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Absorption  Absorption is the ability of liquids and solids to soak up water or other fluids,including unwanted gases, in natural gas processing. 

Access  Access is a system under which market players are allowed to use capacity in a

pipeline, network, gas store or other gas facility. Access is central to the implementation of gasmarket liberalisation and contrasts, therefore, with the traditional model where the owners of

transportation systems, stores etc own all the gas flowing through their equipment and act as

exclusive merchants for it. See also Common Carriage, Limited Access, Negotiated Access, 

Third Party Access. 

Acid Gas Acid Gas is Natural Gas containing a proportion of gases such as Carbon Dioxide or

Hydrogen Sulphide which, when combined with moisture, form acidic compounds.

ACQ Annual Contract Quantity. 

ADP Annual Delivery Programme. 

Advance Make Good Alternative name for  Carry Forward. 

Annual Contract Quantity The Annual Contract Quantity (ACQ) is the volume of gas which the

Seller must deliver and the Buyer must take in a given contract year. It may be expressed as a

discreet number or as a multiple of the Daily Contract Quantity.  In practice, many contracts

are written in forms which allow the Buyer to take considerably below the stated ACQ. See also

Downward Quantity Tolerance. 

Annual Delivery Programme The Annual Delivery Programme (ADP) is a schedule of gas

volumes to be delivered on certain dates or within certain periods in a forthcoming contract year

in a long term contract. In practice this will often take the form of a detailed schedule covering

the first few months, with looser numbers for the remainder of the year which are then firmed up

at times laid down in the contract.

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Aquifer  An Aquifer is a body of porous rock saturated with water. Gas fields are usually

underlain by an aquifer which often provides pressure known as Water Drive  to assist gas

production. Underground storage of gas can be achieved by pumping gas down into aquifers

below impermeable cap rocks thus effectively making a gas reservoir. See also Reservoir , 

Underground Storage. 

Arbitrage Arbitrage is buying and selling the same product in two different locations or markets

to take advantage of differences in price.

Associated Gas  Associated Gas is gas which coexists with oil in a predominantly oil field. It

may be Cap Gas  or Solution Gas,  the behaviour and treatment of which are different.

 Associated gas will normally be sold as “sellers’ nomination” gas, i.e. the seller nominates the

volumes of gas available. In traditional gas markets such gas would command a lower price

than Non Associated Gas. 

Autogeneration  Autogeneration is the generation of electricity by an industrial concern

primarily to meet the needs of its own operations See also Combined Heat and Power . 

Backhauling Backhauling is the transportation of gas apparently in the reverse direction to the

main flow of the pipeline. This is usually achieved by swap arrangements rather than by

physical movements. Also known as Reverse Flow.

Balancing Agreement Balancing Agreements are used to define procedures for the use of

capacity in pipelines or production from a gas field:

1) Pipelines: A balancing agreement for a pipeline is an agreement between a pipeline owner

and other users of the pipeline on the procedures to be adopted to ensure that gas volumes

input to and removed from the pipeline are equal over a given period of time. Pipelines

commonly require daily balancing, but some require balancing over shorter periods, down to an

hour, especially where there is a heavy power generation load on the pipeline. Others may allow

longer periods e.g. 3 days up to monthly. Monthly balancing is only appropriate where third

party loads are very small (a few percent) in relation to the main user’s loads.  

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2) Reserves: A balancing agreement for reserves is an agreement between the owners of a gas

field who are marketing their shares of the gas independently of each other. Since each buyer

may have a different demand pattern, the owners agree between themselves that they will not

withdraw reserves at a rate which will cause imbalance in the ownership of the remaining

reserves to exceed certain agreed tolerances. The agreement also defines the remedies that

are to be taken should these tolerances be exceeded. The purpose is to ensure that the

ownership share of the remaining reserves remains constant for all practical purposes.

Base Gas Base Gas is an alternative name for  Cushion Gas. 

Base Load Base load is the rate of delivery (or demand) below which sendout (or demand) is

not expected to fall during a given period.

Beach Price Beach price is a term, mainly used in the UK, to define the price at which offshore

gas is transferred by the producer at the exit from the onshore treatment plant, at which point

ownership is transferred before onward transmission or use.

Blast Furnace Gas Gas produced as a by product from the use of coke in traditional blast

furnaces. This gas was of low Calorific Value (roughly a quarter to a third that of natural gas)

but was used mixed with Manufactured Gas in the days before natural gas.

Block  A block is a geographical area defined in a Concession agreement, often prefixed by

“Exploration”, “Development” or “Production”. Often defined in terms of latitude and longitude,

but may also be defined by reference to a local grid system, for example in the Gulf of Mexico.

Blowdown  A method of producing a gas/condensate Reservoir   by letting the reservoir

pressure fall as gas is produced over time without re-injecting any gas. With this method of

production some Condensate  may condense within the reservoir, where its recovery is no

longer a practical proposition.

Boil Off Gas (BOG) Boil off is a term used in LNG  projects. However well insulated LNG

storage tanks may be, the LNG is always at its boiling point, and small quantities will continue to

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boil off. In liquefaction plants a small volume of boil off gas is required to ensure that the plant

flare is operational. Boil off not needed for this purpose will normally be used in the plant’s own

low pressure fuel system. On LNG tankers driven by steam turbines the gas is normally used as

a fuel to drive the ships.

Booster Station An alternative name for a Compressor Station. 

Border Price The price at which gas is sold at the border between two countries. Typically

based on customs or other official import/export data. Frequently used, especially in Europe, as

a point of reference in gas contracts.

Bottled Gas LPG, usually Butane or  Propane stored in the liquid state at moderate pressure in

steel containers for use in small residential and commercial applications.

Bundled The provision of various services, such as transportation, storage etc. in a compulsory

package which the buyer must accept in total, without being able to choose which elements it

requires. See also Unbundling. 

Butane A member of the alkane group of  Hydrocarbons with four carbon atoms in its molecule

(C4H10, often abbreviated to C4 in non technical usage). Butane is a colourless, flammable gas

at normal temperature and pressure but is easily liquefied by pressure for storage and

transportation. There are two isomeric forms, normal and iso-butane. At atmospheric pressure

iso-butane liquefies at –1200C and normal butane at -100C.

C&F Cost and Freight. 

Calorific Value (CV) Calorific Value is the quantity of heat produced by the complete

combustion of a fuel. This can be measured dry or saturated with water vapour; and net or

gross. See also Gross Calorific Value, Net Calorific Value. 

Cap 1. A clause in a supply contract under which the buyer is assured that he will not have to

pay more than a given maximum price. This type of contract is analogous to a call option. 2. In a  

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Supply Contract where the buyer has flexibility in the volume it can request, the maximum to

which it is entitled either over a period (e.g. a year) or over the life of the contract.

Cap Gas Gas found in a Gas Cap in association with oil but not commingled with it.

Capacity Charge A capacity charge is the payment made for reserving capacity in a pipeline, a

gas store or other piece of infrastructure. Often used interchangeably with Demand Charge. 

Capacity Trading The buying and selling of acquired rights to move gas through the pipelines

of a Transporter.

Carbon sequestration and storage The capture of carbon emissions to the atmosphere and

their storage in carbon sinks, which cam be natural, or may be depleted hydrocarbons fields.

Carbon Trading A systematic procedure for exchanging permits to produce carbon emissions.

See EU ETS. 

Carry Forward A provision within a long term Take or Pay Contract under which a Buyer which

takes more than its Annual Contract Quantity in any year is allowed, under conditions defined

in the contract, to offset this against undertake in subsequent years which might otherwise have

incurred some form of sanction, such as Take or Pay. Sometimes known as Advance Make

Good.

Casing Head Petroleum Spirit (CHPS) An alternative name for  Condensates and especially

for those dropping out at or close to the well head. Mainly used in North America.

CBM Coal Bed Methane. 

CCGT Combined Cycle Gas Turbine. 

CCS Carbon Sequestration and Storage. 

CHP Combined Heat and Power  

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Coal Gas Coal Gas is gas manufactured by the destructive distillation of bituminous coal. The

chief components are hydrogen (more than 50%), methane (10% to 30%) carbon monoxide and

higher hydrocarbons. The water vapour in coal gas kept old pipe joints tight, thus minimising

loss of gas. If natural gas is introduced into the same pipes without remedial action substantial

losses may occur. The carbon monoxide is of course poisonous. Inhaling coal gas was a

favoured way of committing suicide in cities with coal gas distribution.

Coal Mine Methane (CMM)  Methane recovered from coal mines, either while active or after

abandonment, which can be used in local power generation or heat production. It is rarely

available in sufficient quantity to justify processing to pipeline quality for delivery into a pipeline

system. See: Coal Bed Methane. 

Coal Seam Gas See Coal Bed Methane. 

Cogeneration Alternative name for  Combined Heat and Power. 

COI Confirmation of Intent See Memorandum of Intent. 

Coke Oven Gas Coke oven gas is produced as a by-product of the coking of coal and was at

one time a main ingredient of  Manufactured Gas. 

Combined Cycle Gas Turbine A Combined Cycle Gas Turbine (CCGT) is a type of electricity

generation plant in which the heat generated from combustion of the gases is used twice. First,

the gas is burned to drive a Gas Turbine.  Then the hot exhaust gases pass through a heat

exchanger to raise steam for a secondary steam turbine unit. Combined cycle plants have a

thermal efficiency approximately 50% greater than a normal simple or open turbine.

Combined Heat and Power (CHP) Combined Heat and Power (CHP) is the use of a single

unified system to supply both the heat and power requirements of a project, minimising the

waste of heat. The power is produced through Gas Turbines  or another prime mover. The

exhaust heat is harnessed for requirements other than electricity generation. Also known as

Cogeneration and Total Energy.

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Commodity Charge  Tariff   term for a charge made for each unit of gas actually taken or

transported. May be in volumetric or heat units. Distinguish from Standing Charge  and

Demand Charge. 

