Calendar month

The period beginning on the first gas day of the calendar month and ending on the first gas day of the next calendar month.

Calorific value

The quantity of heat produced by the complete combustion of a fuel. This can be measured dry or saturated with water vapour, net or gross. The general convention is dry and gross.


In an LNG supply agreement, this may refer to either the maximum price a buyer will have to pay for gas, or a limit on the amount of gas the buyer can take in a given period. 


Unit of volume of infrastructure and shipping, usually quoted in billions of cubic metres (cm) or millions of tonnes (t).

Capacity allocations

Allotment of space in a pipeline or regasification infrastructure.

Capacity assignment

The process by which an entity that holds the rights and obligations to pipeline capacity transfers those rights and obligations to another entity.

Capacity brokering

The assignment of rights to receive firm gas transportation service.

Capacity charge

A payment made to reserve capacity in, for example, a gas storage facility or pipeline.  

Capacity constraint

A restriction or limitation at any point along a supply system, such as a pipeline, that affects acceptance, movement or subsequent redelivery of natural gas. A company determines the sufficiency of its capacity to deliver gas to customers.

Capacity release

Enables a shipper (releasing shipper) who has reserved firm transportation capacity to release (sell) excess capacity to a replacement shipper. The revenue received from the replacement shipper can be used to offset some of the costs associated with reserving firm transportation. Although capacity-release deals can be negotiated between shippers, the preferred method of releasing capacity is with the use of a pipeline’s electronic bulletin board through a closed bidding process. Capacity release has created a secondary market and has increased efficiency in the gas transportation market. Capacity release can also occur in regasification terminals.

Capacity trading

The trading between companies of spare capacity in infrastructure, such as a gas storage facility at an LNG regasification plant or pipeline.

Capital investment

Money spent for an asset expected to produce income over its useful life.

Capital lease (finance lease)

A lease that transfers substantially all the risks and rewards incidental to ownership of an asset. Legal title of the asset may or may not eventually be transferred.

Captive customer

Buyer that can receive natural gas from only one service provider, with no access to alternate fuel sources. This usually describes a residential or small commercial user, but may also apply to a large industrial and electricity utility user that is attached to a single pipeline.


The base of all hydrocarbons; capable of combining with hydrogen in almost numberless hydrocarbon compounds. The carbon content of a hydrocarbon determines, to a degree, the hydrocarbon’s burning characteristics and qualities.

Carbon sequestration and storage (carbon capture)

The extraction and underground storage of carbon dioxide during power generation or other industrial processes, such as LNG liquefaction, to reduce carbon dioxide levels emitted into the atmosphere. 

Carbon trading

See Emissions trading

Cargo handling

The act of loading and discharging a cargo ship.

Cargo plan

A plan giving the quantities and description of the various grades carried in the ship’s cargo tanks, after the loading is completed.

Carry forward

A provision in a long-term sales contract that permits a buyer to offset any gas it takes above its Annual contract quantity against any undertake in a future year, rather than face any penalty. The opposite of Make up. 


A procedure in which shippers are allowed to resolve imbalances by cash payments, in contrast to making up imbalances with gas volumes in-kind. See Imbalance trading

Casinghead gas

Unprocessed natural gas produced from a reservoir containing oil.


A substance whose presence changes the rate of chemical reaction without itself undergoing permanent change in its composition. Catalysts may be accelerators or retarders.

Cathodic protection

A method employed to minimize the rate of electrochemical corrosion of pipelines or structures.

Celsius (C)

Temperature scale based on the freezing (0°) and boiling (100°) points of water at atmospheric pressure; formerly known as Centigrade. To convert Celsius to Fahrenheit, multiply the number by 1.8 and add 32.

Certificate of discharge

An essential document for officers and seamen; official certification confirming completion of the employment for which engaged.

Certificate of registry

A document specifying the nation registry of the vessel.

Charter party

Contractual agreement between a shipowner and a cargo owner, usually arranged by a broker, whereby a ship is chartered (hired) either for one voyage or a period of time.

Charter rates

Tariff applied for chartering tonnage in a particular trade.


The entity to whom is given the use of the whole of the carrying capacity of a ship for the transportation of cargo to a stated port for a specified time. See Time charter party

Cherry picking

Pursuing desirable customers and ignoring less desirable customers. The term is commonly used to describe a company’s tactic of trying to secure the business of the largest energy or service users.

Chief engineer

The senior engineer officer who generally oversees functioning of all mechanical equipment on ship; calculates fuel and water consumption and requirements, and co-ordinates operations with shoreside port engineer. See Crew

Chief officer

The officer next in rank to the Master. Also called First Mate, Chief mate. See Crew

Chlorofluorocarbons (CFCs)

Family of manufactured chemicals; also called chlorinated fluorocarbons.

