Calculating Neste reference margin
Neste reference margin
- Pricing basis at Porvoo and Naantali refineries
- Feed structure comparable to Neste
- Product yields comparable to Neste
- Similar cost structure vs. Neste total refining margin
Key differences between Neste reference margin and Neste total refining margin
- Actual product yield structure and feedstocks
- Actual product sales distribution, pice differentials and timing
- Actual variable costs (production and freights)
- Base oils contribution
- Contango contribution
How to calculate Neste reference margin
| Item | Reference price |
|---|---|
| REB | Urals/Brent CIF differential Rotterdam (Platt's) USD/bbl - freight Primorsk/Rotterdam + freight Primorsk/Porvoo |
| Brent dated | Brent dtd (Platt's) + freight Sullom Voe/Porvoo |
| Product prices | Platt's CIF cargoes quotes USD/t |
| Feeds | Formula |
|---|---|
| REB | Standard share of REB 65% * price |
| Brent dated | Standard share of Brent dtd 35% * price |
| SUM (above) = Feed cost USD/bbl |
| Products | Formula |
|---|---|
| Propane | Standard yield 1.5% *price / weighted average bbl-multiplier of feed (7.30)** |
| Butane | Standard yield 1.5% *price / weighted average bbl-multiplier of feed (7.30)** |
| Gasoline 10ppm | Standard yield 28% *price / weighted average bbl-multiplier of feed (7.30)** |
| Naphtha | Standard yield 1% *price / weighted average bbl-multiplier of feed (7.30)** |
| Jet | Standard yield 6% *price / weighted average bbl-multiplier of feed (7.30)** |
| Diesel 10ppm | Standard yield 46% *price / weighted average bbl-multiplier of feed (7.30)** |
| HSFO | Standard yield 10% *price / weighted average bbl-multiplier of feed (7.30)** |
| SUM (above) = product value USD/bbl | |
| Neste reference margin | = Product value - feed cost - standard refining variable costs (2.5 USD/bbl) - sales freights (1.23 USD/bbl)*** |
** Weighted average bbl-multiplier of production
*** Sales freight is fixed standard 15 USD/ton. An estimate is amede that 60% of production is exported. Freight formula = 15* 60% / 7.30
Freights
- Primorsk/Rotterdam freight USD/bbl = flat rate 8.72 USD/ton * WS TD17 (month average) / 100 / 7.25
- Primorsk/Porvoo freight USD/bbl = flat rate 11.79 USD/ton * WS TD17 (month average) / 100 / 7.25
- Sullom Voe/Porvoo freight USD/bbl = flat rate 11.79 USD/ton * WS TD7 (month average) / 100 / 7.55