Four years after being tabled, the Asian naphtha industry is closer toward finalizing the inclusion of STS, or ship-to-ship transfer details into the open spec naphtha (OSN) contract with the drafting of an addendum which will be disseminated to the industry as per Platts. The STS transfer details will make it easier for arbitrage cargoes to be put into the chain.
The addendum is not as yet a permanent feature in the OSN contract --following the dissemination of the draft on Friday, there will be a 14-day period for the industry to familiarize itself with the terms of the addendum after which five trial shipments of STS transfers will be monitored. Any company carrying out STS transfers is expected to submit a formal notification of their activities to the brokerage Aspen, and companies can also submit feedback on the addendum. Panel members of the OSN meeting will then convene to consider any necessary changes to the addendum and its acceptability to the industry, after which the addendum will be made permanent. No time frame for this was stated, but a trader said the process should be "fairly quick" given that STS transfers take place regularly.