1 LOGIN”) = MENU (?) HARE: ndustry Glossary IBICIDIE|FIG|HINJIK|LIM|N/O|PIQIRIS|T|UV/WIX|YIZ bsorption Absorption is the ability of liquids and solids to soak up water or other fluids, including unwanted gases, in atural gas processing cess Access is a system under which market players are allowed to use capacity in a pipeline, network, gas store or ther gas facility. Access is central to the implementation of gas market liberalisation and contrasts, therefore, with the aditional model where the owners of transportation systems, stores etc own all the gas flowing through their equipmen nd act as exclusive merchants for it. See also Common Carriage, Limited Access, Negotiated Access, Third Party ccess. cid Gas Acid Gas is Natural Gas containing a proportion of gases such as Carbon Dioxide or Hydrogen Sulphide ‘hich, when combined with moisture, form acidic compounds. CQ Annual Contract Quantity. DP Annual Delivery Programme, dvance Make Good Alternative name for Cary Forward, nnual Contract Quantity The Annual Contract Quantity (ACQ) the volume of gas which the Seller must deliver and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 ¢ 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. Aquifer An Aquifer is a body of porous rock saturated with water. Gas fields are usually underlain by an aquifer whict often provides pressure known as Water Drive to assist gas production, Underground storage of gas can be achieve 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 « 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 pipe 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 equ 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 smal few percent) in relation to the main user's loads. 2) Reserves: A balancing agreement for reserves is an agreement between the owners of a gas field who are marke their shares of the gas independently of each other. Since each buyer may have a different demand pattern, the own agree between themselves that they will not withdraw reserves at a rate which will cause imbalance in the ownership 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.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 Calorific Value (roughly a quarter to a third that of natural gas) but was used mixed with Manufactured Gas in the 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 referenc: 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 produ: 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 L is always at its boiling point, and small quantities will continue to boil off. In liquefaction plants a small volume of boil c gas is required to ensure that the plant flare is operational, Boil off not needed for this purpose will normally be used the plant's own jow pressure fuel system, On LNG tankers driven by steam turbines the gas is normally used as a fue drive the ships. Booster Station An alternative name for a Compressor St: Border Price The price at which gas is sold at the border between two countries. Typically based on customs or othe 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 fo 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 Unbundiing 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 pressur but is easily liquefied by pressure for storage and transportation. There are two isomeric forms, normal and iso-butar ‘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 cant measured dry or saturated with water vapour; and net or gross. See also Gross Calorific Value, Net Calorific Value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 pi: 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 carbo! 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 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 Chuming Churning is a term used in gas trading to indicate the number of times on average that gas is traded betw: initial sale and ultimate consumption. CIF Cost, Insurance and Freight. See Delivered. City Gas City gas is a term used in some parts of the world, for instance Egypt, India, Japan, Korea, to refer to gas distributed to customers through a local distribution system, downstream of the City Gate. Such customers will be a mixture of residential, commercial and industrial depending on particular local circumstances but will, typically, exclud power generators, In the past city gas may have been gas manufactured from coal and oil but is now predominantlyCNG Compressed Natural Gas. Coal Bed Methane (CBM) Coal bed methane is methane that is or can be recovered from coal seams. Also known Coal Seam Gas, CBM is recovered by driling wells into suitable coal seams and then reducing pressure in the rock, usually by pumping out water, which may be saline and present environmental issues, until the methane can be desorbed from the coal. CBM, unlike conventional natural gas, is not trapped beneath a Seal but is adsorbed into the coal. It can therefore occur in coal deposits which are laterally very extensive. Production rates are typically much les, than for conventional gas. Depletion rates are typically quite slow and wells may produce for many years. CBM may < be produced as a safety measure before coal is mined to reduce the incidence of potentially explosive gas mixtures during mining operations, See Coal Mine Methane. 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 ocour. 