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Glossary

annual contract quantity (ACQ).  
Yearly total delivery quantity as specified in a gas sale agreement or an LNG sale and purchase agreement.
     
associated gas.  
Natural gas that occurs with crude oil reservoirs, either as free gas or dissolved in solution. It is usually produced with crude oil.
     
barrel of oil equivalent (boe).  
A unit used to equate natural gas and other nonliquid fuels to crude oil based on the amount of heat released when combusted. In general, 1 boe ? 5.8 Mcf to 6.0 Mcf natural gas, depending on the heat content and composition of the gas.
     
base load.  
The minimum amount of steady electric power generated over a given period of time, operated to serve around-the-clock demand.
     
bcf.  
An abbreviation for billion (109) cubic feet. Unit used to measure large quantities of gas, approximately equal to 1 trillion (1012) Btu.
     
bcfd.  
An abbreviation for billion cubic feet per day. Unit used to measure the daily volume of gas produced, stored, transported, or consumed.
bcm.  
An abbreviation for billion cubic meters. Unit used to measure large quantities of gas, approximately equal to 35.3 bcf.
     
bcmd.  
An abbreviation for billion cubic meters per day. Unit used to measure the daily volume of gas produced, stored, transported, or consumed.
     
British thermal unit (Btu).  
An energy unit equivalent to the amount of energy needed to raise the temperature of 1 pound of water 1°F from 58.5°F to 59.5°F under standard pressure of 30 in. of mercury. Commonly used for measuring gas and other energy sales quantities.
     
butane (C4H10).  
A normally gaseous LPG hydrocarbon extracted from natural gas or refinery gas streams.
     
cascade process.  
A natural gas liquefaction process that uses a series of refrigerants to obtain successively lower temperatures. This process is mainly promoted by ConocoPhillips and Bechtel.
     
ceiling price.  
The maximum contracted price that may be charged for gas, LNG, and other commodities as specified in the sales contract. Contrast with floor price, which is the lowest or minimum price that can be charged, as specified in the sales contract.
     
coal bed methane (CBM).  
Natural gas, primarily methane, generated during coal formation and recovered by pumping water from coal seams, allowing gas to escape through shallow wells.
     
combined cycle.  
An electric generating technology in which conventional gas combustion turbines are combined with heat recovery steam-powered generation units, increasing the overall efficiency of the generating facility. Electricity is produced from both the feed gas as well as from otherwise lost waste heat exiting gas turbines. In a conventional steam power generating facility, electricity is generated only from the feed gas.
     
compressed natural gas (CNG).  
Highly compressed natural gas stored and transported in high-pressure containers, typically greater than 3,000 psi (200 bar). Commonly used for transport fuel.
     
condensates.  
Light hydrocarbon compounds that condense into liquid at surface temperatures and pressures. They are generally produced with natural gas.
     
conventional gas resources.  
General term used to describe associated and nonassociated gas found within sandstone and limestone reservoirs.
     
cost-insurance-freight (CIF).  
LNG sales contract in which the buyer takes ownership of the LNG cargo at the loading port or during the ship's voyage to the receiving facility. The LNG seller is responsible for the delivery of the cargo, and the contracted sales price includes transportation and insurance costs.
     
cubic feet (cf).  
Common unit of measurement of gas volume equivalent to the amount of gas required to fill a volume of 1 cubic foot under given temperature and pressure conditions.
     
daily contract quantity (DCQ).  
Average daily quantity of natural gas contracted by the gas seller to the gas buyer.
     
delivered ex-ship (DES).  
LNG sales contract in which the buyer takes ownership of the LNG cargo at the receiving port. The LNG seller is responsible for the delivery of the cargo, and the contracted sales price includes transportation and insurance costs.
     
dry gas (lean gas).  
Natural gas, mainly methane, which remains after liquid hydrocarbon components have been removed, making it suitable for pipeline shipping, LNG processing, or industrial usage.
     
engineering, procurement, construction (EPC) contract.  
Contract, typically on a lump-sum basis, awarded to an engineering company during the project execution phase for detailed design, procurement of all the equipment, and construction of the project. The engineering company is responsible for directly contracting with subcontractors and suppliers.
     