Common Carriage Common Carriage is a term often used interchangeably with Open Access

and Third Party Access but which is in fact more specific. In a common carriage system all

applicants for capacity (for instance in a pipeline or store) are given access on equal terms. If

the total volume requested exceeds available capacity, the usage of all parties is reduced pro

rata: capacity is rationed among users. Under Open Access, if applicants seek more capacity

than is available, capacity is apportioned on a first come, first served basis or a pay-to-book

system which allows capacity to be contracted for and traded just like renting and subletting

space in a building. A pipeline or store owner who wishes also to use some capacity for itself

must, under Open Access, do so through an arm’s-length affiliate whose commercial relations

with the capacity provider are transparently identical to those of other users. Open Access is

required on US interstate pipelines, where it is known as Contract Carriage. In Europe the term

Open Access is sometimes used loosely as synonymous with Third Party Access, to define the

right of “third parties” to use the pipeline or equipment of another company. In its general form it

encompasses Open Access, Common Carriage, Negotiated Access  and Regulated Access.

One aspect of “Third Party Access” is that it does not in itself imply any solution to the issue of

discrimination between the parties using the facilities. See also Limited Access. 

Compressed Natural Gas (CNG)  CNG is natural gas compressed into gas cylinders, chiefly

used as an alternative for liquid fuels in road vehicles. CNG remains a gas irrespective of the

amount of pressure. Not to be confused with Liquefied Petroleum Gas. 

Compressor Station  Gas loses pressure as it travels long distances through pipelines. To

ensure an even flow, and an adequate pressure at the point of off-take, it must be

recompressed at compressor stations, typically located every 60 km to 100 km along onshore

transmission pipelines. Offshore and in remote areas, it may be convenient and preferable to

maintain higher pressures and allow greater distances between compressor stations. On large

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pipelines compressors are normally driven by gas turbines. Smaller pipelines may use diesel

engines.

Concession  A license awarded either by a Government or State Oil company. It defines an

area, often referred to as a Block,  granted to a company or group of companies for the

exploration, production or transportation of oil and/or gas under specified terms and conditions

and for a fixed period. Concession areas are frequently initially awarded for exploration. If this is

successful then a smaller area is defined, within the exploration block, to be a production block.

May also be applied to permits to construct pipelines, power stations etc.

Condensate  Condensate is a natural gas liquid with low vapour pressure, produced from a

reservoir with high pressure and temperature. Condensate will separate naturally in a pipeline or

separation plant through the normal process of condensation. Can refer to any mixture of

relatively light Hydrocarbons which remain liquid at normal temperature and pressure. There

will be some propane and butane dissolved in it. Unlike Crude Oil,  it contains little or none of

the heavy hydrocarbons which constitute heavy fuel oil. There are three main sources of

condensate: a) The liquid hydrocarbons which are produced from a gas/condensate reservoir.

These may be only slightly distinguishable from a light stabilised crude oil. b) The liquid

hydrocarbons which are recovered at the surface from non-associated gas. c) The liquid

hydrocarbons which are separated out when raw gas is treated. This condensate typically

consists of C5 to C8.

Condensing boiler   A condensing boiler is a water heating device designed for increased

efficiency by using flue gases otherwise vented to atmosphere to pre-heat water in the boiler.

Confirmation of Intent (COI) See Memorandum of Intent. 

Connection Charge Sometimes used as a synonym for  Standing Charge but more correctly

defined as an amount to be paid by the customer in a lump sum or by instalments for a

connection to the supplier’s system. 

Contract Carriage An alternative term for  Common Carriage used in the US.

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Contractor   A term having a specific meaning in a Production Sharing Agreement.  The

Contractor is the company (usually a producing company) which undertakes to explore and/or

produce for the host government in return for defined volumes of the gas or oil produced.

Convergence A loosely defined term which refers to the increasing use of natural gas in the

generation of electricity. Where generation becomes wholly or largely dependent on natural gas,

the interests of the gas supplier and the power generator converge, and the possibility arises of

switching gas between generation and direct supply, depending on the price available for each

outlet. Prices converge when there is no benefit in switching.

Cost and Freight (C&F) See Delivered. 

Cost Gas  Cost gas is the gas which a Contractor   acquires under a Production Sharing

Agreement  to cover the costs of its operations under the contract. Normally the Contractor

operates at its own risk and, if no hydrocarbons are discovered, the costs are entirely for its

account. See also Profit Gas. 

Cost, Insurance and Freight (CIF) See Delivered. 

Critical Pressure  The minimum pressure which must be applied to a gas before it can be

liquefied.

Critical Temperature  The temperature above which a gas will not liquefy, irrespective of the

pressure applied.

Crude Oil A mixture of  Hydrocarbons that exists as a liquid in natural underground reservoirs

and remains liquid at atmospheric pressure after passing through surface separating facilities.

Crude is the raw material which is refined into gasoline, heating oil, jet fuel, propane,

petrochemicals, and other products.

Cryogenics The process of producing, maintaining and utilising very low temperatures (below -

46ºC / - 50ºF). Relevant in the LNG business.

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Cushion Gas Cushion Gas is gas left in a gas store to provide the pressure needed to produce

stored gas, but which itself remains un-produced. It is typically of the order of 50% of the total

stored volume for an Aquifer  and depleted fields, but less for other types of storage. When the

store is initially established Cushion Gas, unless it is un-produced reserves left in a partly

depleted field, may be a large part of the capital cost. Cushion Gas may finally be used when

the store is decommissioned. Also known as Base Gas.

CV Calorific Value. 

Daily Average Send-Out Total volume of gas delivered during a period of time, divided by the

total number of days in the period.

Daily Contract Quantity (DCQ)  The amount of gas which a Buyer nominally undertakes to

purchase and a Seller undertakes to deliver in a defined 24 hour period. Although featuring in

many contracts, in practice this expression is of little meaning in itself. It may serve as a means

of expressing the Annual Contract Quantity  if the latter is expressed as a number of days

multiplied by the DCQ. It may also define the rate at which the Seller must be able to supply

gas. See also: “Daily Delivery Rate”. 

Daily Delivery Rate The Daily Delivery Rate (DDR) is the rate at which the Seller’s facilities

must be capable of delivering gas, expressed as a volume of gas per day, or as a multiple of the

Daily Contract Quantity. Also known as the Maximum Daily Quantity.

Daily Peak Daily Peak is the maximum volume of gas which can or must be delivered/required

on any one day during a given period (usually one year).

DCQ Daily Contract Quantity. See Delivered 

DDR Daily Delivery Rate 

Dedication Contract A Dedication Contract is the correct term for a Depletion Contract, under

which the entire production from a gas field is bought and sold.

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Degree Day  A degree day is a measure of average temperature over a day, and is usually

related to a temperature threshold. For instance, an actual average temperature of 5°C on a day

is 2 degree days warmer than an expected average temperature of 3°C. Can also be used to

measure cumulative cold weather over a period. Thus if the Seasonal Normal temperature for

a month is 18°C and the average actual temperature through the month is expected to be 8°C,

the month will be 10 x 30 = 300 degree days colder than normal.

Delivered A term used mainly in LNG shipping contracts for an arrangement under which the

seller is responsible for arranging and paying for the shipping of the gas, and title passes at the

port of delivery. Generally, the seller’s risks are greater in a delivered transaction because the

buyer only pays for the landed quality/quantity, and the Boil Off Gas  is the seller’s

responsibility. The seller is responsible for clearance through customs and payment of all duties

unless the contract provides otherwise. An alternative name for a Delivered contract is Ex Ship. 

Very similar to Delivered is Cost, Insurance and Freight (CIF). This is an arrangement under

which the Seller arranges and pays for shipping and insurance, as for a Delivered contract, but

risk and title are transferred from the seller to the buyer in a manner defined in the agreement

(e.g. on shipment or on delivery of the bill of lading to the buyer). CIF and Delivered are

frequently, but erroneously, treated as if they were identical because the costs to the seller are

the same. Under a CIF contract, however, the seller can avoid being in possession of the cargo

within the jurisdiction of the buyer country’s government. This may be important for fiscal or

legal reasons. The third arrangement frequently met in the shipping of LNG is Free on Board,

(FOB), which is used to denote deliveries where the buyer arranges for the shipping and there is

a delivery and change of title at the time the cargo is loaded into the ship at the loading port.

Demand Charge A monthly or annual fee paid by a Buyer for a nominated, reserved peak or for

the actual peak volume of gas taken in an hour or day in a given period. Thus a typical

expression might be Dollars per thousand cubic feet of peak hourly capacity per month. Often

used interchangeably with Capacity Charge  although it can be argued that in strict logic

Demand Charge should apply to a gas sale and Capacity Charge to a transportation

arrangement.

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Depletion Contract  A depletion contract is a production sales contract in which the sale

volumes are essentially governed by the performance characteristics of the particular gas field.

 A build-up pattern, an expected Plateau and a method for determining decline volumes will be

defined initially, but may be amended as the production capabilities of the field are better

understood through operating experience. The buyer thus assumes a large share of the

production risks. See also Dedication Contract and Supply Contract. 

Depletion Drive Reservoir  A gas Reservoir  from which gas is recovered by expansion as the

gas pressure falls with the production of gas originally in place. The reservoir can therefore be

treated as if it were a closed tank. Recovery factors of up to 90% of the gas in place can be

achieved. In such reservoirs there is no Water Drive. 

Deregulation Deregulation is the reduction in the role of regulatory bodies usually associated

with an increase in open competition, and achieved by the simplification of the regulatory

framework. Deregulation should not be confused with Liberalisation  which may require the

introduction of transparent regulatory processes.

Derivatives  Derivatives are financial instruments ultimately based on trading a physical

commodity, including gas and other forms of energy. See also Futures, Swaps. 

Dew Point  The temperatures below which either hydrocarbons (hydrocarbon dew point) or

water (water dew point) will start to condense out of a given gas stream. Condensation reduces

the accuracy of metering and creates the nuisance of liquid slugs in pipelines, which will need to

be cleared out periodically by passing a Pig  though the pipeline. In addition, water may react

with carbon dioxide or hydrogen sulphide in the gas stream to form acids, and with methane

itself, under appropriate conditions, to form Hydrates. Therefore, at the Treatment stage, water

is normally removed from the gas stream to reduce the Dew Point to somewhere around -10°C

at standard pipeline pressures.