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 ca 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 ingrec of Manufactured Gas. Combined Cycle Gas Turbine A Combined Cycle Gas Turbine (CCGT) is a type of electricity generation plant in wh the heat generated from combustion of the gases is used twice. First, the gas is burned to drive a Gas Turbine. The 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 Ga Turbines or another prime mover, The exhaust heat is harnessed for requirements other than electricity generation. ‘Also known as Cogeneration and Total Energy.store) are given access on equal terms. If the total volume requested exceeds available capacity, the usage of all par 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 contracted for and traded just like renting and subletting space in a building. A pipeline or store owner who wishes alt 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 loos as synonymous with Third Party Access, to define the right of “third parties” to use the pipeline or equipment of anoth 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 f: 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 adequate pressure at the point of off-take, it must be recompressed at compressor stations, typically located every 6! km to 100 km along onshore transmission pipelines. Offshore and in remote areas, it may be convenient and prefera to maintain higher pressures and allow greater distances between compressor stations. On large pipelines compress 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 a: Block, granted to a company or group of companies for the exploration, production or transportation of oil and/or ga: 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. 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 press 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 a pressure. There will be some propane and butane dissolved in it. Unlike Crude Oil, it contains little or none of the he: hydrocarbons which constitute heavy fuel oil. There are three main sources of condensate: a) The liquid hydrocarbor which are produced from a gas/condensate reservoir, These may be only slightly distinguishable from a light stabilise 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 gac otherwise vented to atmosphere to pre-heat water in the boiler. Confirmation of Intent (COl) See Memorandum of Intent. Connection Charge Sometimes used as a synonym for Standing Charge but more correctly defined as an amount be paid by the customer in a lump sum or by instalments for a connection to the supplier's system.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 pow generator converge, and the possibilty arises of switching gas between generation and direct supply, depen 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 cx ofits operations under the contract. Normally the Contractor operates at its own risk and, ifno 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 in gasoline, heating oil, jet fuel, propane, petrochemicals, and other products. Cryogenics The process of producing, maintaining and utilising very low temperatures (below -46°C / - 50°F). Relev. in the LNG business. Cushion Gas Cushion Gas is gas left in a gas store to provide the pressure needed to produce stored gas, but whic 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 itis un-producec reserves left in a partly depleted field, may be a large part of the capital cost. Cushion Gas may finally be used when store is decommissioned, Also known as Base Gas. Daily Average Send-Out Total volume of gas delivered during a period of time, divided by the total number of days i 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 little meaning in itself. It may serve as a means of expressing the Annual Contract Quantity if the latter is expresse: a number of days muttiplied by the DCQ, It may also define the rate at which the Seller must be able to supply gas. S also: “Daily Delivery Rate’.Daily Peak Daily Peak is the maximum volume of gas which can or must be delivered/required on any one day durin: given period (usually one year). DCA Dally 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. 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 Sease Normal temperature for a month is 18°C and the average actual temperature through the month is expected to be 8° 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 fo arranging and paying for the shipping of the gas, and tile passes at the port of delivery, Generally, the seller's risks a greater in a delivered transaction because the buyer only pays for the landed quality/quantity, and the Boil Off Gas i: the seller's responsibilty. The seller is responsible for clearance through customs and payment of all duties unless th contract provides otherwise. An alternative name for a Delivered contract is Ex Ship. Very similar to Delivered is Cos 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 defin: in the agreement (e.g. on shipment or on delivery of the bill of lading to the buyer). CIF and Delivered are frequently, 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 governme This may be important for fiscal or legal reasons. The third arrangement frequently met in the shipping of LNG is Fre 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 volt of gas taken in an hour or day in a given period. Thus a typical expression might be Dollars per thousand cubic feet « 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. 