Absolute Pressure
Gauge pressure plus barometric or atmospheric pressure. Absolute pressure can be zero only in a perfect vacuum. See PSIA – Pressure, Absolute. [2]

The ability of liquids to absorb water and other fluids, including unwanted gasses in natural gas processing.

AECO is the Alberta natural gas price which is quoted in gigajoules (GJ) and traded on the Natural Gas Exchange (NGX).

Atmospheric Pressure (ATM)
The pressure due to the weight of the atmosphere (air and water vapor) on the earth’s surface. The average atmospheric pressure at sea level has been defined as 14.696 pounds per square inch absolute – see PSIA. [2]

The purchase of an asset and subsequent resale at a higher price, usually in a different market. For LNG, arbitrage can occur if the price difference between two markets, such as North America and Asia, more than compensates for the extra transportation cost of moving lower-priced LNG to the higher-priced market. [3]

Associated gas
Natural gas produced in association with crude oil. [3]

The process in which LNG is kept at its boiling point, so that any added heat is countered by energy lost from boil-off. [2]

Billion Cubic Feet (BCF)
A unit of gas measurement approximately equal to one trillion (1,000,000,000,000) Btu’s. [2]

A small amount of LNG evaporates from the tank during storage, cooling the tank and keeping the pressure inside the tank constant and the LNG at it’s boiling point. Rise in temperature is countered by LNG being vented from the storage tank. [2]

Boil-off gas
Liquefied natural gas that revaporizes in the LNG facility’s storage tanks or the storages tanks on an LNG carrier during voyage. [3]

Boiling point
The temperature above which a liquid becomes a vapor, and below which a vapor becomes a liquid. For example, the boiling point of water is 100º C at atmospheric pressure. For methane, the boiling point is minus -162º C at atmospheric pressure— the temperature at or below which it is LNG. [3]

A project built on a previously developed or partly developed site. For LNG, brownfield projects would include expansions of capacity at existing LNG plants, and adding liquefaction and export services to an LNG import terminal. These sites might already have in place utilities, pipeline connections, LNG carrier berths and storage tanks, for example. [3]

British thermal unit: The Btu is the standard unit of measurement for heat. A Btu is defined as the amount of energy needed to raise the temperature of one pound of water one degree Fahrenheit from 58.5 to 59.5 degrees under standard pressure of 30 inches of mercury. Often expressed as MBtu (1000 Btu) or MMBtu (1,000,000 Btu). 1 MMBtu is equivalent to 293 KWh. [2]

A component of natural gas consisting of four carbon atoms and 10 hydrogen atoms; condenses into a liquid at relatively low temperature and pressure. Butane is often abbreviated as C4 in non-technical usage.[ [1]

Carbon dioxide
A non-toxic gas produced from decaying materials, respiration of plant and animal life, and combustion of organic matter, including fossil fuels. [1]

City gate
A transition point in a natural gas transportation network where a local gas distribution company takes title to the gas. [3]

Combined-cycle gas plant
A power plant that uses natural gas turbines to generate electricity and uses exhaust heat from the gas turbines to make steam that generates more electricity via a steam turbine. The higher efficiency of these plants compared to straight coal or gas-fired generation has helped natural gas catch on as a power plant fuel in recent years. [3]

Compressed Natural Gas – CNG
Natural gas in its gaseous state that has been compressed. [2]

Compressor station
A facility that pressurizes natural gas to provide the energy the gas needs to move through a pipeline to its next destination, such as another compressor station. Compression also allows the pipeline operator to put more gas into the line. [3]

Natural gas is compressed during transportation and storage. The standard pressure that gas volumes are measured at is 14.7 Pounds per Square inch (psi). When being transported through pipelines, and when being stored, gas is compressed to save space. [2]

Condensate is a natural gas liquid with a low vapour pressure and will separate naturally in a pipeline or separation plant through the normal process of condensation. It can refer to any mixture of relatively light hydrocarbons (such pentane) which remain liquid at normal temperature and pressure.

Conventional gas
A gas reservoir that is easier to produce than “unconventional” shale gas or coal-bed methane. The gas has migrated from its source rock and is trapped in abundance below a sealing strata of rock. It can flow under pressure relatively easily to a well drilled into the reservoir. [3]

Cost, insurance and freight (CIF)
A sales-contract term meaning that the LNG sales price covers the cost of natural gas, insurance and shipping to its destination. See also delivered ex-ship and free on board. [3]

Cryogenic Liquid or Cryogens
Cryogenic liquids are liquefied gases that are kept in their liquid state at very low temperatures and have a normal boiling point below -150º C. All cryogenic liquids are gases at normal temperatures and pressures. These liquids include methane, oxygen, nitrogen, helium and hydrogen. Cryogens normally are stored at low pressures. [2]

