RBAC’s Energy Industry Glossary

Backhaul: The delivery by a pipeline of gas upstream from its point of receipt.  While all of the gas traditionally physically flows downstream, the effect of the transaction is to bring the downstream producer’s gas back upstream.

Base Case: A Base Case is a periodically updated base forecast produced by RBAC’s experienced staff of expert researchers and energy industry veterans.  See GPCM Base Case for more information.

Butane: A natural gas liquid, the chemical formula of which is C4H10, used primarily in crude oil and gasoline blending or in the production of iso-octane, an octane enhancer.

Chromatograph: An analytical instrument which separates mixtures of substances into identifiable components.

Coal Bed Methane: Coalbed methane, coalbed gas, coal seam gas (CSG), or coal-mine methane (CMM) is a form of natural gas extracted from coal beds.

Condensate: A hydrocarbon liquid separated from natural gas consisting mostly of pentanes plus.

Conway, KS: A major natural gas liquids trading and operating center in the US Midwest.

Cryogenic Plant: A gas processing plant that is capable of producing natural gas liquid products including ethane, at a very low operating temperature.

Debutanizer: A fractionating column in a gas plant in which butane and lighter components are removed.

Deethanizer: A unit of equipment for separating ethane, with or without lighter components.

Dehydrator: A unit which dries the incoming gas stream by removing any entrained water.

Demethanizer: A unit of equipment for separating methane and more volatile components, as demethanizer overhead from a mixture of hydrocarbons, and leaving a bottoms product which is essentially methane free.

Dense Phase Gas: Natural gas delivered on a pipeline that is in a dense phase, which means that the natural gas mixture is somewhere between a liquid and a vapor. Some pipeline systems compress liquids rich natural gas at high-pressure. The unique ability to increase compression of the rich gas creates a “dense gas”, allowing producers to ship more of the energy they produce per unit cost.

Depropanizer: A unit of equipment for separating propane and lighter components.

Displacement: 1. In pipeline transportation, the substitution of a source of natural gas at one point for another source of natural gas at another point. Through displacement, natural gas can be transported by backhaul or exchange.  2. In natural gas marketing, the substitution of natural gas from one supplier of a customer with natural gas from another competing supplier.

Distillation: The process of separating two or more components by vaporization and condensation.

Edmonton-Trading Hub: A major natural gas liquids trading and operating center in Alberta, Canada.

EP-Mix (Ethane-Propane Mix): A product consisting of a mixture of essentially ethane and propane.

Ethane: Ethane is a natural gas liquid with chemical formula C2H6. Ethane is isolated on an industrial scale from natural gas, and as a byproduct of petroleum refining. Its chief use is as a petrochemical feedstock for ethylene production.

Ethane Plus: A mixture of hydrocarbons that contain ethane, propane, butanes and pentanes plus. (C2+)

Ethylene: An olefinic hydrocarbon recovered from refinery processes or petrochemical processes with chemical formula C2H4. Ethylene is used as a petrochemical feedstock for numerous chemical applications and the production of consumer goods.

Firm Transportation (FT): Transportation service that is not subject to a prior claim
by another customer or class of service. It is offered to customers (shippers) under tariff
authority and associated contracts. Primary firm transportation has a higher priority than
secondary firm or interruptible transportation. This level of service requires payment of both a commodity charge (based on the volume/quantity actually transported) and a reservation charge to reserve pipeline capacity.

Force Majeure: Acts of God, strikes, lockouts, or other industrial disturbances, acts of a public enemy, wars, blockades, insurrections, riots, epidemics, landslides, lighting, earthquakes, fires, storms, storm warnings, floods, washouts, arrests, and restraints of governments and people, present or future, valid orders, decisions or rulings of any governmental authority having jurisdiction, civil disturbances, explosions, breakage or accident to machinery or lines of pipe, freezing of wells or lines of pipe, and any other cause, whether of the kind herein enumerated or otherwise, not within the control of the Company which, by the exercise of due diligence, Company is unable to prevent or overcome. The settlement of strikes or lockouts shall be entirely within the discretion of the Company and the above requirement that any inability to carry out obligations hereunder due to force majeure shall be remedied with all reasonable dispatch shall not require the settlement of strikes or lockouts by conceding to the demand of the opposing party when such course is inadvisable in the discretion of the Company.

Frac Spread: Difference in value of NGLs (ethane, propane, butanes and pentanes plus) as pure liquid and as a fuel in natural gas.

Fractionation: The recovered NGL stream is processes through a fractionation train consisting of three distillation towers in a series: a deethanizer, a depropanizer and a debutanizer. The overhead product from the deethanizer is ethane and the bottoms are fed to the depropanizer. The overhead product from the depropanizer is propane and the bottoms are fed to the debutanizer. The overhead product from the debutanizer is a mixture of normal and iso-butane, and the bottoms product is a C5+ mixture.

