original announcement.

November 2014 14 Petroleum NYMEX to List Cash-Settled Louisiana Light Sweet Crude Oil Futures On December 8, 2014, the New York Mercantile Exchange (NYMEX) will list three new cash-settled Louisiana Light Sweet (LLS) crude oil futures on the NYMEX trading floor and Chicago Mercantile Exchange (CME) Globex. These contracts will be available for submission for clearing through CME ClearPort. New futures may also be block traded. Product First Minimum Value Block Trade Code Contract Listed Product Name Listing Schedule Price Per Minimum CPC/ Size Contract Fluctuation Tick Threshold Globex Month CPC/Floor/GLBX: One LLS (Argus) vs. month and the following 1000 LBB/LBB Brent BALMO month listed 10 business $0.01 Jan-15 $10 5 barrels Futures days prior to the start of the contract month CPC/Floor/GLBX: One LLS (Argus) vs. month and the following 1000 LWB/LWB WTI BALMO month listed 10 business $0.01 Jan-15 $10 5 barrels Futures days prior to the start of the contract month LLS (Argus) vs. CPC/Floor/GLBX: 30 con- 1000 LLR/LLR Brent Financial $0.01 Jan-15 $10 5 secutive months barrels Futures

See the original announcement.

The ZEMA graph below displays monthly Brent Crude Last Day Futures with a forecast date of November 21, 2014. This data is collected from CME. Extending from January 2015 until November 2016, the graph shows a steady increase in oil pricing ranging from approximately $80 USD/bbl to $87 USD/bbl, as shown by the orange threshold filter.

November 2014 12 Petroleum

Platts to Discontinue Northwest European Dioctyl Phythalate Assessments Effective January 2, 2015, Platts will discontinue its Northwest European dioctyl phthalate assessments while continuing its price assessments for other oxo-alcohols. The decision was made following a comprehensive review of feedback where Platts has decided to reconsider its initial proposal published August 7 to also discontinue price assessments for other oxo alcohols including: normal butanol, iso-butanol, 2-ethly-hexanol, and phthalic anhydride— and will continue to publish weekly assessments for each product. See the original announcement.

Platts to Discontinue Q1, Q2 Benzene Assessments Effective January 2, 2015, Platts will discontinue its Q1 and Q2 CIF ARA benzene assessments as published on page PCA60 and found under the following codes in the Platts price database: • Benzene CIF ARA Q1 USD AAIBN00 Monthly Average: AAIBO00 • Benzene CIF ARA Q2 USD AAIBP00 Monthly Average: AAIBQ00 Also, following a review of feedback, Platts has reconsidered its original April 6 proposal on the subject and is now discontinuing its T2 FOB ARA toluene assessment and will continue to publish daily assessments. See the original announcement.

Platts Discontinues Gasoil 0.1% and Fuel Oil 3.5% from Power Cost Comparisons Effective November 3, 2014, Platts discontinued Gasoil 0.1% and Fuel Oil 3.5% from its power and gas cross-fuels comparisons tables. The calculations were discontinued from the Generating Fuel Cost Comparisons and Cross Fuel Comparisons tables published in European Power Daily and European Gas Daily. Platts continues to publish fuel cost comparisons for Fuel Oil 1%. See the original announcement.

Platts to Cease Publishing ARPEL Postings On November 31, 2014, Platts announced that by the end of 2014, it will cease publishing consumer price postings in Latin America that have been gathered by the Association Regional de Empresas del Sector Petroleo (ARPEL). This discontinuation reflects a diminished appetite for this data from Platts subscribers. The ARPEL postings are currently published in full each day on Platts Global Alert page 474, with a smaller section published daily in Platts Latin American Wire. All of the postings are also in the Platts price database under data codes beginning with “ARP.” See the original announcement.

November 2014 15 Petroleum NYMEX Delists Seven Low Sulphur Gasoil Based Futures and Options Effective November 10, 2014, NYMEX has delisted from trading previously listed contract months for seven low sulphur Gasoil based futures and options contracts. There was no open interest in the delisted contract months. More specifically, NYMEX delisted from trading previously listed contract months for the five contracts listed below: Commodity Code Listing Schedule Prior to Listing Schedule as of Contract Months Delisted Contract Title and Rulebook November 10, 2014 – November 10, 2014 – as of November 10, 2014 Chapter CPC, Globex, and NX Pit CPC, Globex, and NX Pit Low Sulphur CPC/Globex – Current Monthly contracts up to January 2015 contract Gasoil Average LSO/252 year + 4 and including month and beyond Price Option Globex – 12 months December 2014 Low Sulphur CPC/Globex – Current Monthly contracts up to Gasoil (100mt) January 2015 contract LSM/309 year + 4 and including Calendar Month month and beyond December 2014 Futures Globex – 12 months Low Sulphur CPC/Globex – Current Monthly contracts up to Gasoil (100mt) January 2015 contract LSM year + 4 and including Penultimate Day month and beyond December 2014 Futures Globex – 12 months Singapore Gasoil CPC/Globex – Current Monthly contracts up to (Platts) vs. Low January 2015 contract LSS/295 year + 4 and including Sulphur Gasoil month and beyond December 2014 Futures Globex – 12 months ULSD 10ppm Cargoes CIF Med CPC/Globex – Current Monthly contracts up to January 2015 contract (Platts) vs. Low LSL/372 year + 4 and including month and beyond Sulphur Gasoil Globex – 12 months December 2014 Futures

See the original announcement.

Platts to Edit Specifications of FOB ARA Solvent Effective January 2, 2015, Platts will edit the specifications for its FOB ARA solvent and isomer/virgin-grade mixed xylenes assessments. Platts currently assesses solvent-grade mixed xylenes that conforms to ASTM 843 standards, with a maximum ethyl-benzene content of 55-60%, non-aromatics content of 4% maximum and metaxylene, paraxylene, and orthoxylene content at a maximum of 15-20%. Platts proposes to reduce the ethyl-benzene content to a maximum of 20%, eliminate the limits on metaxylene, paraxylene and orthoxylene and reduce the non-aromatics content to 2% maximum to better reflect industry standards. Platts assesses virgin/isomer-grade mixed xylenes that conforms to the ASTM 843 standards, with a maximum ethylbenzene content of 20%, a non-aromatics content of 1% maximum and a minimum paraxylene content of 18%. Platts proposes to increase the non-aromatics content to 2% maximum to better align its solvent and virgin/isomer grades. Platts invites feedback surrounding all aspects of this methodology enhancement including but not limited to the prevailing industry standard of a bromine content of maximum 20 ppm on both grades. See the original announcement.

Platts to Base Full Cargoes on Malaysian Tapis and Indonesian Minas Crude Oil Effective December 1, 2014, Platts has based its assessments on full cargoes for Malaysia’s Tapis crude oil and Indonesia’s Minas crude oil. Platts will also discontinue the use of the partials mechanism to assess Minas and Tapis. Instead, Platts will publish bids, offers, and transactions for full parcels of either grade. Further, Platts will

November 2014 16 amend the cargo size reflected in these grades to 100,000 barrels for Minas (down from 200,000 barrels currently) and Petroleum 300,000 barrels for Tapis (down from 450,000 barrels currently), in line with existing trade in these grades. These changes reflect evolving dynamics in Southeast Asia’s crude oil markets. See the original announcement.

Argus to Replace NWE Toluene, Paraxylene, and Mixed Xylene Assessments On December 12, 2014, Argus will cease publishing the following assessments. These assessments are currently found in Argus DeWitt Toluene and Xylenes Daily. Changes apply to information in the dtxdaily data files in the /DTXDaily folder of server ftp.argusmedia.com. Continuous PA Code Time Stamp Price Type Description Unit Frequency Forward PA0012303 6 17 1 Toluene fob NWE 30 day avg month USD/t Daily PA0012304 6 17 1 Paraxylene fob NWE 30 day avg month USD/t Daily Mixed xylenes fob NWE 30 day avg PA0012305 6 17 1 USD/t Daily month Argus will replace these codes with the following codes, which began to be published on November 7, 2014: Continuous PA Code Time Stamp Price Type Description Unit Frequency Forward PA0015262 6 17 1 Toluene fob NWE MTD month USD/t Daily PA0015263 6 17 1 Paraxylene fob NWE MTD month USD/t Daily PA0015264 6 17 1 Mixed xylenes fob NWE MTD month USD/t Daily See the original announcement.

NYMEX Permits Block Trading in Crude Oil BALMO Futures and MidCurve Options On November 24, 2014, NYMEX introduced block trading for the following contracts: Product Title Block Trade Minimum Threshold Canadian Heavy Crude Oil (Net Energy) BALMO Futures 5 contracts Crude Oil MidCurve Options 5 contracts See the original announcement.

CME Amends NY Harbor ULSD Crack Spread, RBOB Gasoline Calendar Spread, and Other Petroleum Option Contracts Effective November 27, 2014, NYMEX amended the CME Globex listing cycles of the following four energy options contracts: Product Rulebook NEW CME Globex Code CPC/ Product Name Current Listing Schedule Chapter Listing Schedule Globex Gasoline Euro-bob Oxy NEW Barges 7HO/7HO 1238 CPC/Floor/GLBX: 12 months 1 month (Argus) Average Price Option CPC/Floor/GLBX: Current Year + 3 CH/CHY NY Harbor ULSD Crack Spread Option 350 1 month Years + 1 month CPC/Floor/GLBX: Eleven consecu- RBOB Gasoline Calendar Spread tive one-month spreads. Two two- ZA/ZAY 388 1 month Option – 1 month month spreads. One three-month spread. Six six-month spreads. CPC/Floor: Current year + 7 years OS/OSX Brent Crude Oil Option 376 18 months GLBX: 38 months See the original announcement.

November 2014 17 Natural Gas

Platts to Add New Monthly Listing for Transco, Zone 5 Delivered On January 2, 2015, Platts will add to its monthly bidweek listing Transcontinental Gas Pipeline Corp. Zone 5 delivered. This new listing will cover late December bidweek trading for January delivery. Trading in the delivered monthly market in Transco’s Zone 5, which extends from the Georgia/South Carolina border to the Virginia/Maryland border, has demonstrated a level that supports a robust pricing location. Platts already publishes daily spot gas prices for this location. The description for the daily spot gas point as published in the Platts methodology and specifications guide is as follows: Transco, zone 5 delivered Deliveries from Transcontinental Gas Pipe Line on the 30-inch, 36-inch and 42-inch lines from the Georgia/ South Carolina border to the Virginia/Maryland border. Deliveries into Transco at the Pleasant Valley receipt point near Fairfax, Virginia, from Dominion’s Cove Point LNG terminal are not included. The new monthly location will appear in the “Northeast” section of the “Market Center Spot Gas Prices” table in Inside FERC’s Gas Market Report and Platts Natural Gas Alert pages 433 and 495. Additionally, the new listing will appear in the “Northeast” section of the “Market Center Bidweek Physical Basis Prices” table in Inside FERC’s Gas Market Report. See the original announcement.

The graph below illustrates Henry Hub Natural Gas Futures data from December 2014 to November 2015 with a forecast date of November 21, 2014. With a high of $4.4 USD/MMbtu in January 2015, to a low of $3.7 USD/MMbtu in May 2015, pricing generally decreases between the period of January 2015 to May 2015. This data is collected from forward curve analyses from a CME data report.

November 2014 18 Natural Gas Platts to Create Sublistings for Transco, Zone 6 Non-New York North On January 2, 2015, Platts will add to its daily and monthly bidweek price surveys sub-listings for Transco Zone 6, non-New York North. Platts’ new listings cover late December bidweek trading for January delivery, as well as January 3-5 for the daily market, covering trade date January 2. In the non-New York portion of Transco’s Zone 6, which extends from the Virginia/ Maryland border to markets south of Linden, New Jersey, price values have bifurcated since last winter, with delivered values on the capacity-constrained portion of the zone south of Station 195 at the Maryland/Pennsylvania border rising well above those north of the station. To bring more transparency to the pricing region, Platts is adding a listing for the northern portion of Transco’s Zone 6 non-New York, which will be composed of only transactions delivered from Transco to markets and interconnects north of Station 195 in York, Pennsylvania, excluding deliveries in the Leidy Hub area and to New York citygates downstream of Nat Gas Linden, New Jersey. There will be no change to the existing Platts listing for Transco, Zone 6 non-New York, which is composed of all non-New York delivered transactions both north and south of Station 195. The description for the new location will be: Transco, zone 6 non-NY North (daily and monthly survey) Deliveries from Transcontinental Gas Pipe Line from Station 195 in York, Pennsylvania, to the Linden, New Jersey, compressor station and on the Leidy Line south of Clinton County, Pennsylvania. The non-New York North point does not include deliveries to Public Service Electric and Gas in New Jersey, whose supply is taken downstream of Linden. The proposed Transco Zone 6 non-NY North listings will appear in the “Northeast” section of the “Market Center Spot Gas Prices” table in Inside FERC’s Gas Market Report, Energy Trader, and Gas Daily Price Guide, as well as in the “Citygates” section of Gas Daily’s “Daily price survey” table, and Platts Natural Gas Alert pages 433, 495, and 516. Additionally, the new listings will appear in the “Northeast” section of the “Market Center Bidweek Physical Basis Prices” table in Inside FERC’s Gas Market Report. See the original announcement.

