LNG
You are not buying a volume. You are buying a calculation.
Full and partial cargoes on a DES or FOB basis, sold as an energy quantity that is measured, sampled and computed at custody transfer — with the destination's calorific value band and the ship-shore compatibility settled before anyone fixes.
The desk
Three things have to line up, and only one of them is price.
LNG is the most infrastructure-bound product we handle. A cargo is not a commodity that can go anywhere — it is a specific parcel, on a specific vessel, that must be physically and contractually compatible with a specific terminal on a specific day.
So three questions come before commercial terms. Is the composition inside the receiving grid's calorific value and Wobbe band, or will it need ballasting or blending? Is the vessel compatible with the berth — manifold, mooring, cargo system, and an approved compatibility study? Is there a slot? A cargo without a berth window is a cargo without a buyer.
And then the part that surprises people coming from oil: the quantity on the invoice is not measured directly. It is computed from tank levels, a laboratory composition and a density correlation, less the gas displaced and the gas burned on the voyage. The methodology is a contract term in its own right.
Custody transfer
How the invoice quantity is actually produced.
LNG is sold in energy units, and the energy is calculated rather than metered. The reference the industry works from is the GIIGNL LNG Custody Transfer Handbook, 6th edition, May 2021 — not a standard, but the practical manual that custody transfer procedures are written against.
where V is the volume change in the ship's tanks, D the LNG density and GCV its gross calorific value — both derived from the sampled composition rather than measured on the liquid.
| Step | What happens | Where it goes wrong |
|---|---|---|
| Volume | Ship's tank levels before and after transfer, on dual gauging — typically a primary radar system and an independent secondary — corrected with calibration tables and tank temperature probes. | Gauge disagreement, trim and list corrections, and which gauge governs. Named in the procedure or argued afterwards. |
| Composition | Continuous or discontinuous sampling of the liquid, vaporised and analysed by gas chromatograph to give an average composition for the parcel. | Sampling that fractionates the sample. A badly taken LNG sample reports the light ends wrong, and everything downstream inherits the error. |
| Density | Calculated from composition. The revised Klosek-McKinley method in ISO 6578 is the preferred route. | Using a different correlation than the counterparty. It is a contract term, not a laboratory preference. |
| Calorific value | Computed from composition at agreed reference conditions — and there are several in use, from 0 °C to 25 °C. | Mismatched reference conditions. Two parties can compute correctly and disagree, because they normalised to different temperatures. This must be stated. |
| Deductions | Gas displaced back to shore during unloading, and gas consumed as fuel in the engine room, both subtracted as energy. | Whether they are deducted at all, and on whose account. Small percentages of a large number. |
Composition
Rich and lean, and the band your grid enforces.
LNG is mostly methane, but the ethane, propane and nitrogen that come with it change the calorific value and the Wobbe index — and receiving grids specify both within limits that vary by country.
| Parameter | What it does |
|---|---|
| Gross calorific value | The energy per unit. It sets the invoice and it has to sit inside the destination grid's band — a "rich" cargo, heavy in C2+, can be too energetic for a grid designed around lean supply. |
| Wobbe index | Interchangeability — whether burners tuned for one gas run correctly on another. A grid can accept a calorific value and still reject the Wobbe, because the two are not the same test. |
| Nitrogen | Inert. It lowers calorific value and Wobbe, which is why nitrogen injection is a legitimate way to bring a rich cargo into a lean grid's band. It also affects the vapour composition during a voyage. |
| Ethane, propane, butanes (C2+) | Raise calorific value and Wobbe. Valuable to a market that extracts them, awkward for a grid that cannot. |
| Heavier hydrocarbons and CO₂ | Freeze-out risk in cryogenic service. Controlled at liquefaction, but reported and checked rather than assumed. |
| Sulphur and mercury | Removed upstream of liquefaction. Mercury matters for the same reason it does in condensate — brazed aluminium in cryogenic service. |
Compatibility
The berth has a veto.
Before an LNG vessel can call at a terminal, the two have to be shown to be compatible — and the terminal, not the seller, decides. It is a documented engineering exercise, not a formality, and it takes time that has to be in the schedule.
- What gets checked
- Vessel dimensions against the berth and the dredged depth; manifold height, spacing and arm reach; mooring arrangement and fender loads; cargo pump capacity against the terminal's maximum and minimum flow; vapour return capability; and emergency shutdown and ship-shore link compatibility.
- Cargo containment
- Membrane and self-supporting spherical systems behave differently on partial fillings, sloshing and boil-off. It is relevant to partial cargoes in particular, and it is stated rather than assumed.
- Cooldown
- A warm tank cannot simply be filled. Cooldown consumes cargo and time, and who provides and pays for the cooldown volume belongs in the contract.
- Where we sit
- We do not own vessels or terminals, so we do not grant compatibility — we establish it. Where a vessel has not been approved for a berth, we will say the fixture is conditional rather than presenting it as done.
On the voyage
The cargo changes on the way.
LNG is a cryogenic liquid held at around −162 °C by insulation alone. Heat leaks in, some of the cargo boils off, and the vapour is either burned as fuel, reliquefied, or both. Three consequences follow, and all three belong in the contract.
- Quantity
- Boil-off is a real loss over a long voyage. On a DES cargo it is the seller's; on FOB it is the buyer's. Which is why the delivery basis is not a minor commercial preference.