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Distribution  The final phase in the transportation of gas (and electricity) and its sale to end

consumers through medium-sized pipelines and small diameter low pressure Reticulation 

grids.

Diurnal Storage Literally, daily storage. The short-term or peak storage of gas in pipelines or

gas holders, to meet local, within-day fluctuations in demand, as opposed to seasonal storage.

Diversity Factor   The ratio of the sum of the individual maximum demands of several

consumers or loads, to their simultaneous maximum demand. Usually less than 1 to reflect that

not all customers are expected to take their maximum demands simultaneously. See also Load

Factor. 

Downstream Those activities in the gas chain closest to final customers. See Upstream. 

Downward Quantity Tolerance (DQT) The Downward Quantity Tolerance (DQT) is the amount

by which a buyer may fall short of its full Annual Contract Quantity in a Take or Pay gas sales

contract without incurring sanctions. If there is no provision requiring the buyer to take

supplementary volumes in subsequent years to make good for the deficiency, the Annual

Contract Quantity becomes in effect the ACQ minus the DQT. See also  Make Good and Make

Up. 

DQT Downward Quantity Tolerance 

Dry Gas An alternative name for  Lean Gas.  It does not mean free of water, though in some

cases it may be.

Dry Gas Field  A reservoir which will yield dry/lean gas and very small quantities of

Condensate;  typically less than 10 barrels per million cubic feet. This is equivalent to 350

barrels/MMcm or 60 cubic metres oil/MMcm gas assuming 0.159 barrels/cubic metre.

Dry Hole: A borehole that cannot produce commercial volumes of oil or gas. Conventionally the

term Well is restricted to a borehole that can produce oil or gas.

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EFET  The European Federation of Energy Traders. A pressure group of European energy

trading companies dedicated to stimulating and promoting energy trading.

Efficiency  Efficiency, or Heat Efficiency, is the ratio of energy output to energy input in a

process. One of the most frequently encountered uses of this ratio in the gas industry is in the

use of gas for power generation, where the electricity send out is expressed as a percentage of

the gas consumed, measured on the basis of a common unit e.g. kWh. Care needs to be taken

to distinguish between net and gross efficiency. See also Gross Calorific Value, Net Calorific

Value. 

End user  The consumer of gas, in the residential, commercial or industrial sector. The final

player in the gas chain.

Entry-Exit  An Entry-Exit System is one where a gas shipper is charged an entry price for

putting gas into a transmission or distribution network at a defined entry point, and an exit price

for removing the gas at a defined exit point. The prices can reflect congestion at entry and exit

points, but are the same for any user. The system may be contrasted with point to point

systems, where transportation charges depend on the actual or theoretical distance travelled by

each consignment of gas. Entry-Exit is strongly favoured by the EU as a means of promotinggas liberalisation.

ERGEG  The European Regulators' Group for Electricity and Gas. ERGEG is the European

Commission's formal advisory group of energy regulators. ERGEG was established by the

European Commission, in November 2003, to assist the Commission in creating a single-EU

market for electricity and gas. ERGEG's members are the heads of the national energy

regulatory authorities in the EU Member States.

Ethane  Ethane (C2H6, often abbreviated to C2 in non technical usage) is one of the main

constituent elements of natural gas along with methane. Boils at -84.4ºC. At normal

temperatures it is a dry, colourless and odourless gas. A feedstock for ethylene production.

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Ethylene  Also known as Ethene. A colourless gas (C2H4) produced by cracking

Hydrocarbons such as Ethane or naphtha and used as a feedstock for petrochemicals, such

as fibres and many plastics. Boils at -103.7ºC.

EU ETS The European Union Emission Trading System. The largest multi-national, emissions

trading scheme in the world, and a major pillar of EU climate policy.

Excess Gas Excess Gas is either: a) Gas taken at a rate in excess of the Daily Delivery Rate 

at a premium price; or b) Gas taken in excess of the Annual Contract Quantity. Depending on

the terms of the contract and the status of deliveries such gas may qualify as Carry Forward, 

Make Good or  Make Up gas.

Ex Ship An alternative name to Delivered, used in LNG shipping.

Federal Energy Regulatory Commission (FERC)  A US federal government agency whose

responsibilities include regulating the interstate gas industry. Has no jurisdiction over gas

pipeline and supply where the trade is entirely within individual states.

Feedstock Hydrocarbons used as raw material in an industrial process, not as a fuel. The

principal uses of natural gas as a feedstock are in the manufacture of ammonia and ammonia-

based fertilisers and methanol. A potential major market is the use of gas to make synthetic oil

products such as motor gasoline and middle distillates (see Gas to Liquid). May also be used

to denote the feedstock used to produce electricity, but statistical summaries of gas

consumption normally distinguish this use from chemical feedstock uses. See also Middle

Distillate Synthesis. 

FERC The Federal Energy Regulatory Commission 

Field Appraisal The process of quantifying reserve levels and production potential of a newly

discovered petroleum (oil and/or gas) reservoir, usually by drilling one or more delineation or

appraisal wells.

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Firm Gas Gas which a supplier commits to supply to a purchaser under terms defined in the

contract, without interruption. See also: Interruptible Gas. 

Fischer-Tropsch Process  A chemical process to convert Synthesis Gas  to paraffins by

polymerization. Originally developed in the early 20th Century to make gasoline from coal.

Recent research has identified catalysts which greatly increase the efficiency of the process by

creating very long waxy products, which can then be turned into very high quality liquid fuels by

conventional cracking. See Middle Distillate Synthesis. 

Flammability Limits  The minimum and maximum percentages of gas in air within which the

gas will ignite. For natural gas these limits lie approximately between 5% and 15%.

Flaring The process of burning unwanted natural gas or oil. In the case of gas, usually occurs

when it is associated with oil and cannot be economically exploited or re-injected. Now less

prevalent, as governments seek to profit from the increased value of gas and reduce the advert

environmental impact of burning hudrocarbons.

Flow Meter  A type of  Meter  used to measure gas flows.

FLNG Floating LNG 

Floating LNG  Floating LNG (FLNG) is the use of purpose built or converted ships to enable

regasification of LNG (and liquefaction) to be carried out offshore. FLNG has the advantage that

LNG production and importation can start more quickly than could happen onshore, where lead

times are often lengthened by the local approval process. It also enables the processes to move

location to satisfy short term demand.

FOB Free on Board. Term used in LNG contracts. See Delivered. 

Force Majeure A contractual term used to define circumstances in which a party to a contract is

not obliged to carry out its obligations because of major events outside its control. Force

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Majeure can mean very different things, depending upon the law under which the contract is

written and the provisions of the clause, which can vary widely. Examples of force majeure

could be war, extreme weather, industrial action.

Forward Trading  Buying and selling gas (and other commodities) to be delivered at a later

date, not under a long term contract. See Futures. 

Free on Board (FOB) Term used in LNG contracts. See Delivered. 

Fuel Cell Equipment used to generate electric energy directly from the reaction of hydrogen and

oxygen in the presence of a catalyst, without combustion. Natural gas can be used as a

feedstock from which to obtain the hydrogen. Carbon dioxide will then be produced in the

reformation process.

Fuel Gas  Gaseous fuels, in particular low pressure natural gas used to fuel production or

treatment facilities.

Futures A future is a contract to buy or sell a specified quantity of gas (or any other commodity)

for a specified price on a pre-arranged date. The contract is usually of standard form and can

itself be traded at an exchange such as NYMEX or the IPE. 

Gas:Oil Ratio: The gas:oil ratio is the relationship between the volume of gas produced at

atmospheric pressure and the volume of oil produced in a given field. This volume will normally

vary considerably over the life of the field. May be expressed as a simple volumetric ratio e.g.

500:1 or as cu ft/Barrel. See also Solution Gas. 

Gas and Electricity Markets Authority (GEMA)  The body which determines strategy and

takes major policy decisions for Great Britain’s gas and electricity regulation. Day to day

management of policy, resources and operational issues is carried out by the Office of Gas and

Electricity Markets (OFGEM).

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Gas Cap In a field where oil is saturated with gas, so that it can dissolve no more, some gas will

collect at the top of the reservoir, where it is known as cap gas, and forms a gas cap. Cap Gas

overlies the oil and thus provides additional pressure for oil production, but will therefore often

be produced only after all the oil has been produced and will then be treated as Non

Associated Gas. Unlike Solution Gas, it is not commingled with the oil.

Gas Condensate Field  A field consisting of one or more reservoirs containing a mixture of

gases at reservoir temperature and pressure, but which at normal temperature and pressure

separates out into natural gas and Condensates. A gas condensate field is richer in liquids than

a Dry Gas  field but there is no precise point at which one becomes the other. Sometimes a

reservoir will be produced primarily to obtain the condensate; the gas may be re-injected, used

as a secondary product, e.g. for LNG production or, particularly in areas remote from the

market, flared. The liquid in a gas condensate field is often more valuable than the gas. See

also “Gas Cycling”. 

Gas Condensate Ratio The ratio of gas to condensate in a gas/condensate reservoir, usually

expressed in practice as the ratio of  Condensate to gas. Typical units are barrels of condensate

per million cubic feet of gas.

Gas Cycling or Re-Cycling A process in which produced gas is re-injected into the reservoir

after removal of the condensate. This is to maintain the reservoir pressure and prevent

Condensate  from “condensing” in the reservoir and then becoming difficult to recover. This

contrasts with Blowing Down the gas condensate field.

Gas Day A period of 24 hours starting and ending at a stated time (often 0600 hours).

Gas Detector  An instrument used to detect the presence of various gases, often as a safety

precaution to guard against leakage of flammable or toxic gases.

Gas Gathering System  A gas gathering system is a network of pipelines from a number of

fields, collecting gas and bringing it to a central point, often a processing system or the inlet to a

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major transportation pipeline. Sometimes built where individual fields are not big enough to

 justify investment in separate pipelines and processing plant.