Manage North American natural gas data with ease using ZEMA’s data collection, validation, analytic, and visualization functionalities. To learn more, book a complimentary ZEMA demonstration.

Argus Adds Assessments to International LPG Publication On November 21, 2014, Argus added new assessments to its Argus International LPG publication and data feed. These series can also be found in the dpgus and dpg data file in the /DLPG folder of server ftp.argusmedia.com. Continuous PA Code Time Stamp Price Type Description Unit Frequency Forward PA0008795 2 4 1 Butane Mt Belvieu Enterprise VWA month USC/USG Daily PA0008796 2 4 1 Butane Mt Belvieu LST VWA month USC/USG Daily PA0008797 2 4 1 Ethane Mt Belvieu Enterprise VWA month USC/USG Daily Ethane/propane mix Mt Belvieu PA0008798 2 4 1 USC/USG Daily Enterprise VWA month Isobutane Mt Belvieu Enterprise PA0008799 2 4 1 USC/USG Daily VWA month Natural gasoline Mt Belvieu Non-Targa PA0008800 2 4 1 USC/USG Daily VWA month Propane Mt Belvieu Enterprise PA0008801 2 4 1 USC/USG Daily VWA month PA0008802 2 4 1 Propane Mt Belvieu LST VWA month USC/USG Daily PA0009967 2 1 1 Propane USGC export month USC/USG Daily See the original announcement.

November 2014 19 Natural Gas Argus Creates New Propane Conway and Targa Assessments On November 17, 2014, Argus added new series to its Argus NGL Americas data module. Changes applied to information in the dngl file in the DNGL folder of server ftp.argusmedia.com. Time Price Continuous PA Code Description Unit Frequency Stamp Type Forward USC/ PA0015270 2 8 1 Propane Conway less Propane Mt Belvieu LST month Daily USG Propane Conway less Propane Mt Belvieu Enterprise USC/ PA0015271 2 8 1 Daily month USG USC/ PA0015272 2 8 1 Propane Targa less Propane Mt Belvieu LST month Daily USG Propane Targa less Propane Mt Belvieu Enterprise USC/ PA0015273 2 8 1 Daily month USG Propane Conway less Propane Mt Belvieu LST VWA USC/ PA0015274 2 4 1 Daily month USG Propane Conway less Propane Mt Belvieu Enterprise USC/ PA0015275 2 4 1 Daily VWA month USG Propane Targa less Propane Mt Belvieu LST VWA USC/ PA0015276 2 4 1 Daily month USG Propane Targa less Propane Mt Belvieu Enterprise USC/ PA0015277 2 4 1 Daily VWA month USG Propane Conway less Propane Mt Belvieu LST MTD USC/ PA0015278 2 4 1 Daily VWA month USG Propane Conway less Propane Mt Belvieu Enterprise USC/ PA0015279 2 4 1 Daily MTD VWA month USG Propane Targa less Propane Mt Belvieu LST MTD VWA USC/ PA0015280 2 4 1 Daily month USG Propane Targa less Propane Mt Belvieu Enterprise USC/ PA0015281 2 4 1 Daily MTD VWA month USG See the original announcement.

ZEMA’s advanced data collection, validation, and dashboard reporting functionalities help natural gas market participants gain enhanced business intelligence. To learn more, book a complimentary ZEMA demonstration.

Argus Adds New AOC European Natural Gas Assessments On November 27, 2014, Argus added several new series to its Argus European Natural Gas publication. Relevant PA codes were listed in the DNG module in the DENG folder of server ftp.argusmedia.com. Continuous PA Code Time Stamp Price Type Description Unit Frequency Forward PA0015254 6 1 1 Natural gas AOC Eur/MWh month Euro/MWh Daily PA0015254 6 2 1 Natural gas AOC Eur/MWh month Euro/MWh Daily PA0015255 6 4 1 Natural gas AOC index month Euro/MWh Daily See the original announcement.

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November 2014 20 Nat Gas

CME Lists New Columbia, Dominion, South Point, and Texas Eastern Zone M-3 Natural Gas Options Effective November 24, 2014,the New York Mercantile Exchange, Inc. (NYMEX) listed the following new financially settled natural gas option contracts: Option Rule Underlying Option Contract Option Code Underlying Futures Contract Chapter Futures Columbia Gas TCO Natural Gas (Platts Columbia Gas TCO Natural Gas CFP 759 CFS IFERC) Pipe Option (Platts IFERC) Fixed Price Futures Dominion, South Point Natural Gas Dominion, South Point Natural Gas DPP 760 DSF (Platts IFERC) Pipe Option (Platts IFERC) Fixed Price Futures Texas Eastern Zone M-3 Natural Gas Texas Eastern Zone M-3 Natural Gas TEP 761 Z5P (Platts IFERC) Pipe Option (Platts IFERC) Fixed Price Futures

These new contracts will remain listed for one month on Chicago Mercantile Exchange (CME) Globex and for 36 consecutive contract months on the NYMEX trading floor. They are available for submission for clearing through CME ClearPort. See the original announcement.

ICE Endex Introduces Belgian ZTP Natural Gas Futures Effective November 4, 2014, Intercontinental Exchange (ICE) has released Belgian ZTP Natural Gas Futures contracts through ICE Endex. The first Belgian gas futures contract offered for trading is the December 2014 contract and the contracts extend through January 2017. Futures on the Belgian Zeebrugge Trading Point (ZTP) have been developed in conjunction with Fluxys Belgium, Belgium’s natural gas transmission system operator, which currently performs balancing actions on the within day and day ahead ZTP spot markets operated by ICE Endex. Along with the ZTP futures, locational spread contracts between the Dutch Title Transfer Facility (TTF) and the Belgian ZTP gas futures markets will also be provided by ICE Endex. The ZTP futures are physically delivered and complement ICE Endex’s existing spot market, which also serves as the Belgian gas balancing market. ZTP futures contracts are available to trade on the ICE trading platform and are cleared by ICE Clear Europe, alongside ICE Futures Europe’s broad energy offering which includes benchmarks in oil, natural gas, coal and emissions. The introduction of Belgian ZTP futures contracts follows recent enhancements to the existing ICE Endex ZTP offering. ICE Endex has an established high calorific ZTP gas spot market, and in August the Belgian spot product suite was extended with contracts for delivery of low calorific gas on the ZTP. By also offering a low calorific gas spot market, ICE Endex has been able to extend the location spread for market participants, which now includes the TTF-ZTP low calorific gas qualities, as well as the Belgian high and low calorific gas qualities (ZTP and ZTPL). See the original announcement.

ZEMA collects many ICE reports. To learn more about how ZEMA can collect, aggregate, and analyze data, book a complimentary ZEMA demonstration now at http://www.ze.com/book-a-demo/.

November 2014 21 Nat Gas

NYMEX Introduces Block Trading for Columbia, Dominion, and Texas Eastern Natural Gas Pipe Options On November 24, 2014, NYMEX introduced block trading for the following products: Product Title Block Trade Minimum Threshold Columbia Gas TCO Natural Gas (Platts IFERC) Pipe Option 15 contracts Dominion, South Point Natural Gas (Platts IFERC) Pipe Option 15 contracts Texas Eastern Zone M-3 Natural Gas (Platts IFERC) Pipe Option 15 contracts

See the original announcement.

CME Amends Henry Hub Calendar Spread Option Contract Effective November 27, 2014, NYMEX amended the CME Globex listing cycles of the following energy options contract: Product Code Rulebook NEW CME Globex Product Name Current Listing Schedule CPC/Globex Chapter Listing Schedule CPC/Floor/GLBX: Options on one month calen- Henry Hub Natural dar spread are available for the next 24 expira- IA/IAY Gas Calendar Spread 391 tions. For two month spread, six month spread 1 month Option – 1 month and twelve month spread, options are listed for the next twelve expirations.

See the original announcement.

November 2014 22 Coal

Platts to Change Calorific Value Basis of Russian and Poland Baltic Coal Assessments On January 2, 2015, Platts will change the calorific value basis of its weekly 90-day Russian Baltic 6,400 kcal/kg GAR and Poland Baltic 6,300 kcal/kg GAR thermal coal price assessments to 6,000 kcal/kg NAR. Platts will do so because it claims the new calorific value is closer to most of thermal coal bought by European buyers, particularly into Amsterdam-Rotterdam-Antwerp. See the original announcement.

The ZEMA graph below illustrates the change in the average weekly production of coal in the US from November 2009 until November 2014. Ranging from approximately a 15 Mt low in December 2009 to a 20 Mt high in December of 2011, production had the most volatility during the period 2010-2012 within the last 5 years. This data is retrieved from an EIA report.

November 2014 23 Softs and Metals

SOFTS Platts to Publish Singapore Time Sugar Futures Assessments On November 17, 2014, Platts announced that it will soon begin publishing 16:30 Singapore time assessments of Intercontinental Exchange (ICE) Sugar No. 11 futures and ICE White Sugar futures (LIFFE 5). The assessments will include the first three contracts listed by the exchange for each futures contract from the date of publication. Platts will maintain a rolling schedule in line with the ICE expiration schedules for each futures contract. This proposal accompanies changes being discussed to reflect the daily market value at 16:30 Singapore time for a range of Thai sugar assessments. The Thais currently stamp an assessment of sugar futures at 16:30 London time. See the original announcement.

ZEMA, a market data management solution for agricultural industry participants, collects real-time information about commodity prices and transforms this into sophisticated forward curve analyses. To learn more, book a complimentary ZEMA demonstration.

Argus Adds New Assessments to Argus Biomass Report and Data Module On November 5, 2014, Argus introduced several new assessments to the Argus Biomass report and data module. These changes apply to the dabm files in the DABM folder on ftp.argusmedia.com. Continuous PA-code Description Start date Frequency forward PA0006549 4 Wood pellets cif ARA USD/t quarter 05-Nov-2014 Weekly PA0006549 4 Wood pellets cif ARA USD/t quarter 05-Nov-2014 Weekly PA0009425 4 Wood pellets fob Baltic EUR/t quarter 05-Nov-2014 Weekly PA0009425 4 Wood pellets fob Baltic EUR/t quarter 05-Nov-2014 Weekly PA0011612 4 Wood pellets fob Portugal EUR/t quarter 05-Nov-2014 Weekly PA0011612 4 Wood pellets fob Portugal EUR/t quarter 05-Nov-2014 Weekly PA0011613 4 Wood pellets export price fob northeast USA quarter 05-Nov-2014 Weekly PA0011614 4 Wood pellets export price fob northeast USA quarter 05-Nov-2014 Weekly PA0011614 4 Wood pellets export price fob northeast USA quarter 05-Nov-2014 Weekly PA0011616 4 Wood pellets export price fob southwest Canada quarter 05-Nov-2014 Weekly PA0011616 4 Wood pellets export price fob southwest Canada quarter 05-Nov-2014 Weekly PA0011916 4 Wood chips cif NWE EUR/GJ quarter 05-Nov-2014 Weekly PA0011916 4 Wood chips cif NWE EUR/GJ quarter 05-Nov-2014 Weekly

See the original announcement.

Argus Introduces New RIN Americas Biofuels Assessments On November 3, 2014, Argus added several new assessments to its Argus Americas Biofuels publication and Argus US West Coast Products publication. New series were added to the duse file in the DUSEthanol folder and the duswcprod file in the DUSWCPROD folder of server ftp.argusmedia.com. The assessments have time stamps of 2; are price types 1, 2, and 8; and have a continuous forward rate of 0.

November 2014 24 Softs and Metals PA-Code Description Unit Frequency PA0015257 RIN advanced biofuel 2015 USC/RIN Daily PA0015257 RIN advanced biofuel 2015 USC/RIN Daily PA0015257 RIN advanced biofuel 2015 USC/RIN Daily PA0015258 RIN biomass-based diesel 2015 USC/RIN Daily PA0015258 RIN biomass-based diesel 2015 USC/RIN Daily PA0015258 RIN biomass-based diesel 2015 USC/RIN Daily PA0015259 RIN renewable fuel (Ethanol) 2015 USC/RIN Daily PA0015259 RIN renewable fuel (Ethanol) 2015 USC/RIN Daily PA0015259 RIN renewable fuel (Ethanol) 2015 USC/RIN Daily PA0015261 Heating Oil ULSH Colonial 67 pipe fob cycle USC/RIN Daily PA0015261 Heating Oil ULSH Colonial 67 pipe fob cycle USC/RIN Daily PA0015261 Heating Oil ULSH Colonial 67 pipe fob cycle USC/RIN Daily PA0015261 Heating Oil ULSH Colonial 67 pipe fob cycle USC/RIN Daily

See the original announcement.