Cubic Foot (Cf)
A unit of measurement for volume. It represents an area one foot long, by one foot wide, by one foot deep. Natural gas is measured in cubic feet, but the measurements are usually expressed in terms of Mcf, MMcf, Bcf, Tcf, or Quads. [2]

Cubic meter (m3) of LNG
The capacities of LNG carriers and storage tanks are reported in terms of liquid cubic meters. One liquid cubic meter of LNG equals about 585 cubic meters of vaporous gas, or about 20,600 cubic feet of vaporous gas. An average-sized LNG carrier in international trade has a capacity of about 150,000 cubic meters of LNG, the equivalent of about 3 billion cubic feet of vaporous gas. [3]

Deliverability Rate
A measure of the amount of gas that can be delivered (withdrawn) from a storage facility on a daily basis, typically expressed in terms of millions of cubic feet per day (MMcf/day). [2]

Delivered ex ship (DES)
A legal term in older sales and some newer contracts meaning the seller will be responsible for the LNG until it is delivered to a specified port. The International Chamber of Commerce now recommends using the alternative terms of “delivered at place” or “delivered at terminal.” See also cost, insurance and freight. [3]

Delivered at place (DAP)
A sales-contract term meaning that the seller’s LNG price includes delivery to a named place but not the unloading and import-clearance costs, such as taxes. See delivered at terminal and delivered ex ship. [3]

Delivered at terminal (DAT)
A sales-contract term meaning that the seller’s LNG price includes delivery to and unloading at a named terminal but not the import-clearance costs, such as taxes. See delivered at place and delivered ex ship. [3]

Destination clause
A legal agreement between an LNG seller and buyer that requires the cargo to be delivered to a specified destination. This protects both the seller and buyer. The seller is assured the buyer won’t reroute the LNG shipment to a high-priced destination where the gas could compete with other shipments from the seller. The buyer is assured the seller won’t reroute deliveries to another customer. [3]

The activities in the gas value chain closest to final customers. [1]

Dry gas
Natural gas either lacking gas liquids, water and inert components such as carbon dioxide, or for which the liquids, water and inerts have been removed. In North America, pipeline gas is dry gas. [3]

Engineering, procurement and construction (EPC)
An agreement between a developer and a contractor that covers work through construction. Separate EPC contracts might cover different parts of an LNG project, such as one for the pipeline and for a separate one for the LNG plant. [3]

A component of natural gas consisting of two carbon atoms and six hydrogen atoms, condenses into a liquid at relatively low temperature and pressure. Ethane is often abbreviated as C2 in non-technical usage.[1]

Ex ship
A contract term signifying that the selling price includes all charges incurred up to the point of delivery to the buyer’s import terminal. Similar but not identical to cost, insurance and freight. [3]

Feedstock gas, or feed gas
Gas that is used as the raw material for a liquefied natural gas plant or for a petrochemical plant. [3]

Final investment decision (FID)
A decision by an LNG project developer to go ahead and build the project. This step typically occurs after FEED is finalized, financing has been arranged and long-term buyers for most of the LNG volumes have been secured. [3]

Floating LNG (FLNG)
A form of LNG production where the LNG export facility is offshore rather than onshore. This is a new production concept and technology, tried for the first time in the 2010s. FLNG is aimed at bringing to market natural gas reservoirs stranded far from shore that otherwise would go undeveloped, as well as at simplifying environmental and other permitting for a project by moving production offshore. The FLNG vessel treats, liquefies, and stores the gas, eventually loading it aboard carriers for delivery to customers.

Floating storage and regasification unit
An LNG receiving terminal located offshore — typically close to shore. The LNG is received, stored and warmed back into a vapor then piped ashore. Sometimes FSRUs can be less expensive to build and faster to permit than an onshore LNG receiving terminal. [3]

Free on board (FOB)
An LNG sales and purchase contract term that says the buyer acquires the gas at the LNG plant and is responsible for shipping. [3]

Front-end engineering and design (FEED)
The stage where significant engineering work is done so that a project is adequately defined to allow a project developer to make a final investment decision. FEED precedes the EPC phase (see above).

Fuel gas
Gaseous fuels, in particular low pressure natural gas used to fuel production or treatment facilities.

Gas cap
A layer of gas that lies above and pressurizes the oil zone in some oil and gas reservoirs. In such reservoirs, the oil typically is produced first, and any gas that comes up the wells gets reinjected into the gas cap to bolster the reservoir’s pressure so that more oil will flow to wells. [3]

Gas cycling
A production technique for oil and gas fields in which the produced oil is marketed but the produced gas is returned underground to help pressure more oil up the wells. Cycling also is used when gas condensate is present, in order to maintain a high enough pressure to keep the condensate from becoming a liquid within the reservoir. [3]

Gas-to-liquids (GTL)
A highly technical and capital intensive operation in which methane is processed into products such as low-sulfur diesel, jet fuel and heating oil. [3]

Gas treatment plant
A plant, usually located near a gas field, that cleanses raw produced gas of water, carbon dioxide and other impurities to prepare the gas for transport to market. [3]

A project that is built on a previously undeveloped or minimally developed site. [3]

Heads of agreement (HOA)
A non-binding preliminary agreement that outlines main issues to be settled for the sale and purchase of LNG. An HOA guides both parties in negotiating a final sales and purchase agreement. [3]

Henry Hub
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.