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 method for determining deciine volumes will be defined initially, but may be amended as the production capabilities 0 the field are better understood through operating experience, The buyer thus assumes a large share of the productic risks, See also Dedication Contract and Supply Contract.Derivatives Derivatives are financial instruments ultimately based on trading a physical commodity, including gas an: other forms of energy. See also Futures, Swaps. Dew Point The temperatures below which either hydrocarbons (hydrocarbon dew point) or water (water dew point) v start to condense out of a given gas stream, Condensation reduces the accuracy of metering and creates the nuisan Of liquid slugs in pipelines, which will need to be cleared out periodically by passing a Pig though the pipeline. In addi water may react with carbon dioxide or hydrogen sulphide in the gas stream to form acids, and with methane itsetf, under appropriate conditions, to form Hydrates. Therefore, at the Treatment stage, water is normally removed from gas stream to reduce the Dew Point to somewhere around -10°C at standard pipeline pressures. 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 lo 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 mi fall short of its full Annual Contract Quantity in a Take or Pay gas sales contract without incurring sanctions. f then ho 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. DAT 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 1 barrels per milion cubic feet, This is equivalent to 350 barrels/MMcm or 60 cubic metres oil/MMcm gas assuming 0.1 barrels/cubic metre. Dry Hole: A borehole that cannot produce commercial volumes of a borehole that can produce oil or gas. or gas. Conventionally the term Well is restricte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 transmise or distribution network at a defined entry point, and an exit price for removing the gas at a defined exit point. The pric can reflect congestion at entry and exit points, but are the same for any user. The system may be contrasted with po 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 promoting gas liberalisation. ERGEG The European Regulators’ Group for Electricity and Gas. ERGEG is the European Commission's formal advi group of energy regulators. ERGEG was established by the European Commission, in Novernber 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 -84,4°C. At normal temperatures it is a dry, colourless and odourless gas. A feedstock for ethylene production 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 -103.7°C. 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; 01 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 with individual states. Feedstock Hydrocarbons used as raw material in an industrial process, not as a fuel. The principal uses of natural g 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 distilates (see Gas to Liquid). May also be used to denote the feedstock used to produce electricity, but statistical summaries of gasField Appraisal The process of quantifying reserve levels and production potential of a newly discovered petroleum and/or gas) reservoir, usually by drilling one or more delineation or appraisal wells 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 great 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 Synthesi Flammability Limits The minimum and maximum percentages of gas in air within which the gas will ignite. For natur 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 \ 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 (a 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 ena 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 its obligations because of major events outside its control. Force 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 iater date, not under a long te contract. See Futures. Free on Board (FOB) Term used in LNG contracts. See Delivered.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 a pre-arranged date, The contract is usually of standard form and can itself be traded at an exchange such as NYME or the IPE. Gas:Oil Ratio: The gas:oil ratio is the relationship between the volume of gas produced at atmospheric pressure anc the volume of oil produced in a given field. This volume will normally vary considerably over the life of the field. May E 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 decisic for Great Britain's gas and electricity regulation. Day to day management of policy, resources and operational issues carried out by the Office of Gas and Electricity Markets (OFGEM). Gas Cap Ina field where oil is saturated with gas, so that it can dissolve no more, some gas will collect at the top of t 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 treated as Non Associated Gas, Unike 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 o 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, flare 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 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 z 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 age 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 major transportation pipeline. Sometimes builGas Holder Over ground structure used to hold gas for within-day Peak Shaving purposes in urban areas, Gas hole are relics of the manufactured gas era and are steadily disappearing, their function being largely usurped by Line Pa 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 ga, 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, usit 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. 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 grec field, without existing infrastructure, Grid Alternative name for Network. See Reticulation. Gross Calorific Value (GCV) The heat generated by the complete combustion of a uni 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 Valie (HH\/\ Saa alsa Net Calarifie Ve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 Intent (Mol). Heel LNG LNG left in ship and shore storage tanks to maintain their cryogenic temperatures. Henry Hub Henry Hub is the largest centralized point for natural gas spot and futures trading in the United States, TL New York Mercantile Exchange (NYMEX) uses Henry Hub as the notional point of delivery for its natural gas future: contract. NYMEX deliveries at Henry Hub are treated in the same way as cash-market transactions. Many natural ga: marketers also use Henry Hub as their physical contract delivery point or their price benchmark for spot trades of nat gas. Henry Hub is owned and operated by Sabine Pipe Line, LLC, which is a wholly owned subsidiary of ChevronTex 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 strea after separation. Boils at -69°C. 