ethane (C2H6).  
A normally gaseous NGL hydrocarbon extracted from natural gas or refinery gas streams.
     
flaring.  
The process of disposing uncommercial or otherwise unwanted gas by burning. Operators often flare associated gas in regions with limited gas markets.
     
floor price.  
The minimum contracted price that may be charged for gas, LNG, or other commodities as specified in the sales contract. Contrast with ceiling price, the maximum price that may be charged for the commodity as specified in the sales contract.
     
fractionation.  
The step process that separates NGL hydrocarbons into distinct components, such as ethane, propane, and butane.
     
free-on-board (FOB).  
LNG sales contract in which the buyer takes ownership of LNG as it is loaded on ships at the LNG export facility. The buyer is responsible for LNG delivery, either on its own ships or ships chartered by the buyer. The contracted sales price does not include transportation costs or insurance.
     
front-end engineering design (FEED) study.  
Project design study typically conducted by an engineering company during the project definition phase.
     
gas cap.  
Natural gas present in upper portions of a reservoir, typically above the oil and water layers.
     
gas initially in place (GIIP).  
The total gas volume present in a reservoir or field. Reserve estimates include the proportion of GIIP volumes that can actually be produced.
     
gas/oil ratio (GOR).  
The proportional amount of produced gas to produced oil.
     
gas sales agreement (GSA).  
The contract between a seller and buyer for the sale and purchase of a specified quantity of natural gas for a specified price and term.
     
gas-to-liquids (GTL) process.  
A process that converts natural gas into synthetic liquid petroleum products, such as diesel fuel and blending feedstock.
     
heads of agreement (HOA).  
A preliminary agreement covering the main terms of a future agreement yet to be finalized. It may or may not be binding and is similar to a term sheet.
     
intermediate (cycling) load.  
Power consumption required for a certain number of hours per day, usually supplied by generation plants at moderate fixed and operating costs.
     
Japan crude cocktail or Japan custom clearing (JCC) price.  
Crude oil price based on an average Japan importing price of a basket of crude oil, commonly used as an index for Asian LNG pricing.
     
joules (J).  
Metric unit of energy used for gas sales, mainly in Europe and Australia. Because 1 J is a very small unit of energy, kilojoules (1 X 103 J), terajoules (1 x 1012 J), and petajoules (1 x 1015 J) are commonly used. Specifically, 1 kilojoule = 0.948 Btu.
     
lean gas.  
See dry gas.
     
line pack.  
Gas storage within a pipeline or pipeline network created by increasing the pressure and volume above normal operating levels. This is used to handle short-term demand swings. Sometimes refers to the minimum inventory needed to fill the pipeline to working pressure.
     
liquefied natural gas (LNG).  
Natural gas, mainly methane, that has been cooled to -161.5°C or -259°F and condensed into a transportable colorless and odorless liquid.
     
liquefied petroleum gas (LPG).  
Gas mainly composed of propane and butane, which has been liquefied at low temperatures and moderate pressures. LPGs are extracted from produced natural gas streams or produced in a refinery.
     
maximum daily quantity (MDQ).  
Maximum daily quantity of natural gas contracted by the gas seller to the gas buyer.
     
MBtu.  
An abbreviation for thousand or 103 Btu.
     
Mcf.  
An abbreviation for thousand (103) cubic feet.
     
methane (C1H4).  
The lightest and most abundant of the hydrocarbon gases, it is the principal component of natural gas and LNG.
     
mixed refrigerant process.  
LNG liquefaction process in which methane is first precooled by propane and subsequently liquefied by a mixed-component refrigerant produced from a combination of nitrogen, propane, ethane, and methane.
     
MMBtu.  
Unit of energy produced. An abbreviation for million (106) British thermal units.
     
MMcf (MMf3).  
Unit of gas volume. An abbreviation for million (106) cubic feet.
     
MMcfd.  
Unit of daily gas volume production. An abbreviation for million (106) cubic feet per day.
     
MT.  
An abbreviation for million tons.
     
