Glossary
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Federal Energy Regulatory Commission (FERC)

The chief energy regulatory body of the US government. Responsible for regulating LNG facilities in the US. FERC is considered an independent regulatory agency responsible primarily to Congress, but is housed in the US Department of Energy.

Feedstock gas (feedgas)

Dry gas used as raw material for LNG, petrochemicals and gas-to-liquids (GTL) plants.

Field

An area consisting of a single or multiple reservoirs all grouped on or related to the same individual geological structural feature and/or stratigraphic condition. There may be two or more reservoirs in a field that are separated vertically by intervening impervious strata, or laterally by local geologic barriers, or by both.

Field natural gas

Gas extracted from a production well prior to entering the first stage of processing, such as dehydration.

Financial-guarantee contract

A contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument.

FIP

Free in pipe. LPG is sometimes sold on this basis.

Firm energy (contract)

Energy sales guaranteed to be delivered under terms defined by contract.

Firm transportation

A fixed obligation where the transporter is obligated to provide a specified capacity without interruption.

First mate

Directly responsible for all deck operations – cargo handling and storage, deck maintenance and deck supplies; ship’s medical officer. See Crew

Fixed-price contract

Contract in which a specific price is agreed for commodities.

Flaring

Burning off unwanted gas through a steel structure known as a flare stack at a processing facility or on a rig. Usually occurs when gas produced in association with oil production cannot be easily exploited locally. More efforts are now being made to reduce flaring (a significant source of atmospheric carbon emissions globally) by using the gas for power, refining or LNG production.

Flash point

The temperature under very specific conditions at which a combustible liquid will give off sufficient vapour to form a flammable mixture with air in a standardised vessel. Related to the volatility of the liquid.

Flash vapours

Gas vapours released from a stream of natural gas liquids as a result of an increase in temperature, or a decrease in pressure.

Floating LNG (FLNG)

Refers to recently developed technology enabling LNG production to take place at sea. FLNG offers the possibility of more rapid start up than land-based plants, which may be delayed due to local political, planning and environmental processes. It is also better able to exploit small or isolated offshore gas reserves, which may be uneconomical or impractical to connect to a land-based plant. FLNG vessels can also be moved from one location to another as demand dictates. Shell is developing what is expected to be the first large-scale FLNG vessel, which is scheduled to be deployed in the Prelude field off Australia in around 2017. The vessel will produce around 3.6 m t/y of LNG and 1.3m t/y of gas condensate. 

Floating storage and regasification unit (FSRU)

An FSRU enables LNG to be converted into gaseous form before coming ashore, removing the need for a regasification facility on land. The FSRU may be on a dedicated vessel, or incorporated into the LNG carrier itself. Using an FSRU can prove a cheaper and faster way to gain access to LNG than building an onshore facility, for which approvals may take time or space may be limited. 

Force Majeure

A term commonly used in contracts to describe an event or effect that cannot be reasonably controlled. This term essentially frees one or both parties from liability of obligation when an extraordinary event or circumstance prevents one or both parties from fulfilling their contractual obligations.

Forward contract

A commitment to buy (long) or sell (short) an underlying asset at a specified date at a price (known as the exercise or forward price) specified at the origination of the contract.

Forward haul

A gas-transportation service that requires movement of gas from a point of receipt to a point of delivery such that the contractual direction of movement on the pipeline is in the same direction as the flow of the gas.

Fossil fuel

Any naturally occurring organic fuel formed in the earth’s crust, such as petroleum, coal or natural gas.

Fractionation

The process of separating a fluid mixture into its primary constituents, for example, separating a gas condensate into ethane, propane, butanes and heavier components.

Fracturing

Refers to a method used by producers to extract more gas from a well by opening up rock formations using hydraulic or explosive force. Advanced fracturing techniques are enhancing producers’ ability to find and recover natural gas, as well as extending the longevity of older wells.

Free-on-board (FOB) contract

Under an LNG FOB contract, the buyer lifts the LNG from the liquefaction plant and is responsible for transporting the LNG to the receiving terminal. The buyer is responsible for the shipping, either owning the LNG ships or chartering them from a shipowner. In a FOB contract, the seller requires assurance that the shipping protocols provide a safe and reliable off-take for the LNG to prevent disruption to the sales and purchase agreement (SPA). See Cost, insurance and freight (CIF) contract, Delivered/Ex-ship contract and Sale and purchase agreement (SPA)

Freight

Charge made for the transportation of a cargo.

Front-end engineering and design (FEED) contract

1) a legal agreement setting out the terms for all activities required to define the design of a facility to a level of definition necessary for the starting point of an Engineering, Procurement and Construction (EPC) contract. 2) Generally, the second contracting phase for the development of the export facilities in the LNG chain, which provides greater definition than the prior Conceptual design phase. In an LNG project, the most important function of the FEED contract is to provide the maximum possible definition for the work to be performed by the EPC contractor. This enables potential EPC contractors to submit bids on a lump-sum basis, with the least possibility that the contract cost will change through undefined work or through claims for unanticipated changes in the work. Clear definition of contract costs is important not only for cost control purposes, but also for purposes of project financing – LNG project lenders will normally limit their lending commitment to a specific percentage of forecast project costs, and cost overruns will have to be covered by the borrower’s equity investment. 

Fuel gas

A process stream internal to a facility that is used to provide energy for operating the facility.

Fuel loss

A proportion of natural gas received by a pipeline or local distribution company that is retained to compensate for lost and unaccounted for natural gas.

Fuel-switching capability

The ability of an end-user to readily change fuel.

Full-cycle economics

Economic analysis that includes all costs of field development including seismic, lease cost and construction, drilling, completion, development and, where relevant, decommissioning and environmental restitution.

Futures

Contracts to buy or sell a commodity, such as gas, for a given price on a given date. Gas futures can usually be traded on a major exchange, such as NYMEX or ICE.