Gas Grid  A gas grid or network is a connected set of pipelines for the transmission and

distribution of gas in a region or country to industrial, commercial and domestic users. See

Reticulation. 

Gas Holder  Over ground structure used to hold gas for within-day Peak Shaving purposes in

urban areas. Gas holders are relics of the manufactured gas era and are steadily disappearing,

their function being largely usurped by Line Pack. 

Gas Lift Injection of gas into an oil reservoir in order to mix gas with oil, reduce the fluid density

and so assist oil flow.

Gas Liquefaction The conversion of natural gas into LNG. 

Gas Marketer   A company that supplies gas to end users. See also Shippers,  and Local

Distribution Companies. Marketers are also major users of transportation capacity.

Gas Processing The separation of oil and gas, and the removal of impurities and natural gas

liquids from natural gas to meet the delivery Specification of a gas transportation pipeline.

Gas Supplier  A company that sells gas to the end consumer (UK).

Gas to Liquid Gas to Liquid GTL processes convert natural gas into Synthetic Gasoline  or

Middle Distillates, using the Fischer Tropsch synthesis method. Increasingly relevant where

gas is found in fields remote from markets such that delivery by pipeline is likely to be

uneconomic.

Gas Turbine  A turbine propelled by the expansion of compressed air, heated by the

combustion of a fuel such as natural gas or gas oil. Widely used for power generation. See

Combined Cycle Gas Turbine. 

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Gas Well  A borehole sunk into the ground with the objective of bringing natural gas to the

surface.

GCV Gross Calorific Value. 

GEMA Gas and Electricity Markets Authority. 

GHV Gross Heating Value. See Gross Calorific Value. 

GNL The French language acronym for  LNG, stands for Gaz Natural Liquifié.

Greenfield Often used to refer to a planned development which must be built from scratch on a

new site, hence green field, without existing infrastructure.

Grid Alternative name for Network. See Reticulation. 

Gross Calorific Value (GCV) The heat generated by the complete combustion of a unit volume

of gas in oxygen, including the heat which would be recovered by condensing the water vapour

formed. The preferred value for expressing gas calorific quality in gas contracts. Also known as

Gross Heating Value, Higher Calorific Value (HCV) or Higher Heating Value (HHV). See also

Net Calorific Value. 

Gross Heating Value (GHV) Alternative name for  Gross Calorific Value. 

GTL Gas To Liquid. 

HCV Higher Calorific Value. See Gross Calorific Value. 

Heads of Agreement A non-binding statement of the main elements of a proposed agreement.

See Memorandum of Intent (MOI). 

Heel LNG LNG left in ship and shore storage tanks to maintain their cryogenic temperatures.

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Henry Hub Henry Hub is the largest centralized point for natural gas spot and futures trading in

the United States. The  New York Mercantile Exchange (NYMEX)  uses Henry Hub as the

notional point of delivery for its natural gas futures contract. NYMEX deliveries at Henry Hub are

treated in the same way as cash-market transactions. Many natural gas marketers also use

Henry Hub as their physical contract delivery point or their price benchmark for spot trades of

natural gas. Henry Hub is owned and operated by Sabine Pipe Line, LLC, which is a wholly

owned subsidiary of ChevronTexaco. Henry Hub is based on the physical interconnection of

nine interstate and four intrastate pipelines in Louisiana.

Hexane A colourless gas (C9H14) naturally occurring in gas fields and normally left as part of

the Condensate stream after separation. Boils at -69ºC.

HHV Higher Heating Value. See Gross Calorific Value. 

Higher Calorific Value (HCV) See Gross Calorific Value. 

Higher Heating Value (HHV) See “Gross Calorific Value” 

High Sulphur Fuel Oil (HSFO) The bottom of the oil barrel. The lowest priced oil product now,

for environmental reasons, often banned or only allowed to be used where rigorous control of

emissions is practiced. In some countries with developing gas-to-oil competition it may

represent the marker for power station fuel.

HOA Heads of Agreement 

Hourly Peak  The maximum volume of gas delivered or demanded in any one hour during a

given period (usually 24 hours).

HSFO High Sulphur Fuel Oil. 

Hub A term, met most frequently in the U.S., but also now used in Europe, for a geographical

point at which several pipelines meet, storage is often available, and opportunities for gas

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trading can be exploited. There are many hubs in the U.S., of which the most important is Henry

Hub. In Europe the largest hub is the National Balancing Point in the UK.

Hydrates  Ice-like solids in which methane molecules are held within the molecular spaces of

the water molecule. Can form in pipelines and wells under certain conditions of near freezing

temperatures and high pressures. Their formation is averted by ensuring that water vapour

levels in the gas are kept below specified levels. See also Treatment, Dew Point. Hydrates are

found naturally beneath the ocean at depths greater than 300m in many areas, where they are

estimated to have locked up many trillions of cubic metres of methane. There is speculation that

these hydrates may provide a commercial resource in the future. Hydrates have also been

proposed as a means of transporting natural gas by sea, possibly competing with LNG. 

Hydrocarbon  An organic compound containing only the elements hydrogen and carbon.

Hydrocarbons exist as solids, liquids and gases.

IEA International Energy Agency. 

IGU International Gas Union. 

Impurities  At the wellhead, natural gas will probably contain methane and various heavier

fractions. It may also contain a number of non-hydrocarbons, some or all of which will need to

be removed. There may also be substances introduced into the well as a result of drilling

operations, such as inhibitors, mud etc. The principal harmful impurities in the gas itself are

likely to be carbon dioxide and sulphur compounds, notably hydrogen sulphide, which can

create corrosion in the pipelines in the presence of water and can seriously damage chemical

plant units built of aluminium. Hydrogen Sulphide is also extremely toxic. Excessive water

vapour can lead to the formation of acids and Hydrates. Some impurities, such as sulphur or

helium, can be recovered economically as by-products if in sufficient concentration in the gas.

Other impurities, such as inert gases and nitrogen cause no directly harmful effects but dilute

the Calorific Value of the gas and mean that pipeline capacity is being wasted. Whether or not

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they should be removed is simply a question of economics. See also Treatment, Natural Gas

Liquids, Condensates. 

Independent Power Plant (IPP)  An IPP is an electric power generation plant owned and

operated independently of the major national or regional entity, producing electricity for an

industrial complex and/or for sale to the electricity grid.

Inert Gas: A chemically inert gas, resistant to chemical reactions with other substances.

Integrated Gasification Combined Cycle (IGCC) A means of generating electricity from coal

and other low grade hydrocarbons by gasifying them at the electricity generation site thereby

gaining some of the efficiency of  Combined Cycle Gas Turbine generation. While the chemical

& engineering principles are well understood it has yet to be demonstrated as a commercial

proposition.

International Energy Agency  A Paris-based organisation which co-ordinates the energy

policies of its member countries. The IEA also compiles detailed energy statistics and country

reports, including countries outside the organisation itself. An autonomous wing of the

Organisation for Economic Co-operation and Development (OECD).

International Gas Union The International Gas Union (IGU) was founded in 1931. A worldwide

non-profit organisation of national gas industry associations whose objective is to promote the

technical and economic progress of the gas industry. Organises the triennial World Gas

Conference.

International Petroleum Exchange The IPEis an energy futures and options exchange based

in London. Gasoil futures have been traded since 1981, Brent crude futures from 1988, and

natural gas futures since 1997. Absorbed into ICE, the InterContinental Exchange in 2005. See

also New York Mercantile Exchange. 

Interruptible Gas Gas made available under agreements permitting the supplier to terminate,

or interrupt deliveries, usually for a limited number of days in a specific period. Usually sold at a

reduced price and used to boost sales/transportation in slack seasons (normally the summer).

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Important in load balancing because (by reducing gas demand) it is an alternative to using

stored gas. The converse of Interruptible Gas is Firm Gas. 

Into Plant Price (IPP) The price charged for gas at its entry to the plant.

IPE International Petroleum Exchange. 

IPP Either  Independent Power Plant or  Into Plant Price. 

Joint And Several  A contract term relating to responsibilities under a contract, usually for

payment, often misunderstood. Where, for example, there are several buyers in one contract, a

 joint responsibility does not mean an equal or pro rata responsibility. It means that if one buyer

defaults on its liabilities the other buyers will be liable to make good that default. Where

responsibilities are several, each party is responsible only for its own default.

Kyoto  Japanese city which was the location for an international agreement on the need to

reduce the level of emissions of greenhouse gases into the Earth’s atmosphere.  

LCV Lower Calorific Value See Net Calorific Value. 

LDC Local Distribution Company. 

Lean Gas Lean gas is gas high in methane content (typically 95% or more) and with few higher

fractions. Hence of relatively low Calorific Value. Also known as Dry gas. The converse of  Rich

Gas. 

Letter of Intent (LOI) See Memorandum of Intent. 

LHV Lower Heating Value See Net Calorific Value. 

Liberalisation A term often confused with Deregulation but often meaning quite the reverse.

Liberalisation is the process of freeing a market from what are perceived as undue monopolistic

forces, to achieve which a high degree of regulation may be required, at least in early years.

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Limited Access  Limited Access refers to a gas distribution system in which the host pipeline

owner moves its own merchant gas under different rules to those applying to outsiders

contracting for spare capacity. The system applies to local distribution companies and intrastate

pipelines in the US and is analogous to but not identical with Negotiated Access.  See also

Common Carriage. 

Limited Liability  A provision in very large gas contracts under which limits are set to the

amounts payable by a defaulting party in a contract.

Limited Recourse Financing See Project Financing. 

Line Pack  Line pack is a procedure for allowing more gas to enter a pipeline than is being

withdrawn, thus increasing the pressure, “packing” more gas into the system, and effectively

creating storage. The “packed” gas can subsequently be withdrawn when needed. A useful

method of meeting short term (hourly or diurnal) peak demand requirements. In some areas,

where there is a particularly high peak demand, a series of additional pipeline loops may be laid

near the entry to a network to provide additional line pack. Such systems are effectively a

modern version of the traditional Gas Holder. 

Liquefaction The conversion of natural gas into LNG. 