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Successful Farming and AgriCharts Launch New Mobile Application for Farmers On November 3, 2014, Successful Farming and AgriCharts introduced AgMobile, an application that enables farmers to access commodity markets and news information from a mobile device. This application, available in Google Play and the Apple App Store, has the following features: • Dynamic quotes and charts to local cash grain bids • News from Agriculture.com, including market commentary • Grain and livestock futures and options on futures quotes from the Chicago Board of Trade (CBOT), CME, and more • Current and historical charts on all commodities • Live market commentary on the latest developments in corn, soybeans, wheat, cattle, hogs, cotton, and other markets • Custom watchlists • Weather conditions, forecasts, maps, and agriculture-specific data by location • Cash grain bids from local and regional elevators See the original announcement.

CME Group Delists Urea (Prilled) FOB Yuzhny Swaps (Clearing Only) Contracts Effective November 3, 2014, CBOT delisted the April 2015 contract month for the Urea (Prilled) FOB Yuzhny Swaps (Clearing Only) contracts. As such, the last contract month available for submission for clearing via CME ClearPort is April 2015. As published in SER #7203, the listing cycle for Urea (Prilled) FOB Yuzhny Swaps (Clearing Only) Contract has been reduced from 12 consecutive months to six consecutive months. Accordingly, the May 2015 contract will be listed after the expiration of the November 2014 contract. See the original announcement.

November 2014 25 Softs and Metals

METALS

Platts to Launch New UK Hot Rolled Coil Assessment On December 5, 2014, Platts will launch a new weekly assessment covering the UK hot rolled coil market. The price assessment for HRC DDP UK will normalize to delivered duty paid West Midlands; it will capture prime imported and domestically produced material, as well as port stocks. The assessment will normalize to 3 mm thick and up to 1.8 meter wide S275 hot rolled coil. The minimum order size will be 100 mt, with a maximum 500 mt, and the delivery window will be two to six weeks from the date of publication. Payment terms will be normalized to net-40 days, with the assessment in GBP/mt. The weekly assessment will be made on Friday or the closest business day and time stamped to 16:30 London time. See the original announcement.

The ZEMA graph below shows CME Iron Ore Futures Settlement Pricing Data with a forecast date of November 21, 2014. The graph illustrates pricing from November 2014 until November 2016. Pricing ranges from $74 USD/t in November 2014 to $66 USD/t in November 2016. This data is collected from forward curve analysis from a CME data report.

Platts to Release Daily Data Analysis on Turkish Rebar Billet and Scrap Markets On December 1, 2014, Platts launched a new series of daily data analysis identifying market trends in the Turkish rebar billet and scrap markets. The Platts Turkey ARC Steel Tracker (Turkey ARC) has been designed to analyze price relationships of inputs and outputs of regional electric arc furnaces and rolling mills, and daily index and monetary values are proposed for each commodity and the market in general. November 2014 26 The analysis consists of a related set of commodity prices that Platts publishes daily: STCBM00 Rebar FOB Turkey, Softs and Metals FETKD00 Ferrous Scrap 80:20 CFR Turkey, and STBLB00 Billet FOB Black Sea (given an adjustment factor based on freight rates to allow for a net-forward CFR Turkey billet value to be created). See the original announcement.

Platts Introduces New Dry Freight Wire Monthly Report Effective November 3, 2014, Platts has begun publishing a new Dry Freight Wire Monthly report that will be automatically included with a subscription to Dry Freight Wire. It will be a monthly averages report and will be released on the first business day of each month. Each publication will contain a monthly average calculation for all of the dry freight assessments included in the daily Platts Dry Freight Wire publication. See the original announcement.

ZEMA collects over 30 Platts records and over 70 records about metals. To learn more about the metals records ZEMA collects, visit http://www.ze.com/the-zema-solutions/data-coverage/.

NYMEX to List New Iron Ore Futures Contract Effective December 7, 2014, for trade date December 8, 2014, and pending all relevant Commodity Futures Trading Commission (CFTC) regulatory review periods, the New York Mercantile Exchange, Inc. (NYMEX) will list the following new iron ore futures contract for trading on Chicago Mercantile Exchange (CME) Globex, the NYMEX trading floor, and for submission for clearing through CME ClearPort. Product Name Commodity Code NYMEX Rule Chapter Iron Ore 58% Fe, Low Alumina, CFR China (TSI) Futures TIC 1107 Also concurrent with the launch of this contract and pending all relevant CFTC regulatory review periods, the Exchange will permit block trading pursuant to Rule 526 (Block Trades) in this contract at a block trade minimum threshold of ten (10) contracts. The contract specifications are as follows: Contract Name Iron Ore 58% Fe, Low Alumina, CFR China (TSI) Futures Contract Size 500 dry metric tons Last business day of the contract month. Business days are based on the Termination of Trading Singapore Public Holiday calendar. Minimum Price Fluctuation $0.01 per dry metric ton Value per Tick $5.00 CME Globex, CME ClearPort and Open Outcry: Monthly contracts listed for the current year Listing Convention and the next two years First Listed Month January 2015 See the original announcement.

November 2014 27 Softs and Metals

ICE Benchmark Administration to Become New Administrator of the LBMA Gold Price On November 7, 2014, ICE announced that following an extensive selection process facilitated by the London Bullion Market Association (LBMA), ICE Benchmark Administration (IBA) has been designated the new administrator of the LBMA Gold Price. ICE Benchmark Administration expects will assume responsibility of the LBMA Gold Price in early 2015. The LBMA Gold Price will replace the Gold Fixing Price, which has been in existence since September 1919. The price is set in London twice a day and provides a published benchmark price that is widely used as an international pricing medium by producers, consumers, investors and central banks. As the new administrator for the LBMA Gold Price, IBA will transition to a physically settled, electronic and tradable auction, with the ability to participate in three currencies: USD, EUR and GBP. Aggregated gold bids and offers will be published in real-time with the imbalance calculated and the price updated every 30 seconds. IBA will use the WebICE technology platform which will allow direct participants as well as sponsored clients to manage their own orders in the auction in real time via their own screens. IBA will assume overall responsibilities for the London Gold Price as follows: • Governance of all LBMA Gold Price administrative processes including oversight, surveillance and decisions of methodology, systems and controls • An electronic, physically settled auction with live interest shown and orders taking in three currencies • Well established tools (WebICE) for participants to manage their risk in the process—for Front Office, Compliance, and Credit Risk • A fair and sustainable fee structure, designed to encourage direct participation from a diverse cross-section of market participants and broad use of the price as a benchmark See the original announcement.

ZEMA collects 75 metal records, many of which contain data about gold specifically. To learn more about ZEMA’s data coverage, visit http://www.ze.com/the-zema-solutions/data-coverage/.

Platts to Cease Publishing Weekly New York Dealer Osmium Price By the end of Platts’ first quarter of 2015, the organization will cease publishing its weekly New York Dealer Osmi- um Price (MMACX00) due to a lack of spot market liquidity and industry participation. The final publication of this price will be on March 26, 2015. See the original announcement.

Platts to Remove Weekly FOB China Tungsten Prices On December 31, 2014, Platts will discontinue publishing its weekly FOB China ferrotungsten price assessment (MMAHL00) and the weekly FOB China tungsten APT price assessment (MMAHF00). As Platts has reported, spot export activity for ferrotungsten has significantly fallen due to an export duty of 20%, and APT trade has been impacted, since APT is the main raw material for ferrotungsten production and is also subject to an export tax. Chinese domestic production has also declined due to government regulations, which have limited export licenses, export quotas, mining, and exploration. See the original announcement.

November 2014 28 Softs and Metals

Platts to Delist CIF Japan Indium Price Assessment Effective December 23, 2014, Platts will discontinue the weekly spot CIF Japan indium import price assessment (AAVSH00) due to reduced liquidity. See the original announcement.

Platts Removes Some Fixed Pages from Metals Alert Service On November 6, 2014, Platts removed fixed pages PMA1316, 1317, and 470 from its Platts Metals Alert service. The page numbers were allocated for the Asian rebar commentary and quarterly Asian steel trade data commentary. Both commentaries are published as news on pages PMA200-204 and in the Platts SBB Daily Briefing. See the original announcement.

HKEx Group and China Merchants Group to Collaborate on Product Development Hong Kong Exchanges and Clearing Limited (HKEx), HKEx Group companies the London Metal Exchange (LME) and LME Clear Limited, China Merchants Group Limited (CMG), and China Merchants Securities Co. Limited (CMS), signed an MOU on November 22, 2014 for a strategic alliance in product development and related services for market users. See the original announcement.

Platts to Increase Frequency of US Midwestern Wire Rod Assessment On January 9, 2015, Platts will increase the frequency of its monthly US Midwestern wire rod price assessment. Currently, the wire rod mesh quality N Amer dom prod ex-mill US MW mthly, symbol SB01249, is published on the first business day of each month. Platts will increase the frequency of this assessment to weekly on Fridays in order to capture changes in the market throughout the month. This price assessment is only published on the SBB website and price analyzer. All other specifications will remain the same. See the original announcement.

November 2014 29 Finance

CME to Release US/Chilean Peso Futures Contract Effective November 24, 2014, the Chicago Mercantile Exchange (CME) launched a new US Dollar/Chilean Peso (USD/CLP) futures contract for trading on CME Globex and for submission for clearing through CME ClearPort, starting with the January 2015 contract month. The new USD/CLP futures contract calls for cash settlement and is quoted using OTC pricing conventions of Chilean pesos per US dollar. It features a notional contract size of 100,000 US dollars and is offered monthly and quarterly, going out two years. The minimum tick size is 0.01 Chilean pesos per one US dollar (1,000 CLP) for outright and calendar spread transactions. See the original announcement.

ZEMA’s sophisticated market data management tools collect information from more than 4,000 data reports, including reports from CME. To learn how you can begin building your own warehouse of environmental data, book a complimentary ZEMA demonstration.

CBOE Launches 10-Year US Treasury Note Volatility Index Futures Effective November 13, 2014, the Chicago Board of Exchange (CBOE) Futures Exchange launched futures trading on the CBOE/CBOT 10-year US Treasury Note Volatility Index. Futures on the VXTYN Index offer customers a way to hedge pure interest rate volatility risk based on US government debt with a single product for the first time. The VXTYN Index, on which futures on VXTYN are based, is calculated by applying the CBOE Volatility Index (VIX Index) methodology to futures options data from CME Group’s 10-year US Treasury note contract--one of CME Group’s most actively traded interest rate options products. Potential users of VXTYN futures could include mortgage-backed securities investors and other large credit managers seeking to hedge against adverse interest rate movements; large bond funds that are naturally long interest rate volatility and are seeking a yield-enhancing mechanism; and hedge funds, volatility arbitrage firms and global macro participants seeking to express their views on forthcoming monetary policy events or to capture mispricing anomalies between cross-asset volatility (e.g. fixed income versus equity volatility). See the original announcement.

Thompson Reuters Creates StarMine Quality Earners APAC Ex-Japan Income Index Effective November 22, 2014, Thompson Reuters launched a new StarMine Quality Earners APAC ex-Japan Income Index, which offers lower volatility to help investors of exchange traded funds (ETFs) manage portfolio risk. StarMine’s proprietary earnings quality model identifies those companies with the most reliable and persistent earnings over time, giving the index an edge over other similar indexes. This first-to-market index generates smart-beta indexes using the breadth of the data it manages. Such next generation indexes are designed to add and remove stocks based on a rules-driven investment strategy, where Thompson Reuters can administer and calculate a variety of smart-beta indexes. The new index can be licensed to issuers of ETFs and other investment products. It offers the benefit of quantitative stock selection models within an independent index, to give investors exposure to current and forecasted steady, profitable income-generating stocks. The index uses a factor based on a company’s dividend yield and StarMine Earnings Quality Score to determine top earners. The final 50 candidates are given an equal weighting in the index, and currently have an average market cap of $7.7 billion. This results in approximately 30% higher returns and 30% lower volatility than a typical market capitalization weighted index for the same region, over the last ten years. See the original announcement.

ZEMA collects almost 100 reports from Thomson Reuters on a daily basis. To learn more, visit http://www.ze.com/the-zema-solutions/ data-coverage/.

November 2014 30 Finance

Bloomberg Launches List Trading Tool for Interest Rate Swaps Effective November 30, 2014, Bloomberg SEF LLC launched a List trading tool for interest rate swaps (IRSs). The new tool allows market participants to improve operational efficiency by creating and sending a collection of swaps that can be traded at a single price using Bloomberg SEF’s request for quote (RFQ) functionality. The List tool allows clients to offset cleared risk, which reduces the number of existing trades and overall capital costs. Asset manager NISA Investment Advisors, LLC (NISA), supported by futures commission merchant Morgan Stanley, executed the first package trade using Bloomberg’s List tool. Four leading financial institutions — BofA Merrill Lynch, Citigroup, J.P. Morgan and Wells Fargo –responded with a price. Since then, more than $1 billion in transactions have been completed on Bloomberg SEF using the List tool. See the original announcement.