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-cil 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 Fue! 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 trading can be exploited. There are many hubs ir the U.S., of which the most important is Henry Hub. In Europe the largest hub is the National Balancing Point in th UK.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 solic liquids and gases, IEA international Energy Agency. IGU Intemational Gas Union. Impurities At the wellhead, natural gas will probably contain methane and various heavier fractions. It may also cont, a number of non-hydrocarbons, some or all of which will need to be removed, There may also be substances introdu into the well as a result of drilling operations, such as inhibitors, mud ete, The principal harmful impurities in the gas i! 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 buitt of aluminium. Hydrogen Suiph is also extremely toxic, Excessive water vapour can lead to the formation of acids and Hydrates. Some impurities, su 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 gat and mean that pipeline capacity is being wasted. Whether or not 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 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 itseff, An autonomous wing of the Organisation for Economic Co-operation and Development (OECD). International Gas Union The International Gas Union (IU) was founded in 1931. A worldwide non-profit organisati 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. Intemational Petroleum Exchange The IPEis an energy futures and options exchange based in London, Gasoil fut have been traded since 1981, Brent crude futures from 1988, and natural gas futures since 1997, Absorbed into ICE InterContinental Exchange in 2005. See also New York Mercantile Exchange.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 ar equal or pro rata responsibilty. It means that if one buyer defaults on its liabilities the other buyers will be liable to ma 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 emiss 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 auite the reverse. Liberalisation is the process of freeing a market from what are perceived as undue monopolistic forces, to achieve which a high degree c regulation may be required, at least in early years 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 | local distribution companies and intrastate pipelines in the US and is analogous to but not identical with Negotiated Access. See also Common Carriag Limited ty A provision in very large gas contracts under which limits are set to the amounts payable by a defaulting party in a contract.some areas, where there is a particularly high peak demand, a series of additional pipeline loops may be laid near th eniry to a network to provide additional line pack. Such systems are effectively a modern version of the traditional Ga Holder. Liquefaction The conversion of natural gas into LNG. Liquefied Natural Gas See LNG. Liquid Market A trading market characterised by the abilty to buy and sell with relative ease, usually because there 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 Bo Gas. Not to be confused with LNG. LNG (Liquefied Natural Gas) LNG is Natural Gas which has been cooled to a temperature, around the boiling poin methane (-162°C), at which it lquefies, thus reducing its volume by a factor of around 600, The exact boiling of any g 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 Shavin when required. LNG Plants consist of one or more LNG Trains, each of which is an independent gas liquefaction unit, is more cost effective to add a train to an existing LNG plant, than to build a new LNG plant, because infrastructure b for early trains, such as ship terminals and other utilities, may be capable of being used or expanded for new LNG tre The term Train is sometimes extended loosely to embrace the relevant shipping, storage and other facilities required 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 transporte is by sea, in specially designed insulated LNG vessels and delivered to LNG terminals, which have the requisite facili 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 (Liqu ied Natural Gas)Load Factor A measure of utilization for plant, or of the relationship between average and peak demand or supply, € determined by the formula: Average x 100 / Peak. For supply and demand calculations average and peak most often refer to daily demand within a year, but any other periods are possible. The resulting figure is usually expressed as a percentage but, where the period covered is a year, the percentage is sometimes multiplied by 8760, so that the loac factor is expressed as a number of hours. Thus a 50% Load Factor can also be expressed as 4380 hours, See also Swing. Local Distribution Company (LDC) A company that distributes natural gas primarily to small, residential and indust end-users, LOI Letter of Intent. See Memorandum of Intent. Looping Increasing the capacity of a pipeline system, by adding parallel piping along part or whole of the route. Doe not apply to the adition of compression facilities. Lower Heating Value (LHV) Alternative name for Net Calorific Value. Lower Calorific Value (LCV) Alternative name for Net Calorific Value. Low Sulphur Fuel Oil (LSFO) Fuel oil with a low sulphur content. Usually less dense than High Sulphur Fuel Oil. | new markets with gas-to-oil competition this often represents the marker fuel for large segments of the industrial mar LPG Liquefied Petroleum Gas. Madrid Forum The Madrid Fotum, otherwise known as the European Gas Regulatory Forum, set up to discuss issue 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 Annu 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 Gas to which itis 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 hav 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.