Liquefied Natural Gas See LNG. 

Liquid Market A trading market characterised by the ability to buy and sell with relative ease,

usually because there are many buyers and sellers.

Liquefied Petroleum Gas Liquefied Petroleum Gas (LPG) is Propane, Butane,  or propane-

butane mixtures which have been liquefied through pressure, mild refrigeration, or a

combination of both. Usually a derivative of refinery operations but often stripped out of natural

gas streams, if rich enough. Conventionally sold in steel containers as Bottle Gas. Not to be

confused with LNG. 

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LNG (Liquefied Natural Gas) LNG is Natural Gas which has been cooled to a temperature,

around the boiling point of methane (-162ºC), at which it liquefies, thus reducing its volume by a

factor of around 600. The exact boiling of any gas mixture and the reduction in volume will

depend on its composition. The process of Liquefaction is carried out in a liquefaction plant.

Mostly these are very large scale plants built for projects transporting gas by sea, but in many

countries small LNG plants have been built to liquefy gas during the seasons of low demand to

provide Peak Shaving when required. LNG Plants consist of one or more LNG Trains, each of

which is an independent gas liquefaction unit. It is more cost effective to add a train to an

existing LNG plant, than to build a new LNG plant, because infrastructure built for early trains,

such as ship terminals and other utilities, may be capable of being used or expanded for new

LNG trains. The term Train is sometimes extended loosely to embrace the relevant shipping,

storage and other facilities required to bring the resultant LNG to market. Liquefied gas is

transported and stored as a boiling liquid under slight positive pressure until required for use,

when it is warmed and allowed to re-gasify. In the case of Peak Shaving, the gas will normally

be regasified at the plant itself or possibly transported for short distances by road, but large

scale transportation is by sea, in specially designed insulated LNG vessels and delivered to

LNG terminals, which have the requisite facilities for storage and regasification - the process by

which LNG is warmed, usually through a heat exchanger, in order to become once more

gaseous before emission into the Gas Grid. 

LNG Plant See LNG (Liquefied Natural Gas). 

LNG Storage See LNG (Liquefied Natural Gas). 

LNG Terminal See LNG (Liquefied Natural Gas). 

LNG Train See LNG (Liquefied Natural Gas). 

LNG Vessels See LNG (Liquefied Natural Gas) 

Load Duration Curve A visual and statistical expression of a number of (daily) demands over a

long period, most often a year. Demands are normally ordered with the highest to the left and

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Madrid Forum The Madrid Fotum, otherwise known as the European Gas Regulatory Forum,

set up to discuss issues regarding the creation of a true internal European gas market. The

participants include national regulatory authorities, Member State governments, the European

Commission, transmission system operators, gas suppliers and traders, consumers, network

users, and gas exchanges.

Make Good  Make Good Gas is gas which a buyer must take in a later year because it has

failed to take its full Annual Contract Quantity obligation in an earlier year, but has not used its

full Downward Quantity Tolerance. It must nevertheless take excess gas in subsequent years

to make good its deficiency, before it is entitled to claim any Make Up Gas to which it is entitled

through shortfalls greater than the Downward Quantity Tolerance.

Make Up Make Up Gas is gas for which a buyer has paid under  Take or Pay obligations but not

taken, and may have rights to receive in subsequent years for no further charge or at reduced

prices after it has taken gas in excess of an agreed threshold volume. This is commonly the

Annual Contract Quantity  but may, for example, be ACQ minus Downward Quantity

Tolerance. Make up gas should not be confused with Make Good Gas. 

Manufactured Gas Gas manufactured from coal or oil to supply town grids in the days beforeNatural Gas.  See also Blast Furnace Gas,  Coke Oven Gas,  Coal Gas,  Oil Gasification, 

Town Gas. 

Maximum Daily Quantity (MDQ) An alternative name for  Daily Delivery Rate. 

Maximum Daily Rate (MDR) An alternative name for  Daily Delivery Rate. 

MDR Maximum Daily Rate.

MDQ Maximum Daily Quantity. See Daily Delivery Rate. 

MDS Middle Distillate Synthesis. 

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Memorandum of Intent (MOI) Also known as Confirmation of Intent and Letter of Intent. A half

way house to the signing of a full contract. Its legal status is rather unclear and its value lies

largely in how it is viewed by the parties concerned. It will normally be a fairly brief document

setting out the principal framework of the contract and specifying a date by which it is expected

that a full contract will be completed. An MOI will often have a relatively brief validity, but in

some cases they have served to govern active operations over a period of years. Also known as

a Memorandum of Understanding (MoU) and Heads of Agreement (HoA).

Memorandum of Understanding (MOU) See Memorandum of Intent. 

Mercaptans Chemical compounds of sulphur used as Odorants. 

Merchant Pipeline  A pipeline system which itself buys and sells part or all of the gas it

transports, in contrast to a pipeline which simply carries gas on behalf of others. See also Open

Access, Negotiated Access, Common Carriage. 

Meter  Measuring devise, usually located at a point where ownership is transferred, for example

at the entry to a customer’s premises, city gate, na tional border or gas processing plant. Note

that to determine the energy content of the gas it will be necessary to monitor the composition &

hence calorific value of the gas. This is done at high pressure meter stations but not normally

downstream of a city gate. Depending on the size of flow, meters may be: Flow meters,

measuring gas throughput using a rotor which is made to revolve by the gas flowing through

them; Ultrasound meters, more sophisticated, based on the principle that sound waves travel

faster with than against the flow. By measuring the difference in travelling time between the two

sets of measurements the gas flow rate can be measured to an accuracy of more than 0.5%;

Orifice plate meters, older, and less accurate than other meters. Calculate flow rates by

measuring the drop in pressure over a pierced obstructing plate placed in the pipeline. See also

Telemetry. 

Methane A colourless, odourless flammable gas, lighter than air under normal conditions (CH4,

often abbreviated to C1 in non technical usage). Methane is the first member in the alkane

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(paraffin) series and is the chief constituent of  Natural Gas. At atmospheric pressure, it liquefies

at -162ºC.

Methanol Methyl alcohol, produced from natural gas via Synthesis Gas. Used as a chemical in

the resin and paint industry and in the manufacture of Methyl Tertiary Butyl Ether, (MTBE) and

acetic acid, but also of interest as a possible total or partial substitute for motor gasoline in cars.

Very toxic.

Middle Distillate Synthesis (MDS) A chemical process using the Fischer-Tropsch synthesis

method for making synthetic middle distillates (principally naphtha, kerosene and gas oil) from

natural gas.

Midstream  Those activities in the gas chain concerned with moving gas between the source

and local distribution. See Upstream. 

MoU Memorandum of Understanding. See Memorandum of Intent. 

National Balancing Point (NBP) The NBP is an imaginary (notional, or virtual) point at which

all gas that has paid the entry charge to enter the UK National Transmission System is deemed

to be located. The point at which most UK gas trading takes place, and the largest gas hub in

Europe. See Entry Exit. 

Natural Gas  Natural gas (NG) is a mixture of generally gaseous hydrocarbons occurring

naturally in underground structures. Natural gas consists mainly of Methane  and variable

proportions of  Ethane, Propane and Butane. There will usually be some condensate and/or oil

associated with the gas. More specifically, the term is also used to mean treated natural gas

which is supplied to industrial, commercial and domestic users and meeting a specified quality.

Natural Gas Act (NGA) Seminal example of deregulation/ liberalisation in the USA.

Natural Gas Liquids (NGLs)  Heavier hydrocarbons found in natural gas production streams

and extracted for disposal separately. Within defined limits ethane, propane and butane may be

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Netback The price or value of a gas, at e.g. the border or the wellhead, calculated by deducting

the costs associated with getting it from that point to the eventual point of sale from its

competitive value at that point of sale. Used to estimate the comparative value of selling gas to

various markets, and the worth of producing gas at all.

NetworkL Alternative name for a Gas Grid. 

Network Code A detailed contractual regime governing access to a gas grid. Network Codes

exist or are being developed in several countries, especially in Europe. In North America the

rules of the system are referred to as “The Tariff”. In particular, the contractual regime for the

gas grid in Great Britain operated by National Grid. It is continually amended through rules

approved by the GB energy regulator, (Ofgem). See also Tariff  and Rates. 

New York Mercantile Exchange (Nymex)  The world’s largest physical commodity futures

exchange. Has existed for 130 years and pioneered the development of energy futures and

options contracts in the 1970s.

NGLs Natural Gas Liquids. 

NGV Natural Gas Vehicle. 

NHV Net Heating Value, an alternative name for  Net Calorific Value. 

Nitrogen Oxides  Oxides of Nitrogen (NOx) resulting from the combustion of fuels, causing

atmospheric pollution in the form of smog.

Non Associated Gas Non-Associated is gas found in a reservoir which contains no crude oil,

and can therefore be produced in patterns best suited to its own operational and market

requirements. See also Associated Gas. 

Non Recourse Financing See Project Financing. 

nTPA Negotiated Third Party Access. See Negotiated Access. 

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Open Cycle Gas Turbine (OCGT)  A gas turbine, often derived from aero-engines, used for

peak generation of electricity. Also used in conjunction with a steam turbine in a combined cycle

power plant. When only the gas turbine is used it may be termed “single cycle”. 

Open Season  A procedure for demonstrating to a regulator that capacity is offered on a

transparent basis. It is used principally where pipelines are required by regulation to offer only

transportation services, for example in North America and the Southern Cone of South America.

It is also being used elsewhere as a means of gathering information about potential interest in a

pipeline , LNG, storage etc project to help the sponsors decide how and when to size the

project.

Off-Peak The period during a day, week, month or year when the load being delivered by a gas

system is not at its maximum volume.

Orifice Plate Meter  A type of gas Meter. 

Over the Counter Trading (OTC) Trading that takes place outside a formal Exchange.

Peak Day The day in the year on which the demand for gas is highest. In temperate areas this

is normally a cold day in mid winter. In warmer areas it may occur midsummer, when there is a

high air conditioning load met either directly by gas or by gas-fired power. A crucial indicator in

planning and sizing gas infrastructure.