ZEMA collects Bloomberg financial reports—reports which contain key data on North American equities, indexes, and currency. To learn more about ZEMA’s data coverage, visit http://www.ze.com/the-zema-solutions/data-coverage/.

ICE to Open ICE Futures Singapore and ICE Clear Singapore in March 2015 On March 17, 2015, operations will commence at Intercontinental Exchange (ICE) Futures Singapore and ICE Clear Singapore. Following the acquisition of the Singapore Mercantile Exchange and Singapore Mercantile Exchange Clearing Corporation in November 2013, ICE retained both licenses to operate as an approved exchange and an approved clearing house respectively. The listed and cleared products at ICE Futures Singapore and ICE Clear Singapore will be announced, subject to final regulatory approval from the Monetary Authority of Singapore (MAS). In addition, leveraging ICE’s proven repository technology and to further support regional market participants, ICE Trade Vault, LLC has submitted a foreign trade repository application to the financial regulator of Singapore. Through this base of operations in Asia, ICE will offer further global and regional products for hedging and trading. In addition, the Singapore launch will expand ICE’s network of exchanges and clearing houses that serve the trading, data and risk management requirements of global market participants. See the original announcement.

ICE Completes Transition of Liffe’s European Interest Rates to ICE Futures Europe On November 17, 2014, ICE completed the transition of the Liffe European interest rate derivatives complex to ICE Futures Europe. Following the migration, European interest rate futures and options are now listed on the widely distributed ICE trading platform, which also lists US interest rate futures, including Eurodollar and GCF Repo futures. These were previously listed on Liffe US and were migrated to the ICE trading and clearing platforms in June 2014. The transition of the Liffe interest rate products to ICE was completed between November 6 and November 3, 2014, with the following contracts successfully migrated in three tranches: November 3, 2014 - Interest Rate Contracts: • Three Month Euro (Euribor) Futures and Options • Three Month Eonia Swap Index Futures • Three Month Euro (Euribor) Mid-curve Options

November 20, 2014 - Interest Rate Contracts: • Three Month Sterling Futures and Options • Long Gilt Futures and Options • Three Month Sterling Mid-curve Options

November 2014 31 Ultra Long Gilt Futures November 6, 2014 – Interest Rate Contracts: Finance • Three Month Euroswiss Futures and Options • Medium and Long Swiss Confederation Bond Futures • One Month Eonia Futures • Euro Swapnote Futures and Options • Short and Medium Gilt Futures • Sterling Swapnote Futures • Short, Medium, Long and Ultra Long Bund Futures • US Dollar Swapnote Futures • Short, Medium and Long Italian Government Bond • Swiss Franc Swapnote Futures (BTP) Futures • Short, Medium and Long Spanish Government Bond (Bonos) Futures The Liffe equity derivative product suite includes futures and options contracts on the FTSE 100 Index and futures contracts on the MSCI World and MSCI Europe Indexes, as well as a comprehensive range of single stock futures, dividend adjusted stock futures, and individual equity options. The transition of Liffe contracts to the ICE platform provides: • Retention of a pro-rata, allocation-based matching model for interest rate futures markets. • Enhanced wash-trade prevention protections, including ICE’s self-trade prevention functionality. • Improved pre-trade risk management technology, interval price limit circuit breakers and sophisticated messaging policies to maintain highly efficient, orderly and reliable markets. The clearing transition of the Liffe market to ICE Clear Europe was completed in July 2013. All Liffe commodity, interest rate, and equity derivatives contracts will continue to be cleared at ICE Clear Europe. See the original announcement.

The ZEMA graph below shows the Bank of Canada’s daily conversion rates of EUR to USD from November 23, 2009 to November 21, 2014. Ranging from a high of 1.5 USD per EUR to a low of 1.19 USD per EUR, volatility was greatest between November 2009 and June 2010. Data was collected from a Foreign Exchange report.

November 2014 32 Finance ICE Clear Credit Starts Sovereign CDS Clearing for Hungary and South Africa On November 28, 2014, ICE announced that ICE Clear Credit has introduced clearing for Hungary and South Africa credit default swap (CDS) instruments for dealer to dealer and client clearing. ICE Clear Credit was the first to clear Hungary and South Africa sovereign CDS, which are constituents of the Markit CDX Emerging Markets Index Series, also cleared by ICE. ICE Clear Credit now clears seven sovereign CDS names: • Brazil • South Africa • Hungary • Turkey • Mexico • Venezuela • Russia

Additionally, ICE Clear Europe clears four sovereign CDS names: • Ireland • Portugal • Italy • Spain

See the original announcement.

Deutsche Börse Begins Sovereign Bond Indexes for Africa’s Developed Economies On November 24, 2014, Deutsche Börse began disseminating fixed income indexes and bond pricing data from African countries. The Concerto African Bond Indexes are the first independent index family to measure pan-African local currency sovereign bond performance. The indexes are calculated and maintained by Germany-based Concerto Financial Solutions. The Concerto African Bond Indexes were launched in November 2013 and measure the performance of government bonds from the following 12 countries: Botswana, Egypt, Ghana, Kenya, Mauritius, Morocco, Namibia, Nigeria, South Africa, Tunisia, Uganda, and Zambia. The index family comprises pan-African indexes, regional indexes, and country indexes, as well as relevant maturity sub-indexes. All indexes are market capitalization-weighted. The indexes are calculated daily in their respective local currency as well as in USD, EUR, and ZAR. Daily index history is available back to January 1, 2010. The index data being provided includes the index levels in the various currencies and their respective returns, as well as underlying bond data, including price data (bid/ask), yields, and bond reference data, such as issuer, coupon, country, and currency. The bond prices are derived from publicly available sources, from data provided by Concerto’s contributors, and modelled prices. Pricing data is published daily. The Concerto African Bond Indexes and respective bond data are disseminated via Deutsche Börse’s direct data feed CEF Core. Historical data can be downloaded from the Deutsche Börse Historical Data WebShop. See the original announcement.

ZEMA combines strengths in equities market data collection, visualization, and analysis, equipping traders and analysts to make informed business decisions. To learn more, book a complimentary ZEMA demonstration.

Deutsche Börse Adds Exchange Traded Commodities and Exchange Traded Notes from Boost ETP to Xetra On November 17, 2014, Deutsche Börse added eight exchange traded commodities (ETCs) and four exchange traded notes (ETNs) from issuer Boost ETP Plc to Xetra. The ETCs relate to indexes in the Nasdaq Commodity Index Family and enable investors to participate in the rising or falling performance of one month futures contracts on individual commodities with a leverage factor of three. The individual commodities are gold, silver, oil, and natural gas.

November 2014 33 The Boost Nasdaq 100 3x Leverage Daily ETP reflects three times the daily percentage price change of the 100 largest Finance Nasdaq companies. Alternatively, investors can participate in the negative performance of those companies using the Boost Nasdaq 100 3 x Short Daily ETP. The Boost US Large Cap 3x Leverage Daily ETP tracks the performance of the Russell 1000 Net 30% TR USD Index with triple leverage. The Russell 1000 Index includes the 1,000 largest US stock corporations as measured by market capitalization. The negative performance of those securities can be tracked using the Boost US Large Cap 3x Short Daily ETP. New products are listed in the following table: Boost ETPs ISIN Management Fee Boost Gold 3x Leverage Daily ETP DE000A1ZLCQ2 0.99% Boost Gold 3x Short Daily ETP DE000A1ZLCP4 0.99% Boost Silver 3x Leverage Daily ETP DE000A1ZK3W9 0.99% Boost Silver 3x Short Daily ETP DE000A1ZK3V1 0.99% Boost WTI Oil 3x Leverage Daily ETP DE000A133ZT6 0.99% Boost WTI Oil 3x Short Daily ETP DE000A133ZV2 0.99% Boost Natural Gas 3x Leverage Daily ETP DE000A133ZU4 0.99% Boost Natural Gas 3x Short Daily ETP DE000A133ZW0 0.99% Boost NASDAQ 100 3x Leverage Daily ETP DE000A133ZY6 0.75% Boost NASDAQ 100 3x Short Daily ETP DE000A133ZR0 0.80% Boost US Large Cap 3x Leverage Daily ETP DE000A133ZS8 0.75% Boost US Large Cap 3x Short Daily ETP DE000A133ZX8 0.80% See the original announcement.

Deutsche Börse Lists SPDR Bond Index ETF on Xetra On November 14, 2014, Deutsche Börse listed a new bond index fund from the ETF offering issued by State Street Global Advisors (SPDR) in the XTF segment of Xetra. ETF Name SPDR BofA Merrill Lynch 0-5 Year EM USD Government Bond UCITS ETF Asset Class Government bonds ISIN IE00BP46NG52 Total Expense Ratio 0.42% Distribution Policy Distributing Benchmark BofA Merrill Lynch 0-5 Year EM USD Government Bond ex-144a Index The SPDR BofA Merrill Lynch 0-5 Year EM USD Government Bond UCITS ETF enables investors to participate in the performance of USD-denominated government bonds with short maturities from emerging market countries. Bonds must have a minimum nominal value of US$500 million, a residual maturity of no more than five years, and fixed income in order to be accepted into the index. Bonds with a rating of Caa3/CCC- or lower are excluded. The country risk is limited to a maximum of 10% per country. See the original announcement.

Manage equities data with ease using ZEMA’s data collection, validation, analytic, and visualization functionalities. To learn more, book a complimentary ZEMA demonstration.

Bank of China Authorized as Trading and Clearing Participant at Deutsche Börse On November 14, 2014, The Bank of China received authorization via its Frankfurt branch office as a trading and clearing participant on the Deutsche Börse Group cash market. This will provide Chinese issuers and Asian investors with direct access to the German and European capital markets. The Bank of China Frankfurt Branch is the first Chinese clearing participant at Deutsche Börse based in the euro area. In addition to the admission as trading and clearing participant, Deutsche Börse and Bank of China continue their strategic cooperation in the asset servicing, securities safekeeping, and Renminbi businesses. See the original announcement. November 2014 34 Finance Nasdaq Lists FlexShares Credit-Scored US Corporate Bond Index Fund On November 13, 2014, Nasdaq announced that FlexShares ETFs, sponsored and managed by Northern Trust, listed a new ETF, FlexShares Credit-Scored US Corporate Bond Index Fund (symbol: SKOR), on The Nasdaq Stock Market. SKOR began trading on November 13, 2014. SKOR is a fixed income portfolio consisting of corporate debt securities selected using a proprietary credit scoring process. The fund focuses on an intermediate maturity, with securities ranging from two to 10 years in maturity. SKOR is an accessible and efficient investment product which provides exposure to US corporate debt. The fund seeks to maximize the credit score while maintaining a similar spread and duration to the intermediate maturity corporate debt universe. See the original announcement.

ZEMA collects over 50 NASDAQ OMX records, including financial market records. For further information, visit http://www.ze.com/the-zema-solutions/.

Iraq Stock Exchange Introduces Nasdaq’s X-stream Trading Technology On November 11, 2014, Nasdaq and the Iraq Stock Exchange (ISX) successfully launched the X-stream Trading technology, which replaced the existing Horizon platform. The X-stream Trading upgrade provides ISX with a widely deployed high-end, multi-asset trading platform that complies with international standards. The new technology provides ISX with improved performance and up to ten-fold the amount of the capacity. See the original announcement.

Nasdaq Buyback Index Launches as ETF in Europe On November 10, 2014 Nasdaq launched the Global Buyback Achievers Index to serve as the basis for Invesco PowerShares’ most recent ETF launch – the PowerShares Global Buyback Achievers UCITS ETF (symbol: BUYB). This is part of Nasdaq’s cooperation with Invesco PowerShares to expand the smart beta-buyback lineup. This is the first product based on the successful Nasdaq Buyback Achiever Index family to launch in the UK and Europe. See the original announcement.

ZEMA, ZE’s enterprise data management solution, contains advanced display functionalities which enable users to easily align news updates alongside data, which gives users an enhanced market perspective. For further information, visit http://www.ze.com/the-zema-suite/dashboard/.

Nasdaq Point of Presence Announced On November 5, 2014, Nasdaq announced that Global Access Services will launch a Nasdaq Point of Presence in Chicago, IL in the first quarter of 2015. The Nasdaq POP in Chicago, along with the Nasdaq POP already live in Secaucus, NJ, will be available for market participants seeking access to Nasdaq eSpeed, the exchange group’s over-the-counter platform for electronic trading in US Treasury securities, and Nasdaq’s US cash equities and equity derivatives markets pending Securities and Exchange Commission approval. In addition, Nasdaq will establish a disaster recovery facility in Chicago for Nasdaq eSpeed in the fourth quarter of 2014.

See the original announcement.

