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

P&I (shipping)

Protection and indemnity insurance.

Peak-day send-out

The largest volume of natural gas delivered on any one day during the year.

Peak-shaving (or peak-lopping)

The process of drawing gas during peak-use periods from storage or peak-load plants to supplement the normal amounts delivered to customers.

Petrochemicals feedstock

Feedstock derived from petroleum, used to manufacture chemicals, synthetic rubber, and plastics.

Physical contract

A natural gas contract where delivery and receipt are expected.

Pipeline constrained

A condition in which the capacity of gas pipelines is less than the demand for throughput.

Pipeline interconnection

A point at which facilities of two or more pipelines interconnect.

Pipeline-quality natural gas

Natural gas that meets the specifications of a pipeline.

Pipeline

A tube for the transportation of crude oil or natural gas between two points, either offshore or onshore.

Postage-stamp rate

Transportation rate for a given area (can be a large part of a pipeline’s system) that does not vary according to distance from the source of supply. Typically, postage stamps for letters are at a fixed price, regardless of destination.

Pounds per square inch absolute (psia)

The total pressure in a system including atmospheric pressure.

Pounds per square inch gauge (psig)

The pressure measured by a pressure gauge. The following formula is used to convert gauge pressure to absolute pressure:

P(psia) = P(psig) + atmospheric pressure.

Price indexation

A practice whereby a contract price is linked to another, generally more liquid or less complex product price or economic indicator. This allows the resulting price to vary in accordance with another factor. Gas contract prices are often linked to major crude oil indices, derivative prices, such as certain fuel oil prices, or, less frequently, energy or economic growth indicators, such as a country’s GDP.

Production costs (lifting costs)

Costs incurred to operate and maintain oil or gas wells and related equipment and facilities, including depreciation and applicable operating costs of support equipment and facilities and other costs of operating and maintaining those wells and related equipment and facilities. They become part of the cost of oil and gas produced.

Production-sharing contract (PSC)

Contract between a government and a company, granting the company a contractual right to explore and produce hydrocarbons in a specified area in enabling the company to recover its costs and a certain profit.

Project financing

Most commonly used method to finance construction of industrial infrastructure, because of the non-recourse (to project sponsors) nature of the debt financing supporting the project. Typically, the developer pledges the value of the plant and part or all of its expected revenues as collateral to secure financing from private lenders. In the event of financial distress, the debt holders have recourse only to the project assets in place at that time.

Project-financed pipeline

Pipeline funded by pledging only cash flow generated by the pipeline’s expected revenues to cover the principal and interest on the debt.