Peak Hour   The hour in the day in which demand for gas is highest. Chiefly relevant to

distribution systems. Is normally around the midday or evening meal time

Peak Load The maximum load produced or consumed by a unit in a stated period of time. In

some tariff systems it is an important component of the tariff design, since it defines the capacity

that is booked in the gas delivery system and must be paid whether or not used.

Peak Shaving Peak shaving is a means of reducing the Peak Load on the gas transportation

and supply system by supplying some gas from sources at or close to the point of ultimate

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consumption, thus improving the average Load Factor . Peak shaving may be daily or seasonal

and will be handled in a variety of ways: - Underground storage, peak shaving LNG plants,

Line Pack,  Gas Holders,  propane-air plant and, occasionally, special peak shaving supply

contracts. A non-storage alternative to peak shaving is to interrupt Interruptible Gas supplies.

Pentanes Plus Often used interchangeably with Condensates or C5+ but excluding Propanes 

and Butanes. 

Permeability  A measure of the ease with which liquids or gas flow through a reservoir rock.

Compare this with Porosity. Gas will flow more easily than oil, and so can be recovered from

rocks with lower permeability. Permeability is measured in Darcies. Gas reservoirs may have

permeabilities of only a few millidarcies.

Petrochemical  An intermediate chemical derived from petroleum, hydrocarbon liquids, or

natural gas, such as ethylene, propylene, benzene, toluene, and xylene.

Petroleum The general name for  Hydrocarbons, including Crude Oil, Natural Gas and NGLs. 

The name is derived from the Greek word petros (rock) and the Latin word oleum (oil).

Pig Equipment used to clean or flush out liquids and other accumulated and unwanted items

from the inside of an oil or gas pipeline. It is inserted into the pipeline and carried along by the

flow of oil or gas. An “intelligent pig” includes measuring and sensing equipment which can be

used to inspect a pipeline internally, which is useful after it has been buried underground

Pipeline A tube for the transportation of crude oil or natural gas between two points, either

offshore or onshore.

Pipeline Capacity The amount of oil or gas that can be passed through a pipeline over a given

period of time.

Plateau In long term gas contracts the period of years for which the Annual Contract Quantity 

remains flat. The Plateau will normally be preceded by a build up period, during which the

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volumes increase and, in the case of a Depletion Contract  will be followed by a period of

decline until further production is no longer economic.

Porosity The proportion of a rock volume (expressed as a percentage) that is occupied by the

voids between mineral grains. Used to help estimate the volume of hydrocarbons in a field.

Compare this with Permeability. 

Possible Reserves One of several definitions of gas reserves. See Proven Reserves. 

Power Purchase Agreement (PPA)  A contract between a power station and the electricity

purchasing organisation for the sale of electricity.

Primary Energy The gross amount of energy used, measured in the quantities of the original

fuel produced (e.g. crude oil) before conversion to other forms (e.g. refined petroleum products

or electricity). Thus hydroelectric power and nuclear power are Primary, but power from

generating stations consuming fossil fuels is not.

Probable Reserves One of several definitions of gas reserves. See Proven Reserves. 

Production Sharing Agreement (PSA)  An agreement between an international producing

company and a host government or state oil company under which the international company

acts as risk-taking contractor investing in exploration and/or production facilities in return for the

right to export or sell a quantity of gas or oil that may be produced from the Concession or

Block.  Sometimes known as a Production Sharing Contract. The terms are interchangeable

and the use of one or the other depends on the country.

Production Sharing Contract (PSC)  An alternative name for a Production Sharing

Agreement. 

Profit Gas  Frequently used to signify the gas received by a Contractor   in a Production

Sharing Agreement to provide the profit in the operation. Normally the Contractor will receive

Cost Gas to cover its costs and, after other minor provisions, the remaining gas will be split with

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the host government in agreed proportions. In some countries profit gas is also subject to

income tax, in other jurisdictions the State Oil Company is assumed to pay the income tax

liability of the contractor. The proportion of profit gas is adjusted depending on local practice.

May be used to signify the totality of gas remaining after Cost Gas, Royalty and similar items,

including therefore both the Government’s and the Contractor’s shares. 

Project Financing A method of financing in which the lender makes loans directly to a project

and may claim repayment only out of that project. In theory, the lender has no recourse to the

project sponsor’s other assets (non-recourse financing) but in practice this is rare. More

commonly the extent of the sponsor’s liability is strictly defined (limited recourse financing).  

Propane A member of the alkane (paraffin) group of hydrocarbons with three carbon atoms in

its molecule ( C3H8, often abbreviated to C3 in non technical usage). A frequent component of

natural gas, also sold as a form of  Bottled Gas. Liquefies at -42ºC.

Proven Reserves  Those quantities of petroleum which, by analysis of geological and

engineering data, can be estimated with reasonable certainty to be commercially recoverable,

from a given date forward, from known reservoirs and under current economic conditions,

operating methods, and government regulations. Proven (proved) reserves can be categorisedas developed or undeveloped. Where probabilistic methods have been used to estimate

reserves, proven reserves are those with a better than 90% chance of being economically

recoverable. Sometimes abbreviated as P90. Reserves with a greater than 50% chance but less

than 90% chance are defined as Probable, or P50. Reserves with a greater than 10% chance

but less than 50% chance are Possible or P10. Reserves may be classified as proved, if

facilities to process and transport them to market are operational at the time of the estimate or

there is a reasonable expectation that such facilities will be installed. “Reasonable expectation” 

is usually taken to mean that a developer has taken the decision to build the necessary facilities

and the development plan has been approved by the relevant authorities. Thus large resources,

such as those known to exist in North Alaska, are not classified as “proven” because there is no

route to market. Different countries have adopted many different definitions of reserves, but gas

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Regasification The reconversion of LNG into gas suitable for pipeline transportation. See  LNG. 

Regulated Access Access to infrastructure under terms and conditions set by or agreed with a

Regulator .  Such access will usually be open to all qualifying customers. See Common

Carriage. 

Regulator  

(1)  A mechanical device for controlling the pressure of gas within acceptable limits. Typically

installed when has enters a low pressure distribution system for final use by small customers.

(2)  The person or body appointed to oversee the operation of the regulated parts of a gas

industry. See Regulation. 

Regulation Regulation is a substitute for free market operation typically, in the gas industry,

where all or part of the operations are carried out by institutional or natural monopolies.

Provides a temporary or permanent counterweight to the economic power of the monopoly.

Often exercised politically by government departments, but in many countries independent

regulation is thought preferable. In any case the rules governing regulation will normally have

been laid down explicitly by government legislation. Regulation can be economic  –  restricting

the revenue and profits of operators - or legal  –  policing legislation. Regulators are normallyclosely involved in the setting up of liberalised market systems, when they may use their central

position to interpret and rule on the applicability of legislation either ex-ante or ex-post. See

Common Carriage. 

Renewable Energy An energy form, the supply of which is partly or wholly regenerated in the

course of the annual solar cycle. Thus solar and wind energy, hydropower and fuels of

vegetable origin are regarded as renewable; mineral fuels and nuclear power are not.

Reservoir  A reservoir is an accumulation of oil and/or gas in a permeable and porous rock such

as sandstone. A petroleum reservoir normally contains three fluids (oil, gas and water), which

separate into distinct sections, owing to their varying specific gravities. Gas occupies the upper

part of the reservoir as it is the lightest, oil the middle section, while water occupies the lower

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section. See also Permeability,  Porosity,  Gas Cap,  Aquifer ,  Solution Gas,  Proven

Reserves. 

Reticulation  A reticulation network is a small diameter, low pressure gas system serving

residential and commercial customers. (From the Latin word reta, meaning net). See also

Distribution. 

Retrograde Condensate A gas condensate which, in the reservoir, is close to the Dew Point of

the fluid. A small reduction in pressure, by production of the field, leads to the condensation of

higher hydrocarbons in the reservoir, causing a lower  Recovery Factor . 

Reverse Flow An alternative term for  Backhauling. 

Rich Gas Rich gas is gas with relatively large quantities of heavier fractions in its composition

(typically up to about 15%) and thus of high Calorific Value.  Also known as Wet Gas.  The

converse of  Lean Gas. See also Natural Gas Liquids, Condensates. 

Royalty  A tax on production volumes, often paid in kind, which is levied as a percentage of

production. It is therefore not related to the profitability of the production project, merely to the

volume of gas (or oil) produced.

R:P Ratio The Reserves: Production Ratio is the number of years that current reserves would

last at current production levels. Thus reserves of 100 divided by consumption of 20/year gives

an R:P ratio of 5, and implies a life of 5 years for the reserve.

RPI-X A regulatory formula by which a regulated monopoly is allowed to increase its prices each

year by the retail price index (RPI) minus a defined amount or percentage x (x is a variable).

Gives consumers falling real prices and forces the utility to reduce costs if it is to maintain its

level of profitability.

Sales Gas Raw gas, after processing to remove LPG, condensate and carbon dioxide. Sales

gas usually consists mainly of methane and ethane and is odorised. See Odorisation. 

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Salt Cavity Storage  The storage of gas in caverns leached out in gas-tight salt strata. Such

caverns may be generated during the recovery of salt for commercial purposes, or may be

purpose-built for gas storage.

Scrubbing The process of purifying a gas or liquid by washing it with suitable chemicals in a

contact vessel.

Seal The layer of rock overlying a gas field which prevents the gas escaping from the reservoir.

It is therefore of low Permeability. Salt and fine clays can provide good seal.

Seasonal Normal The average (or normal) result for the time of year. Thus Seasonal Normal

Temperature (SNT) is the average temperature on a calendar day, where the average has been

measured over a suitably long period. Likewise Seasonal Normal Demand, Seasonal Normal

Weather. SNT is an important factor in developing forecasts of gas usage. See Weather

Correction. 

Seasonal storage Storage designed to be filled at times of low (season) demand and emptied

at times of high demand, over months rather than days.