Nasdaq Lists First Trust Emerging Markets Local Currency Bond ETF and First Trust Low Duration Mortgage Opportunities ETF Effective November 5, 2014, Nasdaq listed two new ETFs: the First Trust Emerging Markets Local Currency Bond ETF (symbol: FEMB) and the First Trust Low Duration Mortgage Opportunities ETF (symbol: LMBS), on The Nasdaq Stock Market.

November 2014 35 FEMB is an actively managed ETF that seeks maximum total return and current income, while minimizing volatility by Finance actively managing currency exposure. The fund invests in bonds that are denominated in the issuer’s local currency as opposed to US dollars. Emerging market economies make up more than half of the world’s gross domestic product based on purchasing power parity and many are expanding and issuing debt with attractive yields to help finance their growth infrastructures and businesses. Because emerging markets are generally not as stable as developed markets, their bonds typically offer higher yields compared to developed market bonds to compensate for higher risk. LMBS seeks to generate current income with a secondary objective of capital appreciation. Under normal market conditions, the fund will seek to achieve its investment objectives by investing at least 80% of its net assets (including investment borrowings) in investment-grade, mortgage-related debt securities and other mortgage-related instruments tied to residential and commercial mortgages. The fund offers an attractive level of current income with an effective duration target of three years or less, limited interest rate sensitivity due to a focus on managing and limiting the average portfolio duration, opportunity to exploit inefficiencies in mortgage-related securities and the potential for capital appreciation over time. See the original announcement.

ZEMA collects over 300 financial market records. To learn more about ZEMA’s vast data coverage, visit http://www.ze.com/the-zema-solutions/data-coverage/.

Nasdaq Adds First Trust International IPO ETF Effective November 5, 2014, Nasdaq listed a new ETF, the First Trust International IPO ETF (symbol: FPXI) on The Nasdaq Stock Market. FPXI seeks investment results that correspond to the price and yield (before the fund’s fees and expenses) of an equity index called the IPOX International Index. The IPOX International Index measures the performance of the 50 largest and typically most liquid companies that are domiciled outside the US within the IPOX Global Composite Index (the base index). The base index is constructed and managed to provide a broad and objective view of global aftermarket performance of recent IPOs and spin-offs in both emerging and developed countries. After applying initial screens for diversification, capping and liquidity, all eligible constituents generally enter the base index on the close of the sixth trading day. The 50 largest stocks from this universe are selected for the IPOX International Index and added upon quarterly rebalance. The unique characteristics of IPOs and spin-offs tend to fade over the course of about four years, so constituent stocks are removed from the index after no more than 1,000 trading days (approximately four years). See the original announcement.

ISE Launches ISE Cyber Security Index Effective November 11, 2014, the International Securities Exchange (ISE) ETF Ventures released the ISE Cyber Security Index, which allows investors to take advantage of both event-driven news and long term economic trends in the cyber security and information technology space. The index is the first and only one focused specifically on publically-listed companies that develop or provide cyber security technology and related services. The index includes 30 constituent companies, including VASCO Data Security International Inc., Palo Alto Networks Inc., Symantc Corp., Juniper Networks Inc., FireEye Inc., and Splunk Inc. The index is licensed by PureFunds and will be the basis for an ETF. See the original announcement.

ZEMA presently collects several ISE reports and indexes. To learn more, book a complimentary ZEMA demonstration at http://www.ze.com/book-a-demo/.

November 2014 36 Finance Eurex Exchange Launches Variance Futures Contract with DRW Eurex Exchange announced on November 29, 2014 that it has recently collaborated with DRW Investments in launching variance futures contracts. DRW quotes the contract up to 50,000 notional vega at a spread of 1.5 volatility points. Several clearing members have completed their internal setup and are able to offer their clearing services for this new product - among them Societe General Newedge UK Limited, Jeffries Bache Limited, and Credit Suisse. Further, Eurex also offers the “Advanced Services” toolkit for its variance futures as of the week of November 29, 2014. See the original announcement.

ZEMA presently collects many Eurex reports, including Eurex futures data reports such as the Eurex-Futures report. To learn more, book a complimentary ZEMA demonstration at http://www.ze.com/book-a-demo/.

Barchart Begins On-Demand Equity Options Market Data Effective November 23, 2014, Barchart.com began offering US and Canadian equity options price data through Barchart OnDemand. Barchart OnDemand is a cloud-based service developed for accessing and delivering market data and information using web services APIs. With the availability of equity options, clients can request current, end-of-day, and historical options pricing using a simple Barchart OnDemand API. The getEquityOptions API offers access to price data, Geek calculations like delta, gamma, theta, and vega, and implied volatility data. See the original announcement.

Like Barchart OnDemand, ZEMA collects a wide range of equity market data from a range of exchanges. ZEMA also collects over 60 reports from Barchart.com, many of which are related to equity options. To learn more, book a complimentary ZEMA demonstration at http://www.ze.com/book-a-demo/.

ASX and Bank of China Sign Agreement to Expand Cooperation On November 17, 2014, ASX and the Bank of China signed a heads of agreement to expand their strategic cooperation to develop the Renminbi (RMB) as a currency in Australia’s financial markets. The heads of agreement complements the recent appointment of the Bank of China as the official RMB clearing bank in Australia by the People’s Bank of China, China’s central bank. Official RMB clearing banks have direct access to China’s onshore RMB and foreign exchange markets, and enhance liquidity in the local market. See the original announcement.

China Financial Futures Exchange Signs MOU with Korea Exchange On November 28, 2014, China Financial Futures Exchange (CFFEX) and Korea Exchange (KRX) signed an MOU, pledging to strengthen their bilateral partnership and facilitate the development of both parties through information sharing, mutual visits from executives, staff exchanges, and closer business cooperation in various areas. See the original announcement.

November 2014 37 Other

US Department of Energy Launches Mobile Application for Energy Emergencies On November 17, 2014, the US Department of Energy launched a free mobile application called Lantern Live that helps individuals quickly find and share information about nearby gas stations and power outages during energy emergencies. Lantern Live is available for Android devices through Google Play. Lantern Live allows users to report the operational status of local gas stations, find fuel, and look up power outage maps from local utilities, while also accessing tips and guidelines. Lantern Live builds on the White House Office of Science and Technology Policy’s Disaster Response and Recovery Initiative, which is designed to accelerate the development of open data for power outages. Future releases of Lantern Live will likely include the ability to crowdsource information on the status of gas stations via standardized hashtags for social media. Lantern Live’s code will also be open source, allowing individuals to reuse the code in their own applications. See the original announcement.

Keep abreast of the complex relationship between weather changes and commodity markets by leveraging ZEMA’s real-time data collection capabilities. To learn more, book a complimentary ZEMA demonstration.

Bank of China and DME Announce Partnership Agreement On November 28, 2014, the Bank of China and Dubai Mercantile Exchange (DME) signed a memorandum of understanding (MOU) to strengthen their cooperation in offering finance solutions to their mutual customers. Bank of China and DME will examine the possibility of creating new financial products and financing solutions to support clients in Middle Eastern and Asian markets. The two institutions will also promote the development of close links between the financial and trading communities in Dubai and China. See the original announcement.

November 2014 38 News from Data Vendors

New ZEMA Data Reports – November 2014 For 20 years, ZE PowerGroup Inc. (ZE) has consistently kept up to date on the latest in energy and commodity data changes. ZE collects data from vendors spanning the weather, oil, natural gas, electricity, agriculture, and finance industries, including Platts, Argus, the Chicago Mercantile Exchange, the New York Mercantile Exchange, the Intercontinental Exchange, and OPEC. ZE then provides its clients with access to both public (free subscription) and private data reports, including reports that are collected based on clients’ specific needs. Since the last issue of ZE DataWatch, ZE has added data reports published by EIA, Credit Suisse reports, LCH.Clearnet Reports, and USDA among others. The 27 EIA reports cover a wide range of petroleum market data reports from import and export data to refineries operations. This set of new parsers has been developed in response to a growing need for petroleum supply information. LCH.Clearnet reports were added in response to investors’ and traders’ need for more forward freight assessment data. The USDA reports consist of updated grain transportation tariff rates. For further information on these reports, visit: • http://www.eia.gov/petroleum/supply/monthly/ • https://www.credit-suisse.com/global/en.html • www.lchclearnet.com/ • http://www.ams.usda.gov/AMSv1.0/ams.fetchTemplateData.do?template=TemplateA&navID=AgriculturalTranspor- tation&leftNav=AgriculturalTransportation&page=ATGTRDatasets&description=GTR%20Datasets To see the full list of ZEMA data providers, visit http://www.ze.com/the-zema-solutions/data-coverage/.

ZE Publishes White Paper about Acquiring ZEMA vs. Building an Enterprise Data Management System ZE has released a white paper, entitled “Weighing the Options: Build an Internal EDM System or Get ZEMA,” which examines the return on investment and risk-reward relation between building an enterprise data management (EDM) system in house, from scratch WHITE PAPER or acquiring an off-the-shelf, third-party product from a Weighing the Options: specialized vendor like ZE. ZE is the developer of ZEMA, a Build an Internal EDM System or Get ZEMA best-in-class, full-featured EDM solution for energy and November 2014 commodities markets. ZE’s white paper analyzes the hidden inefficiencies and risks associated with large-scale project implementations of mission-critical EDM solutions, which form the integration layer between multiple systems. The assessment criteria include opportunity costs as well as direct development, implementation, operational, and ongoing upgrade costs. The paper provides a comparative estimate of the total cost of ownership of an in-house developed solution and the cost of getting an EDM system off the shelf. To request the white paper, visit http://www.ze.com/media-library/case-studies/3/.

November 2014 39

November 2014

Build an Internal EDM System or Get ZEMA

Weighing the Options: WHITE PAPER News from Data Vendors

MDA Offers New Real-Time Weather Products November 21, 2014: MDA Weather Services offers a variety of data and reports used throughout the energy, agriculture, and weather markets. In addition to providing the basic data products (historical and forecast temperatures, precipitation, etc.) used by traders in these industries worldwide, MDA goes beyond the numbers to provide unique datasets tailored for traders in each industry. New product offerings include: Real-Time Weather Model Data While many users can receive weather information after the weather model runs, there is great utility in getting the raw numerical data immediately as it is issued. In recent months, there has been a spike in interest in receiving weather model forecast data as soon as possible to assist algorithmic trading and simply getting a sense of how much warmer or colder, wetter or drier the incoming model data is before the rest of the mark. Time is money. Getting the information as soon as possible can give the user a critical advantage – especially with the abnormally cold trends seen during the early part of the heating season in North America. This capability is available for all model runs – including the 12z GFS that falls during the middle of the US trading day and can have large impacts on the market. It is also available for the European Center for Medium-Range Weather Forecasts (ECMWF) weather model, widely regarded as the best global model in the world. Temperature is not the only value that can be produced with this real-time capability – precipitation, wind, and more are also available.

Portugal Launches Fuel Reference Prices Based on Argus London, November 18, 2014: Portuguese fuel markets authority ENMC (Entidade Nacional para o Mercado dos Combustíveis) has launched a series of national reference prices for gasoline, diesel and LPG based on Argus assessments. In order to encourage transparency in the pricing of these fuels, ENMC is publishing daily, weekly and monthly prices derived from Argus’ fuels and freight assessments, with adjustments for local costs and conditions. The prices were launched on 14 November and can be seen on the body’s website www.enmc.pt. They are intended as a reference for Portuguese consumers and government, and to encourage the formation of final retail prices that are responsive to changes in international markets. They reflect the post-tax price of fuels sold from storage in Lisbon and do not include distribution costs or retail margins. “We are very pleased with the service from Argus, which will help us build a system to bring more transparency to the Portuguese market for gasoline, diesel and LPG,” ENMC president Paulo Carmona said. “We are delighted that ENMC has chosen to base its reference prices on Argus, in recognition of our clear methodology and benchmark status in European wholesale markets,” Argus Media chairman and chief executive Adrian Binks said. Media contacts: Houston Gabriela Alcocer, +1 713 429 6308 [email protected]

November 2014 40 News from Data Vendors

15-Minute Intraday Call Auction to Launch December 9, 2014 Paris, Leipzig, November 13, 2014: The 15-minute call auction on the German Intraday market is scheduled to launch on December 9, 2014 (trading day). Member tests have been conducted successfully. 60 Exchange Members have shown interest in the new segment so far. The new 15-minute call auction on the German Intraday market is designed to cope better with the emerging flexibility challenges of power markets. It will take place daily at 3 p.m., before the opening of the continuous Intraday market for 15-minute contracts at 4 p.m., and it will cover the 96 15-minute contracts for the next calendar day from midnight on. The auction will run on the well-known ETS used for EPEX SPOT’s Day-Ahead markets. The calculation of prices and volumes will be performed using Euphemia, a tool co-developed by EPEX SPOT in the framework of the Price Coupling of Regions initiative. More specifications on the 15-minute auction can be found in the factsheet on the 15-minute Intraday call auction. 15-minute contracts help fine-tuning portfolios after the Day-Ahead auction for hourly contracts at noon and facilitate trading for intra-hour variations in production and consumption. The 15-minute auction will be incorporated in the Intraday market segment, as it is held after the day-ahead nomination deadline at 2:30 p.m. in Germany. It will prove to be a valuable tool for market participants as it will help them fulfilling their balance requirements towards German transmission system operators already on the calendar day before delivery. The already existing 15-minute prices that emerge on the continuous Intraday market remunerate more accurately flexible capacity able to respond to 15-minute variations in production and consumption. The auction further fosters this idea by concentrating liquidity and creating the most robust possible price reference. “The value of flexibility is one of the key issues power markets need to tackle. This new auction is the right tool to determine a clear cut price signal on 15-minute basis in Germany – and to reveal the value of flexibility,” says Jean-François Conil-Lacoste, Chairman of the Management Board of EPEX SPOT. About EPEX SPOT SE: The European Power Exchange EPEX SPOT SE operates the power spot markets for Germany, France, Austria and Switzerland (Day-Ahead and Intraday). Together these countries account for more than one third of the European power consumption. EPEX SPOT also acts as market operating service provider for the Hungarian Power Exchange HUPX and operates the coupling between the Czech, the Slovak, the Hungarian and soon the Romanian markets on behalf of the local Exchanges. It is a European company (Societas Europaea) based in Paris with branches in Leipzig, Bern and Vienna. Over 220 companies from Europe are active on EPEX SPOT. 312 TWh were traded on EPEX SPOT’s power markets in the first ten months of 2014.