MTA.  
An abbreviation for million tons per annum (year).
     
natural gas.  
Naturally occurring mixture of hydrocarbon gases from underground sources composed mainly of methane (more than 85% in some cases), ethane, propane, butane, pentane, and impurities including carbon dioxide, helium, nitrogen, and hydrogen sulfide.
     
natural gas liquids (NGLs).  
Natural gas components-including ethane, propane, butane, pentane, and condensates-that are liquid at surface conditions. It does not include methane, which remains in gaseous phase at surface conditions.
     
nonassociated gas.  
Natural gas produced from fields that do not produce oil.
     
peak load.  
Maximum electricity or gas demand during a given 24-hour period or otherwise specified period of time.
     
pentane (C5H12).  
A normally liquid NGL hydrocarbon extracted from natural gas or refinery gas streams.
     
petajoules (PJ).  
A unit of energy equal to 1015 joules.
     
petroleum.  
General term for all naturally occurring hydrocarbon compounds found in rock, including both liquid and gaseous compounds.
     
pig.  
A device with blades, brushes, or measurement instruments inserted into a pipeline for cleaning and inspection purposes.
     
PJ.  
An abbreviation for petajoules.
     
possible reserves.  
Unproved hydrocarbon reserves that are estimated to have at least a 10% chance of being technically and economically producible. These reserves are included in proved + probable + possible (3P) calculations.
     
power purchase agreement (PPA).  
A contract for the purchase of electricity, normally between the owner of the power plant and the buyer of the electricity.
     
probable reserves.  
Unproved hydrocarbon reserves that are estimated to have at least a 50% chance of being technically and economically producible. These reserves are included in proved + probable (2P) calculations.
     
project financing.  
A common method of financing infrastructure or investments in which lenders rely on cash flows generated by the project to repay the debt and on the project assets as collateral for the debt.
     
propane (C3H8).  
A normally gaseous LPG hydrocarbon extracted from natural gas or refinery gas streams.
     
proved reserves (P reserves).  
Proved hydrocarbon reserves that can be estimated with reasonable certainty and having at least a 90% chance of being technically and economically producible under current conditions. These can be further divided into proved developed reserves and proved undeveloped reserves depending on infrastructure available.
     
quad.  
A unit of energy equal to 1015 Btu, roughly equal to 1 tcf.
     
regasification (regas) facilities.  
Facilities to convert LNG to pipeline-transportable gas, mainly methane. The facilities are usually located adjoining ship receiving berths and may include LNG storage facilities.
     
reserves.  
Volumes of hydrocarbons that have a chance of being economically and technically producible.
     
reservoir.  
A subsurface rock or formation having sufficient porosity and permeability to store and transmit fluids such as gas, oil, and water. Reservoirs are typically composed of sedimentary rocks with an overlying or adjoining impermeable seal or cap rock.
     
rich gas.  
See wet gas.
     
sales and purchase agreement (SPA).  
The contract between a seller and buyer for the sale and purchase of a specified quantity of LNG for a specified price and term.
     
shrinkage.  
Volume of natural gas that is extracted into liquid products, water, and impurities during gas processing.
     
standard temperature and pressure (STP) conditions.  
Environmental conditions defined as 20°C and 1 atmosphere (14.7 psi).
     
stranded gas (remote gas).  
Gas field located far from available infrastructure or available markets.
     
sweet gas.  
Transportable and marketable natural gas containing small or negligible amounts of hydrogen sulfide and carbon dioxide.
     
swing.  
Seasonal, daily, or hourly changes in gas or electricity demand.
     
take-or-pay (TOP).  
Minimum contractual volume obliged to be purchased by the buyer, regardless of whether the buyer actually takes delivery.
     
tcf.  
An abbreviation for trillion (1012) cubic feet. Unit used to measure large quantities of gas, typically reserve sizes. Approximately equal to 1 quad of energy.
     
terajoules (TJ).  
A unit of energy equal to 1012 joules.
     
therm.  
Unit of energy equal to 100,000 Btu, commonly used in the United Kingdom for gas pricing; 1 therm is approximately equal to 100 ft3 of gas.
     
wet gas (rich gas).  
Natural gas with significant NGL components.