Security of Supply Security of supply is a term with several meanings including: the provision

of adequate infrastructure to cope with annual and peak demand; the provision of sufficient gas

to meet annual and peak demand; ensuring that a country or area does not rely exclusively on

one, or very few sources of supply.

Seismic Survey  A technique for establishing the presence of underground geological strata

using sound waves. There are two main techniques - reflection or refraction. In the oil and gas

industry by far the most common is reflection. In a reflection survey sound waves are sent into

the ground and the echoes from boundaries between rock with different properties of density

and sound velocity are recorded. The sound waves recorded at the surface can then be used to

create maps of the rock layers in the subsurface to reduce the risk of drilling dry holes. A

reflection seismic survey may be either 2D, in which the reflections are recorded along a line or

3D, in which the lines are very closely spaced to deliver a three dimensional view of the

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subsurface. A refraction seismic survey is a different technology in which the sound waves are

refracted along rock boundaries rather than reflected from them.

Send-Out The quantity of gas delivered by a plant or system during a specified period of time.

Shipper A party negotiating for the transport of gas on its own behalf or as an agent for another.

In liberalised markets shippers may not be allowed to operate transportation systems.

Slug Catcher  Plant installed in a gas pipeline system or gas processing plant to catch “slugs” of

liquid. Usually this takes the form of a long section of pipe, inside which the pressure is allowed

to drop by a controlled amount. See also Pig. 

SNT Seasonal Normal Temperature.

Solution Gas Solution Gas, unlike Cap Gas  is Associated Gas  dissolved in oil. Produced

inevitably with the oil and separated from it at the well-head. Solution Gas production is thus a

function of oil production and of the Gas/Oil Ratio, which changes over the life of the field. It is

therefore an unreliable gas supply and difficult to market, unless the buyer or seller have large

alternative sources. Has in the past largely been flared or vented but this is becoming less

acceptable, largely for environmental reasons, although is still not uncommon in remoter areas.

Separation is often carried out in two or three stages to maintain the gas pressure for pipelining

as far as possible. Gas from the final stage separator is at low pressure and is normally used in

the field or on the platform during production. The gas may be re-injected into the reservoir if it

will not break through into the oil wells.

Sour Gas  Gas containing a high level of Carbon Dioxide or Hydrogen Sulphide, which are

corrosive in the presence of water. They may therefore require drying or removal to preserve

the pipeline. The converse of  Sweet Gas. 

Spark Spread The spark spread represents the difference between the cost of fuel and the

price of electric power produced. A positive spread indicates that the price of the power is higher

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than that of the fuel, and the spread is profitable. The spread can be calculated for any input

fuel, such as natural gas, coal, or heating oil.

Specification  The technical description of the allowable limits of the chemical composition of

gas which may be admitted into a pipeline or process.

Specific Gravity The ratio of the density of gas to that of air, or the ratio of the density of a

liquid to that of water, in both cases at the same temperature and pressure.

Spot Trading A loose term covering the buying and selling of gas other than under a long term

contract. Generally in trading parlance “spot delivery” means immediate delivery.  

Standing Charge Tariff term for a fixed charge, typically per quarter or per year, irrespective of

the amount of gas actually taken. Synonymous with Connection Charge  but to be

distinguished from Demand Charge. 

Storage  For natural gas storage facilities fall into several categories. Seasonal storage

comprises depleted gas fields; Aquifers;  Salt Cavity Storage;  mined caverns; and disused

mines. Peak storage includes Gas Holders, Line Pack,  lengths of pipeline buried specifically

for storage use, and LNG storage used either for base-load or peak-shaving duties, depending

on the market. Increasingly used in liberalised markets to enable gas to be trade at any time of

the year for reasons not related to peak demand. See also Peak Shaving. 

Straddle Plant  A gas processing plant that “straddles” a gas transportation pipeline to remove

NGLs from the gas stream. Because it is often more economic to transport  Rich Gas a straddle

plant is required to process the plant to final sales specification. The alternative location of a gas

processing plant is close to the producing field. NGLs are then transported as liquids away from

the field area either by separate pipeline or other means.

Supply Contract  A contract under which the seller undertakes to supply gas in guaranteed

volumes over a fixed period of time. A Supply Contract is therefore in sharp contrast to a

Depletion Contract  as the seller assumes the volume risks. Whilst certain fields may be

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envisaged in the contract, the seller will normally have the right to substitute other suitable gas if

necessary.

Swaps

(1) Arrangements under which gas destined for a market is delivered elsewhere, and substitute

gas is supplied to the final market. For instance, Nigerian LNG contracted to Italy is delivered to

France, and other gas contracted to France is delivered to Italy.

(2) In trading, the exchange of a fixed price for a floating price for a future delivery.

Sweet Gas Gas containing little or no Carbon Dioxide or Hydrogen Sulphide. Converse of  Sour

Gas. 

Swing  The inverse of Load Factor ,  defined as: Peak volume transported (sold) / Average

volume transported (sold) Expressed as a percentage. Thus a load factor of 60% is a swing of

167%. Often used to describe the flexibility of supplies over a year.

Syngas Synthesis Gas. 

Synthesis Gas Also known as Syngas, Synthesis Gas is a mixture of carbon monoxide and

hydrogen produced from methane or other hydrocarbons and steam and used to produce

various chemicals, notably methanol. It is also the basis for the Fischer Tropsch process. See

also: Middle Distillate Synthesis.

Synthetic Gasoline Motor gasoline produced from coal (by the Fischer Tropsch process) or

from natural gas (by the Fischer Tropsch process or via methanol). See also Middle Distillate

Synthesis. 

Take or Pay  Take or Pay (TOP) is a common provision in gas contracts under which, if the

Buyer’s annual purchased volume is less than the Annual Contract Quantity  minus any

shortfall in the Seller’s deliveries, minus any Downward Quantity Tolerance,  the Buyer pays

for such a shortfall as if the gas had been received. The Buyer may have the right in subsequent

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years to take the gas paid for but not received, either free or for an amount to reflect changes in

indexed prices. See also Make Up Gas. 

Tariff  A schedule of rates or charges offered by a common carrier or utility. Tariffs are

commonly available for all parts of the gas industry where third party access is enforced or

offered, for example for gas transmission in pipelines, for the use of gas stores, for gas sales to

residential customers.

Telemetry A technique used in the gas industry for recording information at a distance from the

Meter  or other recording device, typically by radio transmission of the data.

Temperature/ Demand Analysis  The statistical analysis of the causal relationships between

weather (and other) factors and the demand for gas. An essential prelude to forecasting

demand. See Seasonal Normal and Weather Correction. 

Temperature Correction The process of adjusting actual gas usage to what it would have been

at Seasonal Normal  Temperatures, to allow comparisons to be made between results for

different time periods, typically years. See weather correction. 

Third Party Access Abbreviated as TPA. See Common Carriage. 

Title Transfer   Title transfer is the transfer of which ownership of gas from the seller to the

buyer. Typically this may occur somewhere between the well head and entry into the

transmission system, at national border crossings, at the City Gate etc. In the world of traded

gas, possible points of transfer become more numerous. A special case is the transfer of LNG

at some specified point on the high seas. See Delivered. 

TOP Take or Pay. 

Total Energy An alternative name, now obsolete, for  Combined Heat and Power. 

Town Gas Manufactured Gas piped to consumers from a gas plant.

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TPA Third Party Access See also Common Carriage. 

Trading Volume The number of contracts that change hands during a specified period of time.

See also Churning. 

Train An LNG production unit. See LNG. 

Transit  The transportation of gas through a country or gas system en route to the final

customer. For example, Russian gas may transit through Ukraine en route to customers in

western Europe.

Transmission  The transportation of large quantities of gas at high pressures, often through

national or regional transmission systems. The gas is then transferred into local distribution

systems for supply to customers at lower pressures.

Transmission Company  The company responsible for operating a transportation system. In

liberalised markets there is increasing pressure for such companies to be restricted to offering

capacity in pipelines for sale, and to be barred from selling gas itself. The companies are also

commonly known as Transmission System Operators (TSOs) a title which reinforces their

restricted role. See Unbundling. 

Transmission Pipeline A network of pipelines moving natural gas from a gas processing plant

via compressor stations, to storage centres or distribution points.

TSO Transmission System Operator. See Transmission Company. 

Transparency A general term meaning open publication of information. In the gas industry it is

generally used in relation to costs, prices and capacity, where information has traditionally been

considered commercially confidential. Costs and prices generally reflect a number of elements,

such as production, transportation, storage, service. Transparency generally involves separating

out or  Unbundling these elements, usually as a result of regulatory requirements. A further step

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towards transparency involves the publication of the methodology used to calculate the different

elements of costs and prices.

Transporter  A gas pipeline company transporting gas belonging to other companies. Also the

operator of LNG vessels. See Transmission Company. 

Trap A configuration of reservoir and seal rocks that can confine gas (or oil) which are lighter

than water normally contained in the reservoir rock. Structural traps are formed by a closed

structure of  Reservoir  rock overlain by a sealing formation (the Seal). May also be formed by

stratigraphic changes within a reservoir rock in which case it is known as a stratigraphic trap.

Treatment  Any gas purification process, but most generally applied to the treatment of gas

immediately after production, to bring it to acceptable standard for the market in question and/or

to extract valuable components for separate sale. This may involve the removal of  LPGs and

will certainly involve stripping out Condensates, Carbon Dioxide and Hydrogen Sulphide and

other sulphur compounds (see also Acid Gas) mercury and excessive water which may be in

the raw gas. Other impurities are occasionally encountered. Whether other inert gases such as

nitrogen, helium etc are extracted will be a matter for economic evaluation.

Ultra-Sound Meter  See Meter. 

UKCS United Kingdom Continental Shelf.

Unbundling  Unbundling is a term with several meanings for the gas industry but more

accurately, and originally, it was used to denote the separation of different services and the

charges associated with them. Originally used in the US in restructuring the telephone industry ,

it was adopted in the gas industry to denote the separation of gas sales from transportation and

storage services. This is still the most usual meaning of the term, particularly in North America,

where large customers are now free to purchase gas and services separately. However the

European Commission uses the term Unbundling to mean the financial disaggregation of

different functions within integrated companies, such as transmission and marketing. Where

companies perform multiple functions, the Commission has sought to require separate

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accounting for the functions. Its aim is therefore much more related towards Transparency and

eliminating the potential for anti-competitive cross subsidisation activities.