November 2014 41 Crude Oil Brent vs. WTI: Prompt-Month Contract (NYMEX) Monthly Market Analysis

On the New York Mercantile Exchange (NYMEX), prompt-month contracts for Brent and Western Texas Intermediate (WTI) crude oil continued to dive for the fifth month in a row to the lowest levels of the past 12 months. By end of day November 26, 2014, the prices of Brent and WTI had both dropped by 8% from the previous month. Throughout November 2014, prompt-month contracts for Brent dipped just below $85 USD/Bbl to settle at $81 USD/Bbl. Meanwhile, the prompt-month contract prices for WTI plunged by $7 USD/Bbl to $77 USD/Bbl. In November 2014, data from NYMEX future settlements showed that Brent and WTI oil prices traded near four-year lows—Brent and WTI traded at $23 USD/Bbl and $19 USD/Bbl below the last 12-month average. Furthermore, the last 12-month averages for Brent and WTI on NYMEX dropped to $104 USD/Bbl and $96 USD/Bbl, respectively. The Brent-WTI spread (represented by the purple area in the graph above) stayed at $4 USD/Bbl this month, which was $4 USD/Bbl below the last 12-month average of $8 USD/Bbl. Global crude benchmarks roughly followed the same story of the past few months: ample supply and tepid demand. In November 2014, worries over weakening global demand combined with signals that OPEC producers will not cut output weighed on prices in the final days of the month. Interestingly, Saudi Oil Minister Ali Al-Naimi said oil prices will stabilize on their own, signaling that no action will be taken to curb the output.1 It is safe to say that crude has entered a bear market amid the record high US output and signs of slow demand. According to EIA, US crude stockpiles rose 1.95 million barrels to 383 million in the third week of November, surpassing the market expectation of a 250,000 barrel supply increase.1 Also, US crude output rose 73,000 barrels a day to 9.08 million in the third week of November, the highest in weekly records since 1983.1 The oil market is clearly oversupplied.

1 “Crude Oil Futures Decline Before Tomorrow’s OPEC Meeting,” Bloomberg, November 26, 2014, accessed November 26, 2014, http://www.bloomberg.com/news/2014-11-26/crude-falls-near-4-year-lows-amid-mixed-signals-from-opec.html

November 2014 42 Crude Oil Brent vs. WTI: Forward Curve (NYMEX) Monthly Market Analysis

On NYMEX, forward curves for Brent and WTI prices fell in the first three weeks of November 2014 for the next 24 months when compared to the same period in October 2014. The average NYMEX Brent forward prices for delivery until November 2016 (represented by the blue line in the graph above) dropped by $6 USD/Bbl to $88 USD/Bbl, while WTI (the red line) fell by $5 USD/Bbl to an average of $77 USD/Bbl for the same delivery period. The Brent-WTI spread also dropped by 11% to $8 USD/Bbl (the purple area) on average for the next 24 months. There is a shift happening in the crude market as prices continue to dive. Demand for imports in the United States has significantly reduced as the country is moving toward energy independence thanks to the shale boom. Meanwhile, demand would not receive any boost from this. It looks like this phenomenon has adversely affected Brent prices since there is less desire to import crude to the United States. As of November 27, 2014, OPEC did not take any action to ease a huge global oversupply. As a result, Brent slid as much as 7% for delivery in the next 24 months on expectations that a oil supply glut will build up in the coming months and will continue diving to find equilibrium between supply and demand. Henry Hub Natural Gas Forward Curve (ICE)

On the ICE, natural gas futures available for trade in the next 12 months at Henry Hub bounced back due to increased demand in November 2014 (until the end of the third week of the month) when compared to the previous month. The average price of Henry Hub natural gas contracts in the first three weeks of November 2014 for delivery in the next 12 months (represented above by the orange line) went up by 3% to average at $3.96 USD/MMbtu when compared to the same contracts period in October 2014 (represented by the blue line). Data from ICE suggests the spread between November 2014-October 2015 contracts (represented by the red bar) averaged at $0.10 USD/MMbtu for the next 12 months. The price jump in the next four months comes from increased demand, causing the spread to average at $0.30 USD/MMbtu. When considering the Henry Hub natural gas movements in the past few months, it is evident that the market momentum was a transition from bearish sentiment to bullish sentiment. Consequently, this translated into an increase in price, at least for the next four months.

November 2014 43 North American Natural Gas Spot Prices (ICE) Monthly Market Analysis

On the Intercontinental Exchange (ICE), natural gas prices went up in all the observed North American hubs by the end of October 19, 2014, which is a common seasonal trend. When compared to the first 19 days of October 2014, the prices increased by 98% in New York’s Transco Zone-6 to $4.08 USD/MMBtu, by 12% in Chicago to $4.26 USD/MMBtu, by 6% in Henry Hub to $4.00 USD/MMBtu, and by 5% in California’s PG&E Citygate to $4.48 USD/MMBtu. Comparing November 2014 prices to last year’s prices, monthly average gas prices increased in New York’s Z6, Chicago Citygates, Henry Hub, and PG&E by 7%, 14%, 10%, and 16%, respectively. In the first three weeks of November 2014, Trans Z6 was the most volatile hub with prices ranging from $2.65 USD/MMBtu on November 2 to $9.35 USD/MMBtu on November 18. The largest spike happened in New York City on November 18th and 19th where the temperature dropped to -4C and -5C, respectively. For the week ending November 19, 2014, EIA’s “Natural Gas Weekly Update” reported that cold November temperatures boosted natural gas prices.2 In the third week of November 2014, dry gas production fell by 1.5% compared to the previous week, while total demand during the week increased by more than 35% for the same period. Additionally, the third week of November marked the first net withdrawal of the 2014-15 heating season. According to EIA, the East and West regions (two of the three regions) had net withdrawals of 11 Bcf (2 Bcf larger than its five-year average) and 7 Bcf (6 Bcf larger than its five-year average). Also, temperatures in the Lower 48 states averaged 8 Celsius, slightly below the 30-year average.

2 “Natural Gas Weekly Update—Week Ending November 19, 2014,” U.S. Energy Information Administration, November 25, 2014, accessed November 25, 2014, http://www.eia.gov/naturalgas/weekly.

November 2014 44 Actual Weather (AccuWeather) Monthly Market Analysis

From October 2014 to November 21, 2014, the monthly temperature continued to fall in all observed North American cities due to seasonality. Data from AccuWeather shows San Antonio, Chicago, New York, and San Diego felt colder by 13, 12, 8, and 3 degrees Celsius (C), respectively, when compared to the previous month. In November 2014, the average monthly temperatures in the observed North American cities were as follows: San Antonio (12C), Chicago (-4C), New York (6C), and San Diego (19C). In November 2014, the two-year average in Chicago and San Antonio was lower, while New York and San Diego felt warmer. When comparing the past two-year average of November temperatures, this year’s November felt colder in Chicago and San Antonio by 5 and 1 degree(s), respectively. On the other hand, San Diego and New York were 2 and 1 degree(s) below the two-year average. Once more, Chicago experienced the largest weather fluctuations among all the observed cities, as the temperature reached 10C on November 10 and dropped drastically to -20C on November 18.

November 2014 45 Electricity: Day-Ahead Prices (ICE) Monthly Market Analysis

On the ICE, electricity day-ahead prices were all over the place in observed North American ISOs by the third week of November when compared to the previous month. From October2014 to November 2014, electricity day-ahead prices decreased in CAISO SP-15 and ERCOT (Texas) by 1% to $49.33 and 5% to $ 35.94 USD/MWh, respectively. On the other hand, PJM and NYISO day-ahead prices went up by 16% to $48.68 USD/MWh and by 1% to $42.17 USD/MWh, respectively. Cold temperatures in the Northeast could be responsible for boosting the demand and, consequently, pushing the prices higher compared to the rest of the country. Comparing day-ahead pricing of November 2013 with November 2014, CAISO SP-15, PJM, and ERCOT, increased 13%, 20%, and 17%, respectively. Meanwhile, NYISO day-ahead prices dropped by 16% in comparison to the previous year.

November 2014 46 InDepth North American LNG Projects: Political and Economic Factors By Adrian K. Yee

In the past year alone, North America and Asia have developed an especially close relationship with regards to LNG. Various economic and political factors have spanned the Pacific to tie these continents together in a dynamic energy exchange.

The Rise of the North American LNG Industry LNG is a quickly growing energy commodity. Historically, much of this growth has been attributed to a combination of Middle Eastern and South American LNG exports to European and Asian markets. Recently, North America has witnessed rapid growth in facility construction with projects in Oregon, Texas, Washington, and British Columbia. While the number of LNG projects is surging in order to meet demand, not all of these projects will succeed nor lead to outcomes investors initially predicted. In the past year alone, North America and Asia have developed an especially close relationship with regards to LNG. Various economic and political factors have spanned the Pacific to tie these continents together in a dynamic energy exchange. US and Canadian LNG Projects In 2003, the United States alone had 25 LNG export terminals, 91 import terminals, and 360 LNG ships—altogether handling approximately 220 million metric tons of LNG every year. According to the Federal Energy Regulatory

November 2014 47 Commission (FERC), the United States currently has over 110 LNG facilities operating within its borders with dozens of InDepth projects on the horizon. The EIA expects the United States will be a net exporter of LNG by 2015.1 As of November 15, 2014, the following US projects have been approved for construction: Import Terminals • Gulf of Mexico: • 1.0 Bcf/d (Main Pass McMoRan Exp.) • 1.4 Bcf/d (TORP Technology-Bienville LNG) • Offshore, Florida • 1.2 Bcf/d (Hoegh LNG—Port Dolphin Energy) Export Terminals (Under Construction) The EIA expects the • Sabine, LA: United States will be a net • 2.76 Bcf/d (Cheniere/Sabine Pass LNG)2 exporter of LNG by 2015.1 • FERC Report #: CP11-72 & CP14-12 • Export Terminals (Not yet under Construction) • Hackberry, LA: • 1.7 Bcf/d (Sempra—Cameron LNG) • FERC Report #: CP13-25 • Freeport, TX: • 1.8 Bcf/d (Freeport LNG Dev/Freeport LNG Expansion/FLNG Liquefaction) • FERC Report #: (CP12-509) • Corpus Christi, TX: 1.0 Bcfd (Occidental Energy Ventures—Ingleside Energy) • Corpus Christi, TX: 2.6 Bcfd, (Cheniere—Corpus Christi LNG) • Fall River, MA: 0.8 Bcfd, (Hess LNG/Weaver’s Cove Energy) • Port Arthur, TX: 3.0 Bcfd (Sempra) • Logan Township, NJ: 1.2 Bcfd (Hess LNG - Crown Landing LNG) • Cameron, LA: 3.3 Bcfd (Cheniere—Creole Trail LNG) • Port Lavaca, TX: 1.0Bcfd (Gulf Coast LNG Partners—Calhoun LNG) • Bradwood, OR: 1.0 Bcfd (Northern Star Natural Gas LLC—Northern Star LNG) • Baltimore, MD: 1.5 Bcfd (AES Corporation—AES Sparrows Point) • Coos Bay, OR: 1.0 Bcfd (Jordan Cove Energy Project) As of November 2014, there are six export facilities proposed in Canada: three in Kitimat, BC, two in Prince Rupert, BC, and one in Guysborough County, NS. Furthermore, as of September 2014, an additional 10 LNG export facilities have entered the regulatory review process: eight to be constructed in British Columbia and two in Rivière-du-Loup, QC, and Quebec City, QC, respectively.3

1 “Natural Gas,” Energy Information Administration, November 12, 2014, accessed November 20, 2014, http://www.eia.gov/forecasts/steo/ report/natgas.cfm. 2 “North American LNG Import /Export Terminals – Approved,” Federal Energy Regulatory Committee, August 15, 2014, accessed September 16, 2014, http://www.ferc.gov/industries/gas/indus-act/lng/lng-approved.pdf. 3 Lamers, Matthew, “B.C.’s 15 LNG Projects: Where They Stand Today,” Pipeline News North, April 17, 2014, accessed September 30, 2014, http://www.pipelinenewsnorth.ca/news/industry-news/b-c-s-15-lng-projects-where-they-stand-today-1.1122622.