City gas

Treated and conditioned gas for consumer use. Also known as Sales gas.

City-gate rate

The rate charged to a distribution utility by its suppliers; refers to the cost of the natural gas at the point at which the distribution utility historically takes title to the natural gas. Also called gate rate.

City-gate station (city gate)

The point or measuring station at which a gas-distribution utility physically receives gas from a pipeline or transmission company; the point at which the backbone transmission system connects to the distribution system. There is not necessarily a change of ownership at a city-gate station.

Class of service

A group of customers with similar characteristics (for example, residential, commercial, industrial) that are identified for the purpose of setting a rate for service.

Classification societies

Private organisations that arrange inspections and advise on the hull and machinery of a ship, supervise vessels during and after their construction to assess their seaworthiness, and place vessels in grades or classes according to the society’s rules for each particular type. It is not compulsory by law that a shipowner have his vessel built according to the rules of any classification society. In practice, the difficulty in securing satisfactory insurance rates for an unclassed vessel makes it a commercial obligation. The major classification societies (including American Bureau of Shipping, Lloyds Register of Shipping, Det Norske Veritas, Bureau Veritas and Germanischer Lloyd) have included the International Maritime Organisation (IMO) LNG Gas Codes in their rules. See International Maritime Organisation (IMO)

Coalbed methane (CBM)

Gas produced from reserves adsorbed within coal seams. Also known as coal seam gas. CBM is an important feedstock in Australia’s LNG export industry.  


The process of burning natural gas simultaneously with another fuel. Co-firing can reduce sulphur dioxide (SO2) and nitrogen oxides (NOx) emissions.

Cogeneration (Cogen)

The simultaneous production of electrical energy from the combustion of a single fuel source through two means gas turbines and steam turbines. See Combined-cycle gas turbine 

Combined-cycle gas turbine (CCGT)

The combination of simple gas turbines with a heat-recovery steam generator (HRSG) and a steam turbine in a power generation plant. Gas is combined with air and burned, with the expanded gas turning the blades of the gas turbines to power an electricity generator (the Brayton thermodynamic cycle). The hot exhaust gases are passed to the HRSG, in which water is converted to steam that is used in a single steam turbine to power another generator (the Rankine thermodynamic cycle). Also called combined cycle generation.

Combined heat and power (CHP)

The simultaneous generation of two forms of energy from a single fuel source. Electrical energy is produced through gas turbines and heat energy (steam) is produced through a heat-recovery steam generator. See Combined-cycle gas turbine

Commercial field

A hydrocarbons field that, under existing economic and operating conditions, is judged to be capable of generating enough revenues to exceed the costs of development.

Committed gas contract

A source-specific natural gas sales contract that commits the seller to deliver natural gas, from specific described reserves or sources.

Commodity charge

Throughput or usage charge, a fee paid to the pipeline operator, based on the number of decatherms moved by the pipeline for the shipper. At the local market it is referred to as the gas portion of the end-user’s bill – charged at the burner tip; the component of rates charged to customers that reflects the volume of gas actually transported by a utility or the cost of gas actually purchased by the utility.

Common carrier

A facility obligated by law to provide service to all potential users without discrimination, with services to be prorated among users in the event capacity is not sufficient to meet all requests. In the US, interstate oil pipelines are common carriers, but interstate natural gas pipelines are not. They are Open-access carriers.

Company-used gas

Natural gas consumed by a gas-distribution or gas-transmission company, or the gas department of a combination utility, for example, fuel for compressor stations.


The number of officers and crew employed upon a vessel for its safe navigation and operation.

Compressed natural gas (CNG)

Natural gas that has been compressed under high pressures (typically between 3,000 and 3,600 psi) and held in a container. It expands when released for use as a fuel.

Compressibility factor

The ratio of the actual volume of a gas divided by the volume that would be predicted by the ideal gas law, usually referred to as the Z factor.


The act or process of contracting a volume of gas into a smaller space.

Compression ratio

The relationship of absolute outlet pressure at a compressor to absolute inlet pressure.

Compressor station

An alternative name for a Booster station.


A mechanical device used to raise the pressure of a gas. Compressors can be of three types: axial, centrifugal, or reciprocating. The usual means of providing the required power are electrical motors, steam turbines, or gas turbines.


A license awarded by a government or state oil company allowing a company to explore for and produce hydrocarbons in an area usually covering one or more Blocks. 


A hydrocarbon liquid that forms by precipitation from a gas. When the liquid precipitates in the reservoir during pressure depletion, the liquid is referred to as retrograde condensate. Surface production of hydrocarbon liquids through primary separation facilities is referred to as condensate when it comes from a gas reservoir. Natural gas condensates consist primarily of pentanes (C5H12) and heavier components. There will be some propane and butane dissolved within the mixture.