Underground Storage  The storage of gas, for strategic or peak shaving reasons, in

underground reservoirs. Depleted gas fields are often suitable. Other possibilities include

depleted oil fields, Aquifers  and Salt Cavity Storage.  In the context of LNG, underground

storage refers to normal LNG storage tanks which are, however, buried to provide greater safety

in the event of leakages.

Unitisation Agreement  When a gas field extends over two or more production licences or

leases with different ownership, most countries require that the field owners “unitise” their

holdings i.e. decide how the reserves and production of the total field will be shared between the

licensees, thus enabling the efficient depletion of the reserves. The Unitisation Agreement

normally provides for the appointment of a field operator, a method of determining the reserves

underlying each licence or lease and the frequency of reserve re-determination.

Upstream  Upstream, Midstream and Downstream are imprecisely defined terms used to

separate activities along the gas and oil chain into homogenous groups. Upstream typically

refers to exploration, development & production of oil & gas. Sometimes also defined toembrace Midstream, which typically covers transmission (as opposed to distribution) LNG

shipping etc. Downstream typically refers to activities associated with delivery to final

consumers, such as distribution systems and connections to customer premises.

Valley Gas Interruptible Gas supplied during the slack months, usually summer.

Water Drive In a porous rock, as gas is withdrawn from the reservoir, water expands into the

region formerly occupied by the gas as pressure is released. This often has the result of

trapping volumes of gas so that they cannot be produced, thus reducing the recovery of gas.

Not a problem with a Depletion Drive Reservoir . See Aquifer. 

Water Gauge  A measure often used to express the pressure of gas in distribution systems,

using water instead of mercury. The gauge records how far up a gradated tube gas will lift a

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column of water. Distribution systems normally operate at about 300mm (12 inches) water

gauge (i.e. 300mm above atmospheric pressure). For comparison, atmospheric pressure is a

little above 10 metres of water.

Wayleave The strip of land around a gas pipeline or other utility to which the utility has legal

right of access for building and maintenance.

Weather correction  A procedure for estimating what customer demand would have been in

Seasonal Normal  weather conditions. Thus in a cold year seasonal normal demand will be

lower than actual demand and vice versa.

Well A hole drilled into the ground, mostly by rotary rigs, in which a drill bit, which actually cuts

the rock, is turned on the end of a drill string, made up of lengths of hollow steel pipe which are

added to the string as the bit drills deeper into the ground. Wells have various descriptions

depending on the stage of the production process at which they are drilled. Exploration wells are

drilled to discover if gas (or oil) can be found; Evaluation or appraisal wells are drilled to obtain

more information about a previous discovery; Development wells are drilled to produce gas from

a field which is being developed, and are called Producing wells when the field enters

commercial production.

Wet Gas Natural gas containing condensable Hydrocarbons. A synonym for  Rich Gas. 

Wheeling Physically redirecting gas from one pipeline system to another at a Hub as opposed

to changing the title by swap arrangements.

Wobbe Index Occasionally referred to as the Wobbe number. A measure of the rate at which

gas will deliver heat on combustion and hence of the compatibility of a gas with gas burning

equipment.

Working Gas In a gas store, the total volume of gas present less Cushion Gas, In other words

the gas available for normal working. Hence working gas capacity - the total capacity of a

storage facility minus cushion gas.

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GLOSSARY OF UNITS

Absolute Pressure The sum of  Atmospheric Pressure and Gauge Pressure i.e. pressure by

reference to a vacuum

 Atmosphere: A measure of pressure, now largely superseded by the Bar to which it is nearly

identical. Originally equal to 760 mmHg it has now been redefined as 101,325 pascals and

consequently 1 atmosphere = 1.01325 bars.

Atmospheric Pressure The pressure of the weight of air and water vapour on the surface of

the earth.

Bar   The most used unit for expressing gas pressure. It is equal to 100,000 pascals (N/m2),

which is the official SI unit. 1 Bar is approximately atmospheric pressure.

bbl A US barrel, 1 barrel = 0.159 cubic metres = 42 U.S. gallons (approx=35 imperial gallons).

The abbreviation is also sometimes written as B or b.

bbl/day Barrels per day. Usually used to quantify a refiner’s output capacity or an oilfield’s rate

of flow.

Bcm Billion cubic metres – (i.e milliard or 109 cubic metres).

Billion In the US 109. Although elsewhere billion often signifies 1012, the Natural Gas industry

has generally adopted the US usage. 

Boe  Barrels of oil equivalent - a frequently used number to quantify general energy

requirements for practical purposes. One boe is usually taken as representing 5.8 MMBtu 

gross.

British thermal unit A unit of heat still widely used in the gas industry, notably in North America

and in LNG. Originally defined as the amount of heat required to raise the temperature of one lb

of water from 60° to 61° Fahrenheit, it is now defined in relationship to a fixed number of Joules

(1055.056 to three decimal points). The most common multiple is one million Btu, normally

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abbreviated to MMBtu and U.S. dollars/MMBtu is perhaps the most frequently used unit for

comparing gas prices on a common basis. See also Therm. 

Btu British Thermal Unit. 

Cal Calorie. Formerly the SI unit of energy, now no longer part of the system but still extensively

used in Europe. The calorie was nominally the amount of heat required to raise 1 gram of water

by 1°C at 1 standard atmosphere and starting from 14.5°C, but is now defined arbitrarily as:

4.1868 J. The most common multiple used is the Megacalorie (Mcal).

Cf  Cubic feet. Measure of gas volume, referring to the amount of gas needed to fill a volume of

one cubic foot at 14.73 pounds per square inch absolute pressure and 600F.

cm Cubic metres. Note however that cm is also the official abbreviation for centimetre.

Deca Therm Also deka therm. A term sometimes used in the U.S. in lieu of one million Btu.

Gauge Pressure The amount of pressure shown by a gauge, i.e. the amount by which the

pressure exceeds atmospheric pressure. See also Absolute Pressure. 

GJ GigaJoule. One GigaJoule is approximately equal to 9.478 MMBtu. One million Btu equals

1.055 GJ.

GW GigaWatt.

GWh GigaWatts per hour.

J  Joule - The unit of energy in the SI system and the unit approved by the International Gas

Union for the expression of heat in the gas industry. Its definition is one Newton metre. In

practice the industry has been reluctant to embrace the Joule for commercial purposes and it is

only current in Australia and New Zealand. For practical purposes the multiples most in use are

the MegaJoule (MJ) and the GigaJoule (GJ), although Petajoule (PJ)  is also seen. For quick

calculations 1 GigaJoule is very close in value to 1 MMBtu. 

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Kelvin  Measurement of temperature equivalent to 1/273.16 of the interval between absolute

zero and the triple point of water. The official unit of the SI system. The Kelvin is identical to 1

degree Celsius, which is the term most often used in practice, but the scale is different

(0ºC=273.16 K). Note incidentally that the Kelvin is itself the unit of measurement and

references to 1 degree Kelvin are incorrect.

km Kilometres.

kW KiloWatt = One thousand Watts.

kWh KiloWatt hour - Together with its multiples, rapidly becoming the most used unit for energy

in gas, although its use is not strictly in accordance with the SI system or with IGU preferences.

Since 1 Joule = 1 Watt per second, the conversion factor 1 kWh = 3.6 MJ is exact.

Long ton 2240 lb. The most usual form of non-metric ton.

Mcal Megacalorie.

Mcf  Thousand cubic feet.

Mcm Thousand cubic metres.

Milliard Synonymous with US billion - 109.

MJ MegaJoule.

MM Widely used in the gas industry to mean a million (106), although this usage is incorrect,

according to the SI convention. Similarly M is often used to represent a thousand (103). When

the lower case letters m and mm are used, these usually denote a thousand and a million

respectively. In everything else M is correctly used to mean Million as in MWh.

MMbbl Million barrels.

MMBtu Million British Thermal Units. 

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MMcf  Million cubic feet.

MMcm Million cubic metres.

MMscf  Million standard cubic feet See scf. 

MMscm Million standard cubic metres.

Mt Million tonnes.

Mtoe Million tonnes of oil equivalent.

Mtpa Million tonnes per annum, a widely used unit of volume in the LNG industry.

MW MegaWatt - one million Watts.

MWh MegaWatt hour.

ncm Normal Cubic Metre - A cubic metre measured at 0° C and 1013 mbar dry. The most used

metric unit for measuring the volume of gas. It differs from the Standard cubic metre (scm)  in

the temperature at which the measurement is made. The Normal cubic metre thus contains

about 5% more heat content than the Standard cubic metre.

PJ PetaJoule - Standard unit in the Australian gas industry, equivalent to 1 million (106) GJ and

therefore roughly equal to 1 million MMBtu.  It is therefore close to 1 Bcf or some 30 million

cubic metres.

ppm Parts per million.

Pressure The force exerted by one body on another, measured as force over area e.g. newtons

per square metre.

Psi Pounds per Square Inch – common US/English unit of pressure, 14.5psi = 1 bar.

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Ton (t) A term covering a variety of measures: The metric tonne (1000 kg); The long ton (2240

lbs); The short ton (2000 lbs). The metric tonne is the one increasingly used.

W Watt - The basic unit of electrical power, defined as one joule per second.

Water Drive  In a porous rock, as gas is withdrawn from the reservoir, water expands into the

region formerly occupied by the gas as pressure is released. This often has the result of

trapping gas so that it cannot be produced, thus reducing recovery from the reservoir. Water

drive is not a problem with a Depletion Drive Reservoir . See also Reservoir. 

Water Gauge  A measure often used to express the pressure of gas in distribution systems,

using water instead of mercury. Distribution systems normally operate at about 300mm (12

inches) water gauge (i.e. 300mm above atmospheric pressure). For comparison, atmospheric

pressure is a little above 10metres of water. See also Gauge Pressure. 

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