November 2014 48 The following is a snapshot of major Canadian LNG facilities scheduled for construction: InDepth Start /Finish Source of Natural Name Partners Price Location Capacity Date Gas Petronas, Land-based Progress Energy’s Pacific North Japex, Petro- facility on 2014-2017 $11 Billion 19.6 mt/y holdings in North West LNG leum Brunei, Lelu Island, Montey Indian Oil Corp Prince Rupert

Woodfibre Pacific Oil & $1.7 – 2.0 Existing Fortis, BC LNG Export 2014-2017 Squamish, BC 2.1 mt/y Gas billion gas pipeline Pte. Ltd.

Canada Stewart Floating and Stewart 2015-2019 Energy Group Unknown land-based 5 mt/y Unknown Energy LNG Ltd. facilities, Stewart Joint venture TransCanada’s LNG Canada Shell Canada Land-based facility: 2015-2017 Unknown Unknown Coastal GasLink Gas ltd., Korea Gas Kitimat, BC Pipeline Ltd. corporation Floating facility, AltaGas Ltd., PNG’s Looping Triton LNG 2016-2021 Unknown Kitimat or Prince 2.3 mt/y Idemitsu Kosan Project Rupert (both BC) Nexen Land-based facility, Nexen assets in (CNOOC), IN- Aurora LNG 2014-2017 Unknown Grass Point, near 24 mt/y Horn River and PEX, JGC Corpo- Kitimat, BC Cordova basins ration Chevron/Apache Chevron and Land-based facility, holdings in Horn Kitimat LNG Late 2010’s Apache have Unknown Unknown Bish Cove, Kitimat River, Liard gas 50/50 equity basins Land-based facility, Pipeline running Prince Rupert 2017-2020 BG Group $16 billion Ridley Island, Prince 21.6 mt/y from Cypress to LNG Rupert Ridley Island. Woodside Pe- South site of Grassy Unknown Late 2010’s Unknown Unknown Unknown troleum Ltd. Point, Kitimat, BC BC LNG Export Douglas Cooperative, Floating facility, 2014-2016 $500 million Unknown Unknown Channel LNG Haisla Nation, Kitimat, BC LNG Partners

November 2014 49 Changes in Dynamics in North America InDepth One of the biggest changes to natural gas markets is that shale gas production has taken off in recent years. As of 2012, North America leads the world in shale gas production (Figure 1). But what is the future of shale gas, and how will it affect global LNG markets and projects? Will increased ease of access to shale gas mean greater exports, greater domestic consumption for countries with large reserves, or both?

Shale gas as share of total dry natural gas production in 2012

Shale gas U.S. 39%

Canada 15%

China <1% 0 10 20 30 40 50 60 70

Source: U.S. Energy Information Administration, LCI Energy Insight, Canada National Energy Board, and Facts Global Energy Note: Canadian data uses “marketable production,” which is comparable to dry production.

Figure 1 - ShaleNorth Gas Production America (billion Leads cubic the feet World per day) in [Source: the Production EIA] of Shale Gas While extracting(billion natural gascubic from feetshale perrock formationsday) has been in practice since the 1800s, recent scientific advances in drilling techniques have enabled drilling companies to operate with greater efficiency, resulting in greater productivity. For example, the Eagle Ford shale rig in south Texas pumps an average of 400 more barrels per day of natural gas than seven years ago.4 In the United States, improved technology in shale gas extraction and processing has been a primary factor in reducing US imports of natural gas from Canada. Indeed, the development of horizontal drilling and high-volume hydraulic fracturing has played a significant role in allowing the United States to produce 95% of the gas it consumes domestically as of 2011.5 So how much of an effect have these developments had on US natural gas dynamics?

Indeed, the development of horizontal drilling and high-volume hydraulic fracturing has played a significant role in allowing the United States to produce 95% of the gas it consumes domestically as of 2011.5

Let us take a look at US LNG exports (Figure 2), natural gas imports (Figure 3), and annual natural gas consumption (Figure 4). As Figure 2 shows, we observe a steady decline in the exports of US LNG from 2011 to 2014 and Figure 3 shows a steady decline in natural gas imports as averaged across the whole of the United States from 2008 to 2013. Further, Figure 4 shows a steady increase in natural gas consumption in the United States between 2009-2013.

4 Cockerham, Sean, “More Efficient Fracking Means More Oil and Natural Gas,” Star-telegram, October 6, 2014, accessed October 8, 2014, http://www.star-telegram.com/2014/10/06/6179292/more-efficient-fracking-means.html?rh=1. 5 Barteau, Mark, and Sridhar Kota, “Shale Gas: A Game-Changer For U.S. Manufacturing,” The Energy Institute of the University of Michigan, July 1, 2014, accessed October 15, 2014, http://energy.umich.edu/sites/default/files/PDF Shale Gas FINAL web version.pdf.

November 2014 50 InDepth

Figure 2 - Monthly US LNG Exports [Source: EIA]

Figure 3 - EIA Annual US Natural Gas Imports [Source: EIA]

November 2014 51 InDepth

Figure 4 - Annual Natural Gas Consumption (US) [Source: EIA] How does one explain a situation in which a country is importing and exporting less but consuming more? The answer is simple: the United States is consuming more of the gas it produces. As Figure 5 shows, shale gas rose from less than 1% of domestic gas production in the United States in 2000 to more than 20% by 2014. The EIA predicts that shale gas will account for 46% of the US gas supply by 2035.6

History 2012 Projections 40

20 SHALE GAS

TIGHT GAS 10 LOWER 48 ONSHORE CONVENTIONAL ALASKA LOWER 48 OFFSHORE COALBED METHANE 0 1990 2000 2010 2020 2030 2040

Figure 5 - US naturalUS Natural gas production Gas Production by source, 1990-2040 by Source (trillion in cubicthe Referencefeet) [Source: EIA]Case, With the growth1990-2040 in domestic production, (trillion the cubic United feet) States is less likely to want to import natural gas from Canada (Figure 6). In fact, Canada has already started to show a decline in natural gas exports (Figure 7).

6 Barteau. November 2014 52 InDepth

History 2012 Projections

6 EXPORTS TO MEXICO

4 EXPORTS TO CANADA

2 LNG EXPORTS FROM LOWER 48 STATES

0 ALASKA LNG EXPORTS IMPORTS FROM CANADA -2

-4 LNG IMPORTS

-6 2000 2005 2010 2015 2020 2025 2030 2035 2040

Figure 6 - US USNatural Natural Gas Imports Gas andImports Exports and (trillion Exports, cubic feet) 2000-2040 [Source: EIA] (trillion cubic feet) In other words, it appears there is a trend where the United States consumes more of the gas it produces, and any surplus is sold to other markets. As a consequence, Canada is thus forced to look for alternative markets to export to.

120

100 10

80 8 3 60 6 Bcf/d Billion m 40 4

20 2

0 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Canadian Natural Gas Export Volumes, 2004-2013 Figure 7 - Canadian Natural Gas Export Volumes, 2004-2013 (Source: National Energy Board) Driven by Demand What justifies the investment of billions of dollars to create more than a dozen LNG facilities within the next 5-10 years? Who will be willing to pay for gas from these facilities? With a surplus of gas in both the United States and Canada, both countries may soon be competing for consumers as both countries plan for the construction of LNG facilities. While there is talk of possible exports to Europe, the primary LNG market will likely be Asia. The National Energy Board (NEB) reports that Japan, China, India, and Taiwan have had growing demand for LNG from 2005 onwards (Figure 8), with Japan responsible for 40% and South Korea 16% of global LNG consumption respectively.

November 2014 53 InDepth

450 Growing LNG Demand 400 350 300 250 200 150 100 50 0 Winter 2005/06 Summer 2006 Winter 2006/07 Summer 2007 Winter 2007/08 Summer 2008

Japan South Korea Taiwan China Figure 8 - East-Asia Seasonal LNG Imports (million cubic meters oer day) [Source: NEB] LNG Import Winter 2005-Summer 2008 (106m3/d) In 2010, approximately 30% of Japan’s electricity came from nuclear energy. Today, nuclear energy is no longer used due to the Fukushima incident in 2011. As a consequence, natural gas has increased from 32%-49% of Japanese power generation, a large portion of which is delivered in LNG, making Japan the world’s largest LNG importer. Canada is currently the fifth-largest producer of natural gas in the world and has up to 37 trillion cubic feet of marketable natural gas resources—an amount Natural Resources Canada claims is “enough to meet our current production for over 250 years.”7 Canadian Minister of Natural Resources Greg Rickford has emphasized that market diversification for Canada’s natural gas “remains a top priority for the Government of Canada. Canada has ... the potential to become a major global supplier of LNG.”8 The coastal province of British Columbia in particular looks to be an active area for LNG in the years to come, marking Canada’s potential shift toward being a key LNG exporter to Asian countries. For example, expansion into Japanese and other Asian markets is a major motivation behind the construction of the $30 billion Steelhead facility. Earlier this year, Tokyo Electric Power Co. General Manager Toshiaki Koizumi commented on how he expects Canadian LNG to become one of Japan’s major importers in the future, saying, “We are quite looking forward to having long-term relations with Canadian people and Canadian LNG. . . . We used to line it up, say, Russia, Mozambique, Canada. Currently, it’s Canada, Russia, Mozambique.”9 While natural gas exports appear to have been decreasing steadily in Canada since 2008, most of the aforementioned LNG facility construction projects were planned to begin in 2015, making the possibility of increased exports more likely in the coming years. South Korea and China may soon be significant importers of LNG from the United States and Canada. South Korean Deputy Minister of Energy Kim Jun-Dong commented, “Import costs from the US are likely to be lower than those of LNG from the Middle East,” due to “Asian premium” costs.10 Additionally, South Korea is looking to reduce its greenhouse gas emissions, which have historically been high due to a large consumption of coal, where LNG can act as an appropriate greener substitute. In China’s case, its increased consumption of LNG is largely due to its significant economic growth— its GDP in 2013 exceeded twice the global average—meaning an increased need for energy resources. Singapore, Indonesia, Malaysia, Thailand, the Philippines, and Vietnam are expected to have gas consumption to increase from 9.5 trillion cubic feet in 2013 to 18.7 quadrillion cubic meters by 2030, with nearly 60% of LNG imported from elsewhere.11

7 “Harper Government Announces Approval of Four Long-term LNG Export Licences,” Natural Resources Canada, March 26, 2014, accessed October 16, 2014, http://www.nrcan.gc.ca/media-room/news-release/2014/15723. 8 Ibid. 9 Vanderklippe, Nathan, “In Japan, an LNG revolution looks to Canada,” The Globe and Mail, January 21, 2014, accessed July 18, 2014, http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/in-japan-an-lng-revolution-looks-to-canada/ article16420312/. 10 Ibid. 11 Ibid. November 2014 54 A notable exception to the trend in Asian-North American LNG trading is the case of Taiwan. Taiwan imports 98% of its InDepth natural gas in the form of LNG, accounting to more than 600 billion cubic feet of LNG in 2013 alone.12 Taiwan’s key LNG suppliers are Qatar, Malaysia, and Indonesia, which account for 86% of 2013’s gas imports. Noticeably absent are imports from North America or European countries (including Russia). Economics and Politics Japan is an especially attractive customer of Canadian LNG. Today, Japan is willing to pay $15 USD/Mcf (thousand cubic feet), whereas suppliers in Western Canada typically have been selling at $3 USD/Mcf.13 This implies that if Canadian suppliers were to increase their export price, Japanese customers would still be willing to purchase Canadian LNG over Japan’s current suppliers (so long as Canadian suppliers charge less than $15 USD/Mcf). To compare, the United States has charged an average of $10-15 USD/Mcf since 2010.14 This price gap could bring about large profits for Canadian producers if they can out-compete the United States in the Asian LNG trade in the future. Securing long-term supply commitments has been no easy task for Canadian investors. On July 31, 2014, Apache Corp. pulled out of its partnership with Chevron to construct the Kitimat, BC, LNG project—the most developed of the new LNG projects so far in British Columbia. A lack of secure buyers for LNG led Jana Partners to criticize Apache Corp. for its inability to ensure long-term stability of the LNG plant. Jana Partners has a $1 billion stake in Apache Corp.15 To make matters more complicated for Canadian LNG projects, the controversial Canada-China Foreign Investment Promotion and Protection Agreement (FIPPA), which the Harper government signed into effect on September 12, 2014,16 binds Canada and China to an agreement lasting until 2043 with the consequence that “any BC government or legislature or courts would now be subject to obligations arranged by the Canadian federal government and China,” which could potentially overrule the rights of First Nations.17 FIPPA could therefore dominate BC energy politics for the next two decades. LNG developers must confirm the existence of downstream buyers and sign long-term contracts (typically 20-25 years) with strict terms and structures for gas pricing and distribution to prove the security of their investments to the financing parties. Securing investors and purchasers is difficult due to the expectation of investors that there be purchasers in advance and the expectation of purchasers that there be investors in advance. Usually, one of the two groups has to take the first risk in order to attract the other group, with LNG developers having to attract both groups and to mediate between the demands of both parties. As a result, the LNG business has been limited to companies with strong financial and maybe even political resources. Major international oil companies such as ExxonMobil, Royal Dutch Shell, BP, BG Group, and Chevron, as well as national oil companies such as Pertamia (Indonesia) and Petronas (Malaysia) are active in the North American LNG industry. Besides Japan, Indonesia has its hand in Canadian LNG projects with both Singapore and Jakarta backing the Woodfibre LNG project. Reports say that Sukanto Tanoto, an Indonesian billionaire looking to invest money in LNG, will help finance this project.18 Shipments to Asia are expected to begin as early as 2017 with Tanoto’s RGE Group providing heavy financial support. On May 7, 2014, RGE Group signed a letter of intent with the BC Government. As part of the deal, British Columbia has committed to providing certainty on all government-related costs, including formalizing its new two-tier tax on LNG export terminals.19 Additionally, Shamsul Abbas, CEO of Malaysian oil and gas company Petronas, also questioned the BC Government’s upcoming tax reform, expressing concern about the $22 million in municipal taxes being asked by the government of Port Edward, BC, where Petronas’ LNG project will reside.