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 Di late Synthes: Memorandum of Intent (MOI) Also known as Confirmation of Intent and Letter of Intent. A half way house to the sig of a full contract. Its legal status is rather unclear and its value lies largely in how it is viewed by the parties concernec will normally be a fairly brief document setting out the principal framework of the contract and specifying a date by wt itis 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 Understandin (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 Carria Meter Measuring devise, usually located at a point where ownership is transferred, for example at the entry toa customer's premises, city gate, national border or gas processing plant. Note that to determine the energy content of 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 mete! measuring gas throughput using a rotor which is made to revolve by the gas flowing through them; Ultrasound meter more sophisticated, based on the principle that sound waves travel faster with than against the flow. By measuring th difference in travelling time between the two sets of measurements the gas flow rate can be measured to an accurac, more than 0.5%; Orifice plate meters, older, and less accurate than other meters. Calculate flow rates by measuring 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 in non technical usage). Methane is the first member in the alkane (paraffin) series and is the chief constituent of Natural Gas. At atmospheric pressure, it iquefies at -162°C. Methanol Methy! 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 possi total or partial substitute for motor gasoline in cars. Very toxic.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 th 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 quailty, 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 dispo separately. Within defined limits ethane, propane and butane may be left in the gas to enrich the Calorific Value. Whether to extract them or not is largely a commercial decision. Heavier fractions which are liquids at normal temperatures and pressures will be removed, The terms Natural Gas Liquids and Condensates are in practice used Virtually interchangeably. Rather confusingly, there is no agreement on whether the term NGLs includes or excludes LPGs and both usages are current. Natural Gas Vehicle (NGV) A motorised vehicle powered by natural gas. See Compressed Natural Gas. Natural Gasoline Butanes and heavier fractions extracted from rich natural gas which, after stabilisation (removal of lighter fractions) may be blended into motor gasoline. NBP National Balancing Point. NCV Net Calorific Value. Negotiated Access Negotiated Access is a restricted form of Third Party Access, which excludes the requirement fo the access terms to be transparent or applied equally to all applicants. It has been proposed in the European Union z compromise by opponents of Open Access. Sometimes abbreviated to nTPA. Broadly defines access by one party to another party's facilities through negotiation, the result of which is, by implication, confidential, and not necessarily consistent with negotiations between the faciity owner and other parties. See also Access, and Limited Access. Net Calorific Value, (NCV) The heat generated by the complete combustion of a unit volume of gas in oxygen, excluding the heat which would be recovered by condensing the water vapour formed. Net Calorific Value is usually s as a measure of the effective heat produced rather than the total heat in the gas. Also known as Lower Calorific Valu Lower Heating Value, For natural gas, typically 10% lower than the GHV or HHV. See also Gross Calorific Value.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 t 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 aneing. ITPA Negotiated Third Party Access, See Negotiated Access. NYMEX New York Mercantile Exchange. OCM On the day Commodity Market. Odorants Strong smelling chemicals injected into natural gas, which otherwise is odourless, in order to make its, presence more easily detectable. See Mercaptans. Odorisation The process of giving odourless natural gas a smell for safety reasons by injecting small quantities of organic sulphur compounds, such as Mercaptans, typically at the rate of 30 ppm. Usually carried out at the city gate at the exit from the high pressure transmission system,Offtake Point The point in a gas system where gas is taken by supply pipe to a consumer. OFGAS Office of Gas and Electricity Markets (OFGEM). Oil Gasification The conversion of oil or naphtha into gas to be used as a fuel, See also Manufactured Gas. On the day Commodity Market (QCM) System of within-day gas trading introduced into Great Britain in 1999. A screen-based system designed to allow shippers, traders and the system operator (then Transco, now National Grid) resolve within-day demand and supply imbalances in an orderly fashion. Open Access A system offering all applicants access to specified infrastructure. See Common Carriage. 