An organic compound containing only carbon and hydrogen. Hydrocarbons often occur in petroleum products, natural gas, and coals. [2]

The tying of the contract price for a commodity, such as LNG, to the published price of another commodity or index. For LNG, the price often is linked to a certain percentage of the prevailing crude oil price, such as the Japan customs-cleared crude or the price of an oil product. [3]

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 opposite of Rich Gas.

The process by which natural gas is converted into liquid natural gas. [2]

Liquid Market
A trading market characterized by the ability to buy and sell with relative ease, usually because there are numerous buyers and sellers.

Liquefied Natural Gas (LNG)
Natural gas that has been cooled to -162º C and at which point it is condensed into a liquid which is colorless, odorless, non-corrosive and non-toxic. Characterized as a cryogenic liquid. LNG occupies 1/600th of its original volume and is therefore easier to transport if pipelines cannot be used.

Liquefied Petroleum Gas (LPG)
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 bottled gas. Not to be confused with LNG.

Increasing the capacity of a pipeline system, by adding parallel piping along part or whole of the route. Does not apply to the addition of compression facilities.

Maximum allowable operating pressure (MAOP)
A gas pipeline safety standard that limits the degree to which natural gas may be pressurized within the line, based on the pipe’s strength, purpose, proximity to homes and businesses, and other factors. [3]

Methane (CH4) is commonly known as natural gas. It is colorless and burns efficiently without many byproducts. Commercial natural gas has odor added as a safety measure since it is naturally odorless. Methane is often abbreviated as C1 in non-technical usage. [2]

Primarily the processing, storage and transportation sector of the energy industry. [1]

Thousand Cubic Feet: One thousand cubic feet. One mcf equals the heating value of 1,000,000 Btu (MMbtu). [2]

One million Btu. [2]

One million cubic feet. [2]

Million tonnes per annum – one tonne (or metric ton) is approximately 2.47 cubic meter of LNG. [2]

Natural gas
Gaseous petroleum consisting primarily of methane with lesser amounts of (in order of abundance) ethane, propane, butane and pentane, and heavier hydrocarbons as well as non-energy components such as nitrogen, carbon dioxide, hydrogen sulphide and water. Usually obtained from underground sources, often in association with petroleum and coal deposits.

Natural gas liquids (NGLs)
Liquids obtained during production of natural gas, comprising ethane, propane, butane and heavier hydrocarbons.

National Energy Board (NEB)
The federal regulatory agency in Canada that authorizes oil, natural gas, and electricity exports; certifies interprovincial and international pipelines, and designated interprovincial and international power lines; and sets tolls and tariffs for oil and gas pipelines under federal jurisdiction. [1]

Netback value
The price of natural gas at its destination market minus the cost of transporting the gas there. For example, an LNG cargo load that sells for $15 per million Btu in Asia and that costs $4 per million Btu to treat and pipe to an LNG plant, $4 to liquefy and $2 to ship from the LNG plant carries a netback value of $5. This netback sometimes is called the “wellhead price.” [3]

Non-associated gas
Natural gas in underground reservoirs that do not contain oil. Most conventional gas production in North America involves non-associated gas — that is gas not associated with oil production. [3]

The acquisition and removal of gas from a pipeline or LNG plant. [3]

Open cycle gas turbine (OCGT)
A gas turbine, sometimes 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”.

Using sources of energy, such as natural gas from storage, to supplement the normal amounts delivered to customers during peak-use periods. Using these supplemental sources prevents pipelines from having to expand their delivery facilities just to accommodate short periods of extremely high demand. [2]

Peak-Shaving Facility
A facility which stores natural gas to be used to supplement the normal amount of gas delivered to customers during peak-use periods. [2]

Peak Use Period
The period of time when gas use on a particular system is at its maximum. This is the period when gas supply is most likely to be suspended for interruptible service customers. Distributors also employ techniques such as peak shaving to soften the impacts of high demand on the pipelines. [2]

Chemicals made from natural gas or oil. While most petroleum products are used for energy, a small percentage of gas and oil gets processed into chemicals used in making many thousands of products, from plastics to automobile parts, clothing, furniture and on and on. [3]