Gathering Systems: A series of pipelines that aggregate and deliver various types of products from the production area to a storage terminal or a processing facility.

GPCM®: GPCM stands for “Gas Pipeline Competition Model”. It was initially designed to forecast market shares among pipelines. Since then, GPCM has been expanded to include all sectors in the natural gas market. Hence, it is now called the GPCM Natural Gas Market Forecasting System.  GPCM is designed to give analysts and managers a tool for forecasting natural gas production, pipeline and storage utilization, delivery and price at points throughout the North American gas market in support of better analyses and better decisions for their firms.

GPCM® Base Case: The GPCM Base Case is a quarterly updated forecast produced by RBAC’s experienced staff of expert researchers and energy industry veterans using the industry standard GPCM natural gas modeling system.  Each update incorporates explicit assumptions for future weather, economic growth, world oil price, and energy industry developments including new pipelines and storage projects and new demand centers such as natural gas vehicles, petrochemical facilities and gas-to-liquids plants.

GPCM Daily™: The GPCM Daily model is used to evaluate the capability of the North American natural gas delivery system to meet peak day loads under a variety of conditions, primarily very hot or very cold weather, and scheduled events such as discrete LNG tanker arrivals or departures and new pipeline or pipeline expansion startups.  GPCM Daily predicts the directionality and approximate magnitude of price impacts of such conditions and events.

GPCM-PMI™: RBAC’s GPCM Power Model Interface (GPCM-PMI™) has been specifically designed to minimize the effort and maximize the flexibility for interfacing GPCM to the leading North American power market models.  GPCM-PMI provides a smooth and simple way for gas price forecasts using GPCM to be fed directly into a power market model and its forecasted gas burns to be fed back to GPCM in an iterative process which leads to a consistent forecast for both the integrated gas and power market.

GPCM Viewpoints® on Natural Gas: Also known as GPCM Viewpoints®, is a “light” version of the GPCM model, which gives analysts and managers access to RBAC’s quarterly updated “base case” forecast of natural gas production, pipeline and storage utilization, delivery and price at points throughout the North American gas market in support of better analyses and better decisions for their firms.

G2M2™: RBAC’s Global Gas Market Model (G2M2™) is designed to develop forecasts and scenarios for the converging global market for natural gas. It is a complete system of interrelated models for forecasting natural gas and LNG production, transportation, storage and deliveries across the global gas market in support of high quality analyses and improved decision making.

Henry Hub: The pricing point for natural gas futures contracts traded on the New York Mercantile Exchange (NYMEX). It is a point on the natural gas pipeline system in Erath, Louisiana and is owned by Sabine Pipe Line LLC.

Hydrocarbon: A molecule that contains both carbon and hydrogen atoms.

Interruptible Transportation (IT): Gas sold to customers with a provision that permits curtailment or cessation of service at the discretion of the supplier under certain circumstances, as specified in the service contract.

Isobutane (C4H10 or IC4): Isobutane is used as a feedstock in the petrochemical industry, for example in the synthesis of isooctane.

Isomerization: A process which alters the fundamental arrangement of atoms in the molecule without adding or removing anything from the original material. For example: At the Channahon facility it is used to convert normal butane into isobutane.

Isomerization Unit: A unit in the plant that converts normal butane to isobutane.

Lean Gas: A stream of natural gas that contains very few natural gas liquids (NGLs). The residue gas remaining after the recovery of natural gas liquids in a gas processing plant.

Local Distribution Company (LDC): A company that obtains the major portion of its revenues from the operations of a retail distribution system for the delivery of electricity or gas for ultimate consumption.  LDCs can deliver to Residential, Commercial, Industrial, and/or Gas-Fired Generation end-users.

Looping: Looping is a pipeline section laid parallel to the main gas pipeline. It is connected to the line pipe constructively and technologically. It is tied-in for increasing flow efficiency of the line pipe or for reducing (decreasing) the pipeline pressure loss, as well as for spacing extension – the distance between the neighboring compressor stations and their reduction in number. The gas pipeline section with a looping has a lower flow rate of the product being conveyed via the main gas pipeline, which leads to the reduction of the total gas pressure loss for flow resistance overcoming. That is why, with original gas pressure remaining constant, an increase in the flow efficiency of a gas pipeline in general is directly related to the looping length.

Methane: Methane is a chemical compound with the molecular formula CH4. It is the simplest alkane, and the principal component of natural gas. Burning methane in the presence of oxygen produces carbon dioxide and water. The relative abundance of methane and its clean burning process makes it a very attractive fuel. However, because it is a gas at normal temperature and pressure, methane is difficult to transport from its source. In its natural gas form, it is generally transported in bulk by pipeline or LNG carriers; few countries still transport it by truck.