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 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 Amer 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 projec 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. 1g (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 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 ga: Peak Hour The hour in the day in which demand for gas is highest. Chiefly relevant to distribution systems, Is norma around the midday or evening meal time Peak Load The maximum load produced or consumed by a unit in a stated period of tir important component of the tariff design, since it defines the capacity that is booked be paid whether or not used 1e. In some tariff systems it i the gas delivery system and rr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 Poros Gas will low more easily than oil, and so can be recovered from rocks with lower permeability. Permeability is measu in Darcies, Gas reservoirs may have permeabilities of only a few milidarcies. Petrochemical An intermediate chemical derived from petroleum, hydrocarbon liquids, or natural gas, such as ethyle propylene, benzene, toluene, and xylene. Petroleum The general name for Hydrocarbons, including Crude Oil, Natural Gas and NGLs. The name is derivec 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 gas pipeline. It is inserted into the pipeline and carried along by the flow of oll 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 Capa 'y 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 volumes increase and, in the case of a Depletion Contract will be followed by a period of deciine 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 minere 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 belween a power station and the electricity purchasing organisation f: the sale of electricity. Primary Energy The gross amount of energy used, measured in the quantities of the original fuel produced (e.g. cru 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.Profit Gas Frequently used to signify the gas received by a Contractor in a Production Sharing Agreement to pro 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 the host government in agreed proportions. In some countries profit ge also subject to income tax, in other jurisdictions the State Oil Company is assumed to pay the income tax liability of th contractor. The proportion of profit gas is adjusted depending on local practice. May be used to signify the totaity of ¢ 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 repayn 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, ¢ abbreviated to C3 in non technical usage). A frequent component of natural gas, also sold as a form of Bottled Gas. Liquefies at -42°C. 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 reservoi! and under current economic conditions, operating methods, and government regulations. Proven (proved) reserves « be categorised as 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 abbreviatec P90. Reserves with a greater than 50% chance but less than 30% 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 prove 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 h 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” becau: there is no route to market. Different countries have adopted many different definitions of reserves, but gas contracts often refer to the Society of Petroleum Engineers (SPE) definitions. These and similar definitions from the World Petroleum Council were harmonised in 1997. PSA Production Sharing Agreement. PSC Production Sharing Contract. See Production Sharing Agreement. Public Service Obligation A Public Service Obligation (PSO) is a requirement imposed by government on a compar or companies to provide services which might not otherwise be profitable but are judged to be in the public interest. These could, for instance, include supplying gas to small or poor consumers, ensuring that appliances and other infrastructure is operating efficiently and safely, and ensuring that there are sufficient back-up gas supplies to cover emergency interruptions in supply. Public Utility Commission (PUC) State commissions in the USA responsible for regulating gas, and other utilties th operate within the boundaries of the state. See Regulation.Raw Natural Gas Natural gas still containing impurities and unwanted substances, such as water, nitrogen, carbon dioxide, hydrogen sulphide gas and helium. See also Impurities, Treatment. Recovery Factor The percentage of gas or oil in place in the reservoir which can be economically recovered. Gas Recovery factors may be around 60-70% in reservoirs with water drive from an Aquifer and up to 90% in Depletion Drive Reservoirs. 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 acc 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 enter, 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 t 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 operat - or legal ~ policing legislation, Regulators are normally closely involved in the setting up of liberalised market system when they may use their central position to interpret and rule on the applicability of legislation either ex-ante or ex-po See Common Carriage. Renewable Energy An energy form, the supply of which is partly or wholly regenerated in the course of the annual s cycle, Thus solar and wind energy, hydropower and fuels of vegetable origin are regarded as renewable; mineral fue 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 itis the lightest, oil the middle section, while water occupies the lower 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 1