12 “Taiwan: Country Analysis Note,” Energy Information Administration, September 1, 2014, accessed October 10, 2014, http://www.eia.gov/countries/country-data.cfm?fips=tw. 13 Angevine, Gerry, and Vanadis Oviedo, “Laying the Groundwork for BC LNG Exports to Asia,” The Fraser Institute, October 1, 2012, Accessed November 27, 2014. http://www.fraserinstitute.org/uploadedFiles/fraser-ca/Content/research-news/research/publications/laying-the-ground work-for-BC-LNG-exports-to-asia.pdf. 14 “Price of Liquefied U.S. Natural Gas Exports,” Energy Information Administration, September 30, 2014, Accessed November 27, 2014, http://www.eia.gov/dnav/ng/hist/n9133us3m.htm. 15 Gilbert, Daniel, and Gillian Tan, “Jana Partners Wants Changes at Apache,” The Wall Street Journal, July 21, 2014, accessed October 3, 2014, http://online.wsj.com/articles/jana-partners-has-apache-stake-of-more-than-1-billion-wants-changes-1405982450. 16 Isfeld, Gordon, “Ottawa Ratifies Foreign Investment Deal with China despite Tensions,” Financial Post, September 12, 2014, accessed September 30, 2014, http://business.financialpost.com/2014/09/12/ottawa-ratifies-contentious-foreign-investment-deal-with-china- despite-tensions. 17 Hong, Beth, “Canada-China FIPPA Agreement May Be Unconstitutional, Treaty Law Expert Says,” Vancouver Observer, October 12, 2012, accessed September 30, 2014, http://www.vancouverobserver.com/politics/canada-china-fippa-agreement-unconstitutional-treaty-law-expert-says. 18 Gordon, Julie, “Woodfibre LNG, British Columbia Sign Deal on Natgas Export Proposal,” Reuters, March 7, 2014, accessed September 30, 2014, http://www.reuters.com/article/2014/05/07/canada-lng-woodfibre-idUSL2N0NT1WN20140507. 19 “Liquefied Natural Gas Income Tax,” Government of British Columbia, October 21, 2014, accessed November 20, 2014, http://www2.gov.bc.ca/gov/topic.page?id=75BD4BF2B6B5493FB8A36DB05EBA764D.

November 2014 55 The Liquefied Natural Gas Income Tax Act imposes a tax on net income from liquefaction activities at any LNG facility InDepth within British Columbia.20 Taxpayers are not required to be residents of Canada nor to have a permanent establishment in British Columbia. The term taxpayers also includes corporations, individuals, and trusts. Most significantly, the tax rate on net income will be 3.5% for taxation years beginning on or after January 1, 2017, increasing to 5% for taxation years beginning on or after January 1, 2037. As observers of the 2011 BC election will have noted, the prospect of a thriving BC LNG industry was one of the centerpieces of Christy Clark’s successful election campaign for BC premier. Clark alleged the project would collect up to $100 billion over the next 30 years, money that would be used to eliminate provincial debt.21 It is still too early to tell whether or not this promise will be fulfilled; however, it is clear that the LNG export tax policy will affect traders of BC LNG, foreign and domestic investors, construction projects, transportation projects, and even BC citizens. This will in turn have consequences for the success of Clark’s election promises. Some investors have expressed their concern that the tax rate is too high and therefore not competitive enough to sustain investors’ commitments to LNG projects, which could lead to an increase in provincial debt rather than alleviating it. Whether or not, for example, RGE group will continue to invest in the Woodfibre LNG project may hinge on future amendments to this tax policy. Conclusion While Qatar remains the largest exporter of LNG in the world,22 the North American LNG market is quickly growing. However, many challenges lie ahead. With geopolitical tensions on the rise in Ukraine, as well as environmental and First Nations activists pressing for energy reform in Canada, factors that at first seem far removed from LNG facilities in the Asia-Pacific region could have a significant impact on legislation, regulations, and financial matters in the years ahead. Environmental politics and strict regulations have been difficult barriers for LNG markets. The approval of the NEB and FERC are required to permit project capacity, construction sites, and service dates. In the case of Canada, this process is lengthy, at times leading to stand-offs among the government, First Nations groups, and environmental regulators, as in the case of Enbridge’s Northern Gateway project.23 Equally important are the factors driving the shale gas revolution in the United States and its surplus of natural gas, which appear to be strong influences in shaping the future of natural gas exports in both Canada and the United States. Capturing a higher-level overview of LNG What does seem clear is that the United States and projects and facilities can enable traders, Canada will compete for foreign consumers as each investors, and analysts to make sound country has excess natural gas to profit from, making investment decisions and enhance overall market understanding. LNG markets are the Asia-Pacific region one of the most dynamic and soon to be the most fruitful in the Asia-Pacific exciting markets in the years to come. region as North American facilities are constructed, international investments made, and the TokyoCommodities Exchange is soon to trade the world’s first LNG futures contracts.24 Whether or not future North American LNG projects will succeed is still too soon to tell. What does seem clear is that the United States and Canada will compete for foreign consumers as each country has excess natural gas to profit from, making the Asia-Pacific region one of the most dynamic and exciting markets in the years to come. f

20 “British Columbia’s LNG Income Tax - An Overview,” Government of British Columbia, October 21, 2014, Accessed November 26, 2014, http://www2.gov.bc.ca/gov/DownloadAsset?assetId=37B76560978C491F961C610E2F483745&filename=lng-income-tax-overview.pdf. 21 “Official Report of Debates of The Legislative Assembly,” The Legislative Assembly of British Columbia, November 4, 2014, Accessed November 26, 2014, http://www.leg.bc.ca/hansard/40th3rd/20141104pm-Hansard-v17n4.htm. 22 “Qatar,” Energy Information Administration, January 30, 2014, accessed October 7, 2014, http://www.eia.gov/countries/cab.cfm?fips=qa. 23 Yee, Adrian, “Enbridge’s Northern Gateway: Energy Politics & Oil Spread Pricing,” ZE Perspective, July 14, 2014, accessed September 15, 2014, http://www.blog.ze.com/2014/07/enbridges-northern-gateway-energy-politics-oil-spread-pricing-2/. 24 “Midterm Management Plan (Fiscal 2014 – 2016),” Tokyo Commodity Exchange, March 1, 2014, accessed November 21, 2014, http://www.tocom.or.jp/news/2014/documents/MidtermManagementPlan_2014-2016_000.pdf.

November 2014 56 Bibliography InDepth Angevine, Gerry, and Vanadis Oviedo. “Laying the Groundwork for BC LNG Exports to Asia.” The Fraser Institute. October 1, 2012. Accessed November 27, 2014. http://www.fraserinstitute.org/uploadedFiles/fraser-ca/ Content/research-news/research/publications/laying-the-groundwork-for-BC-LNG-exports-to-asia.pdf. Barteau, Mark, and Sridhar Kota. “Shale Gas: A Game-Changer for U.S. Manufacturing.” The Energy Institute of the University of Michigan. July 1, 2014. Accessed October 15, 2014. http://energy.umich.edu/sites/default/ files/PDF Shale Gas FINAL web version.pdf. “British Columbia’s LNG Income Tax - An Overview.” Government of British Columbia. October 21, 2014. Accessed November 26, 2014. http://www2.gov.bc.ca/gov/DownloadAsset?assetId= 37B76560978C491F961C610E2F483745&filename=lng-income-tax-overview.pdf. Cockerham, Sean. “More Efficient Fracking Means More Oil and Natural Gas.” Star-Telegram. October 6, 2014. Accessed October 8, 2014. http://www.star-telegram.com/2014/10/06/6179292/more-efficient- fracking-means.html?rh=1. Gordon, Julie. “Woodfibre LNG, British Columbia Sign Deal on Natgas Export Proposal.” Reuters. March 7, 2014. Accessed September 30, 2014. http://www.reuters.com/article/2014/05/07/canada-lng-woodfibre- idUSL2N0NT1WN20140507. “Harper Government Announces Approval of Four Long-term LNG Export Licences.” Natural Resources Canada. March 26, 2014. Accessed October 16, 2014. http://www.nrcan.gc.ca/media-room/ news-release/2014/15723. Hong, Beth. “Canada-China FIPPA Agreement May Be Unconstitutional, Treaty Law Expert Says.” Vancouver Observer. October 12, 2012. Accessed September 30, 2014. http://www.vancouverobserver.com/politics/ canada-china-fippa-agreement-unconstitutional-treaty-law-expert-says. Isfeld, Gordon. “Ottawa Ratifies Foreign Investment Deal with China despite Tensions.” Financial Post. September 12, 2014. Accessed September 30, 2014. http://business.financialpost.com/2014/09/12/ ottawa-ratifies-contentious-foreign-investment-deal-with-china-despite-tensions/. Lamers, Matthew. “B.C.’s 15 LNG Projects: Where They Stand Today.” Pipeline News North. April 17, 2014. Accessed September 30, 2014. http://www.pipelinenewsnorth.ca/news/industry-news/b-c-s- 15-lng-projects-where-they-stand-today-1.1122622. “Liquefied Natural Gas Income Tax.” Government of British Columbia. October 21, 2014. Accessed November 20, 2014. http://www2.gov.bc.ca/gov/topic.page?id=75BD4BF2B6B5493FB8A36DB05EBA764D. “Midterm Management Plan (Fiscal 2014-2016).” Tokyo Commodity Exchange. March 1, 2014. Accessed November 21, 2014. http://www.tocom.or.jp/news/2014/documents/MidtermManagement Plan_2014-2016_000.pdf. “Natural Gas.” Energy Information Administration. November 12, 2014. Accessed November 20, 2014. http://www.eia.gov/forecasts/steo/report/natgas.cfm. “Official Report of Debates of The Legislative Assembly.” The Legislative Assembly of British Columbia. November 4, 2014. Accessed November 26, 2014. http://www.leg.bc.ca/ hansard/40th3rd/20141104pm-Hansard-v17n4.htm. “Price of Liquefied U.S. Natural Gas Exports.” Energy Information Administration. September 30, 2014. Accessed November 27, 2014. http://www.eia.gov/dnav/ng/hist/n9133us3m.htm. “Qatar.” Energy Information Administration. January 30, 2014. Accessed October 7, 2014. http://www.eia.gov/ countries/cab.cfm?fips=qa. “Taiwan: Country Analysis Note.” Energy Information Administration. September 1, 2014. Accessed October 10, 2014. http://www.eia.gov/countries/country-data.cfm?fips=tw.

November 2014 57 Vanderklippe, Nathan. “In Japan, an LNG revolution looks to Canada.” The Globe and Mail. Accessed July 18, 2014. InDepth http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/ in-japan-an-lng-revolution-looks-to-canada/article16420312. Yee, Adrian. “Enbridge’s Northern Gateway: Energy Politics & Oil Spread Pricing.” ZE Perspective. July 14, 2014. Accessed September 15, 2014. http://www.blog.ze.com/2014/07/ enbridges-northern-gateway-energy-politics-oil-spread-pricing-2/.

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