MMBTU: Is equal to one million BTU (British Thermal Unit). Natural gas is measured in MMBtu’s. 1 MMBtu = 28.263682 m3 of natural gas at defined temperature and pressure. 1 standard cubic foot of natural gas yields ≈ 1030 BTU (between 1010 BTU and 1070 BTU, depending on quality, when burned).

MMCF: One million cubic feet of natural gas.

Mt. Belvieu, TX: A major natural gas liquids trading and operating center in the US Gulf Coast.

Natural Gas Liquids (NGLs): Short chain, low molecular weight hydrocarbons including: ethane (C2H6), propane (C3H8), normal butane (C4H10), isobutane (C4H10), pentanes (C5H12) and higher molecule weight hydrocarbons. Often found in raw natural gas.

NGL-NA™: RBAC’s North American Natural Gas Liquids Model (NGL-NA) is designed to give analysts and managers a tool for forecasting potential impacts of various conditions and events on NGL Production, Processing, Transportation, Pricing and Demand throughout the North American gas market in support of better analyses and better decisions for their firms.

NGL-NA™ Base Case: The NGL-NA Base Case is a semi-annually updated forecast produced by RBAC’s experienced staff of expert researchers and energy industry veterans.  Each update incorporates explicit assumptions for future weather, economic growth, world oil price, and energy industry developments including new pipelines and storage projects and new demand centers such as natural gas vehicles, petrochemical facilities and gas-to-liquids plants.

Natural Gas Processing Plant: Facilities designed to recover natural gas liquids from a stream of natural gas that may or may not have passed through lease separators and/or field separation facilities. These facilities control the quality of the natural gas to be marketed.

Odorant: A highly odiferous fluid or gas, usually a light mercaptan, added to a gas or LP-gas to impart to it a distinctive odor for safety precautions and to facilitate detection of leaks.

Operational Balancing Agreement (OBA): To facilitate deliveries of natural gas and provide for operational flexibility, operational balancing agreements can be put in place with other interconnecting pipelines. These agreements ensure that the volume of gas a shipper schedules for transportation between two interconnecting pipelines equals the volume actually delivered. If natural gas moves between pipelines in volumes that are more or less than the volumes the shipper previously scheduled, a gas imbalance is created. The imbalances are settled through periodic cash payments or repaid in-kind through the receipt or delivery of natural gas in the future.

Operational Flow Order (OFO): An Operational Flow Order (OFO) notice requires shippers to balance their gas supply with their customers’ usage on a daily basis, within a specified tolerance band. Shippers may deliver additional supply or limit their supply in order to match customers’ usage. If the supply isn’t balanced, shippers may incur noncompliance charges.

Pentanes Plus: A mixture of hydrocarbons, mostly pentanes and heavier, extracted from natural gas. Includes isopentane, natural gasoline, and plant condensate.

Propane: A normal gaseous straight-chain hydrocarbon with a chemical formula of C3H8. It is a colorless paraffinic gas that boils at a temperature of -43.67 degrees Fahrenheit. It is extracted from natural gas or refinery gas streams. It is commonly used as a fuel for engines, oxy gas torches, barbeques, portable stoves and residential central heating. When used as vehicle fuel, it is commonly known as liquefied petroleum gas (LPG or LP-gas), which can be a mixture of propane along with small amounts of propylene, butane and butylene.

Propane Plus C3+: A mixture of propane, isobutane, normal butane and natural gasoline.

Reference Case: A Reference Case is an internally maintained GPCM database used by the GPCM licensee to produce their own forecasts for natural gas production, pipeline and storage utilization, delivery and price at points throughout the North American gas market.  The reference case is based on RBAC’s Base Case, but also includes the GPCM licensee’s own assumptions, which are maintained internally.

Rich Gas: Refers to a gas stream which has a high content of natural gas liquids.

Sarnia-R Trading Hub: A major natural gas liquids trading and operating center in Ontario, Canada.

Straddle Plant: A natural gas processing plant within the pipeline transmission system, at which gas is further processed (subsequent to field processing) to remove additional natural gas liquids. The term refers to the fact that the plant “straddles” the main pipeline. In Canada, most ethane is produced at straddle plants, also known as a processing plant.

Tight Sands: Unconventional natural gas that’s trapped in hard rock, sandstone or limestone formations that is impermeable and non-porous.

Turbo Expander: Also referred to as an expansion turbine, is a centrifugal or axial flow turbine through which a high pressure gas is expanded to produce work that is often used to drive a compressor.

West Texas Intermediate (“WTI”): This is a light sweet type of crude oil used as a benchmark in oil pricing and the underlying commodity of New York Mercantile Exchange’s oil futures contracts. This oil type is often referenced in North American news reports about oil prices.

Western Canadian Sedimentary Basin (“WCSB”): WCSB is one of the major gas-producing areas of North America. It supplies approximately 25% of all gas used by the US and Canada, and 98% of Canadian production.

Y-Grade: An NGL mixture of ethane, propane, butane, and condensate that has not been fractionated into saleable products.

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