Confirmed nomination

Verification by a pipeline company that a change in a customer’s level of transportation service will be matched by a change in supplier quantities.


The entity to which cargo is consigned as stated on the bills of lading.


The entity named in the bill of lading as the one from whom the goods have been received for shipment.


The ultimate end-user of natural gas at their burner tip as contrasted with a customer who may purchase natural gas for resale.


A market where prices are higher for forward delivery dates than for nearer-term delivery dates. The opposite of Backwardation.

Contingent asset/liability

A possible asset/liability that arises from past events and whose existence will be confirmed only by the occurrence, or non-occurrence, of one or more uncertain future events not wholly within the control of the entity.

Contract price (CP)

Price agreed between sellers and buyers.

Contract term

The term of effectiveness of a contract.

Contracted reserves

Natural gas reserves dedicated to fulfil gas contracts.

Conventional gas

1) Usually refers to gas reserves that are the easiest to access with existing technology. Most gas produced to date is conventional gas, although an increasing amount of Unconventional Gas is now also being produced; 2) The term conventional gas may also refer to naturally occurring gas to distinguish it from synthetically produced gas. 

Core customer

Buyer that can purchase natural gas from only one supplier, with no access to alternate fuel sources; usually describing a residential or small commercial user, but may apply to a large industrial and electric utility user as well. Usually pays a higher rate for assured service.

Cost of capital

The weighted average cost of financing investment projects, primarily through debt and/or equity financing.

Cost of development/boe (COD)

The unit cost ($/boe) required to develop a project. Calculated by taking the total unescalated net development investment including seismic, technical data, drilling and completion costs, and costs of incremental surface facilities divided by incremental net proved developed reserves.

Cost, insurance and freight (CIF)

Used in international trade statistics and sales contracts, transactions on CIF basis mean the purchase price includes all costs of moving the goods from the point of embarkation to their destination. With respect to LNG shipping, this means that the buyer purchases the gas at the point of vessel loading or during its transit to the receiving terminal, while the agreed price includes shipping charge and insurance for the load. See ex-Ship contract and Free on Board contract


The company of officers and personnel on board ship. Although operations are similar to other types of ships, there is more emphasis on crew training for steam turbine plant and LNG cargo handling operations, as well as planned maintenance procedures.

Critical pressure

1) for a pure component, the pressure above which separate liquid and gas phases cannot exist; 2) the vapour pressure of a substance at its critical temperature; partial liquefaction can occur below the critical pressure even at the critical temperature.

Critical temperature

For a pure component, the temperature above which a liquid phase cannot exist.


The production and application of low-temperature phenomena. The cryogenic temperature range is usually from -150°C (-238°F) to absolute zero (-273°C, or -460°F), the temperature at which molecular motion essentially ceases. A most important commercial application of cryogenic gas liquefaction techniques is the storage, transportation, and regasification of LNG.

Cubic capacity

The volumetric measurement of the ship’s cargo compartments.

Cubic feet a day (cf/d)

At standard conditions, the number of cubic feet of natural gas produced from a well over a 24-hour period, normally an average figure from a longer period of time. May be expressed as mcf/d = thousand cubic feet a day; mmcf/d = million cubic feet a day; bcf/d = billion cubic feet a day; or tcf/d = trillion cubic feet a day.

Cubic foot (cf)

The amount of gas required to fill a volume of 1 cubic foot under stated conditions of temperature, pressure and water vapour. 

Cubic metre (cm)

Unit of measurement for gas volume. The amount of gas required to fill a volume of one cubic metre.


An action by which the customer receives less than the contract quantity of natural gas or services because of a system-wide shortage.

Custody transfer measuring system (CTMS)

LNG ships are fitted with high-accuracy liquid-level, temperature and vapour-pressure measuring equipment. The cargo tanks are calibrated by an independent measurer so that the volume of cargo can be determined accurately. The CTMS is accepted by the buyer and the seller of the cargo as the basis for the quantity purchased or sold. Samples of the LNG cargo are taken ashore and analysed to determine the cargo’s chemical composition from which the heating value can be calculated. The heating value is then multiplied by the volume loaded or discharged from the ship to obtain the British thermal unit (Btu) content of the delivered cargo, which is used as the basis for cargo invoices, import duties and fiscal accounting.

Customer demand charge

The component of rates charged to customers that is expected to cover the fixed costs incurred by a pipeline. The other component of rates is the commodity charge. This charge is also referred to as a reservation charge.

Cushion gas

See Base gas

Cycle volume

Volume of natural gas that can be withdrawn from underground storage during the winter season and then be replaced during the summer season.