Petrochemicals feedstock
The raw materials derived from natural gas that the petrochemical industry uses to make its products. For example, methane can be processed to make ammonia used in fertilizers and medicines, and ethane can be processed to make polyethylene used in plastics and insulation. [3]

Pounds per Square Inch (psi)
Pressure measured with respect atmosphere pressure. This is a pressure gauge reading in which the gauge is adjusted to read zero at the surrounding atmospheric pressure. [2]

Pressure, Absolute: Gauge pressure plus barometric or atmospheric pressure. Absolute pressure can be zero only in a perfect vacuum. See Absolute Pressure. [2]

Pre-front-end engineering and design is an early stage in which the developer decides what kind of project might be undertaken and does preliminary engineering to get a sense of the project’s economics. See also front-end engineering and design. [3]

Proved reserves
The estimated quantities of natural gas or oil that geological and engineering data demonstrate with reasonable certainty to be recoverable from known reservoirs under existing economic and operating conditions. [3]

Propane (C3H8)
A component of natural gas consisting of three carbon atoms and eight hydrogen atoms, condenses into a liquid at relatively low temperature and pressure. [1]

An abbreviation for a quadrillion (1,000,000,000,000,000) Btu. For natural gas, roughly equivalent to one trillion (1,000,000,000,000) cubic feet, or 1 Tcf. [2]

Raw natural gas
A mixture containing methane plus all or some of the following: ethane, propane, butane, condensates, nitrogen, carbon dioxide, hydrogen sulphide, helium, hydrogen, water vapour and minor impurities. Raw natural gas is the gas found naturally in the reservoir prior to processing. [1]

Cooling mediums (usually fluids) used to lower the temperature of vaporous methane — through a series of cycles — until the methane temperature reaches -162º C, at which point it liquefies and becomes LNG. Many varieties of refrigerants can be used, from ethane and propane to such non-flammable refrigerants as nitrogen.

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

Volumes of hydrocarbons (measured in Bcf, Tcf or billion of barrels) that are considered to be economically recoverable using current technology. [2]

The portion of a resource, such as natural gas, that has been discovered and that is technically and economically extractable. [2]

Rich gas
Natural gas that contains more than trace amounts of such gas liquids as ethane, propane, butane and pentane. Also known as “wet gas” because of the presence of these liquids. Rich gas has a higher Btu content than dry gas. The opposite of lean gas. [3]

Wide strip of land, cleared to make way for infrastructure like transmission lines and pipelines.

Send-out capacity
The volume that an LNG plant or LNG regasification terminal can deliver over a specific period of time. See also million tonnes per annum. [3]

Ship or pay
A contract term that requires a gas shipper to pay a penalty if it fails to move the required volumes of gas down a pipeline. This ensures some cash flow for a pipeline developer that has incurred significant infrastructure costs. See also take or pay. [3]

Sour Gas
Raw natural gas with a relatively high concentration of sulphur compounds, such as hydrogen sulphide. All natural gas containing more than one per cent hydrogen sulphide is considered sour. About 30 per cent of Canada’s natural gas production is sour, most of it found in Alberta and northeastern British Columbia. [1]

Shale gas
Shale gas is natural gas that is found trapped within shale formations. Shale gas has become an increasingly important source of natural gas in North America since the start of this century, and interest has spread to potential gas shales in the rest of the world.

Storage Facilities
Facilities used for storing natural gas. These facilities are generally found as gaseous storage facilities and liquified natural gas (LNG) storage facilities. [2]

Stranded Utility
A stranded local utility system is typically very small and too far from the pipeline grid to be economically connected. [2]

Sweet Gas
Raw natural gas with a relatively low concentration of sulphur compounds, such as hydrogen sulphide. [1]

Take or pay
A common contract term between a buyer and seller of gas in which the buyer agrees to receive a certain amount of gas or pay a penalty. This protects a gas pipeline or LNG plant owner from cash flow problems after incurring significant cost in building the infrastructure. See also ship or pay. [3]

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.

Trillion Cubic Feet: A volume measurement of natural gas; approximately equivalent to one Quad. [2]

100,000 British thermal units (Btu). A common measure of gas sold to residential customers. [2]

Tight gas
Natural gas that is found in sandstone with low permeability. [1]

Unconventional gas
Natural gas that is more difficult to produce than conventional gas because it is not concentrated in discrete reservoirs but rather spread over vast areas, often in rock layers that are relatively non-porous and non-permeable so that the gas doesn’t flow to wells as freely. Shale gas and coal-bed methane are examples of unconventional gas. New technologies have been developed and refined to improve the economics of producing from unconventional plays; these include horizontal drilling to expose more of the play to an individual well and hydraulic fracturing, or fracking, to blast open the rock so that more gas flows to a well. [3]

Typically refers to exploration, development and production of oil and gas. [1]

Wet gas
See Rich Gas.


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