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 55% * price
Brent dated Standard share of Brent dtd 45% * price
   SUM (above) = Feed cost USD/bbl

 

Products Formula
Propane Standard yield 1% *price / weighted average bbl-multiplier of feed (7.39)**
Butane Standard yield 1% *price / weighted average bbl-multiplier of feed (7.39)**
Gasoline 10ppm Standard yield 30% *price / weighted average bbl-multiplier of feed (7.39)**
Naphtha Standard yield 1% *price / weighted average bbl-multiplier of feed (7.39)**
Jet Standard yield 5% *price / weighted average bbl-multiplier of feed (7.39)**
Diesel 10ppm Standard yield 45% *price / weighted average bbl-multiplier of feed (7.39)**
LSFO Standard yield 1% *price / weighted average bbl-multiplier of feed (7.39)**
HSFO Standard yield 9% *price / weighted average bbl-multiplier of feed (7.39)**
  SUM (above) = product value USD/bbl
Neste reference margin = Product value - feed cost - standard refining variable costs (2 USD/bbl) - sales freights (1.02 USD/bbl)***

 

** REB bbl-multipilier 7,25 and Brent dtd bbl-multiplier 7.55
*** Sales freight is fixed standard 15 USD/ton. An estimate is amede that 50% of production is exported. Freight formula = 15* 50% / 7.39

Freights

  • Primorsk/Rotterdam freight USD/bbl = flat rate 8.55 USD/ton * WS TD17 (month average) / 100 / 7.25
  • Primorsk/Porvoo freight USD/bbl = flat rate 3.84 USD/ton * WS TD17 (month average) / 100 / 7.25
  • Sullom Voe/Porvoo freight USD/bbl =  flat rate 8.90 USD/ton * WS TD17 (month average) / 100 / 7.55