- Composition
- Methane and nitrogen boil off preferentially, so the remaining liquid gets slightly heavier and richer as the voyage progresses. The composition at discharge is not the composition at load, and the discharge analysis is what governs.
- Heel
- The quantity deliberately retained to keep tanks cold for the return leg. Its size and whose account it is on are contract terms, and a cargo quoted without a heel position is incomplete.
- Rollover
- Where LNG of different densities is layered in a shore tank, the layers can invert suddenly and vent. A reason terminals care what they are receiving and what is already in the tank — the same commingling caution we apply to marine fuels.
Commercial
Basis, pricing and what we can actually serve.
LNG's commercial structures are heavier than the rest of our book, and the honest position is that not every enquiry is one we can fill.
| Item | Position |
|---|---|
| Delivery basis | DES into a nominated terminal, or FOB at the load port. The difference decides who carries freight, boil-off, delay and the compatibility risk, so it is settled first rather than last. |
| Parcel | Full cargoes and partial cargoes. Partials bring their own constraints — sloshing limits on some containment systems, minimum flow at the berth, and a terminal's willingness to take a part cargo at all. |
| Pricing | Against JKM or TTF, or oil-indexed, with the publication, the pricing period and the settlement convention named in the contract. Not "spot". |
| Slot and window | A berth window at the receiving terminal is a precondition, not a detail. We ask whether you hold one before quoting. |
| What we will not pretend | We are not a portfolio player with optional cargoes to reallocate. Where we cannot serve an enquiry we say so at the first reply rather than working it and coming back empty. |
Scope
Where our obligation ends.
- What we do
- Source and supply LNG cargoes and partial cargoes, DES or FOB, with the composition, custody transfer methodology and compatibility position established before the fixture.
- We do not own vessels, terminals or liquefaction
- No fleet, no regasification capacity, no equity in trains. Chartered tonnage, vetted per fixture.
- We do not hold regas capacity for you
- Terminal access, slots and grid entry are the buyer's. We will tell you when an enquiry is really a capacity problem rather than a supply problem, because that is usually the more useful answer.
- We do not perform ballasting or blending
- Bringing a rich cargo into a grid's band is the terminal's operation. We identify the need; we do not undertake it.
- Small-scale and bunkering
- Where an enquiry is for LNG as a marine fuel delivered to a ship, that is a bunkering operation and not what we do — see Marine Fuels for the boundary we hold on physical delivery.
How to specify
Six lines and we can tell you whether we can serve it.
On LNG the first answer a buyer needs is often "no", and these six get to it quickly.
Terminal and berth window
Which terminal, and whether you hold a slot. Berth limits, arm reach, manifold and mooring particulars.
Calorific value and Wobbe band
The grid's accepted range, and whether the terminal can ballast with nitrogen or blend if a cargo sits outside it.
Delivery basis
DES or FOB. This decides freight, boil-off, delay risk and who carries compatibility.
Parcel size
Full or partial, and the quantity in energy units rather than cubic metres.
Pricing reference
JKM, TTF or oil-indexed; publication, pricing period and settlement convention.
Custody transfer methodology
Which gauges govern, the density correlation, the calorific value reference conditions, and the treatment of displaced gas and engine-room fuel.
Documentation
What travels with a cargo.
Independent surveyors attend custody transfer at both ends, appointed for the cargo and instructed jointly, working to the procedure the contract names rather than to each terminal's habit.
- Certificate of Quality
- Full composition by gas chromatography, gross calorific value and Wobbe index at the stated reference conditions, nitrogen, C2+, and the trace parameters the destination requires.
- Custody transfer documents
- Tank gauge records before and after, temperature and pressure logs, the density and energy calculation with its inputs shown, and the displaced-gas and engine-room fuel deductions.
- Certificate of Quantity
- In energy units, with the calculation attached rather than only the result — so it can be recomputed and, if necessary, disputed on the arithmetic.
- Operational set
- Bill of lading, notice of readiness, statement of facts, time sheet, ship-shore compatibility confirmation, and any letters of protest issued and answered.
- Origin
- Screened per consignment on the same basis as the rest of the book — see Compliance.
Straight answer
What we will tell you before you ask.
- That the quantity is a calculation, and you should be able to redo it
- We hand over the inputs, not just the energy figure. If the reference conditions or the density correlation are not named in the contract, two correct calculations can disagree.
- That "LNG" is not a specification
- A rich cargo can be outside your grid's Wobbe band while being perfectly normal at its origin. We check your band before quoting.
- That the composition at discharge is not the composition at load
- Boil-off is selective, so the liquid gets richer on the voyage. The discharge analysis governs, and the delivery basis decides whose loss the boil-off is.
- That a cargo without a berth window is not a cargo
- We will ask about your slot in the first exchange. It is the fastest way to a useful answer, including when the answer is no.
- That we are not a portfolio player
- No fleet, no terminals, no optional cargoes to divert. Where we cannot serve you we say so immediately rather than after two weeks of work.
Enquiries
Every enquiry is answered by the desk that handles it.
Send the product, quantity, delivery basis, destination and timing. We revert with availability, an indication and the documentation that accompanies it. Specifications are released once we know who we are speaking with.