energy trading systems

GasTrak

Know the name of the Energy Trading System that you are using for lab.

Houston

Know what city is considered the Energy Capital of the World.

The Federal Energy Regulatory Commission (FERC)

Know what FERC stands for.

Is an independent agency that regulates the interstate transmission of natural gas, oil, and electricity.

Know what FERC's role is in the industry.

Interstate pipelines

Know what pipelines that cross state lines are called.

Also known as Horizontal Fracking

Engineer takes the gas out of rocks.

Completely changed and reconfigured the industry. This process can often allow economic gas production in formation which otherwise would not be economic to produce.

Recent innovation (2000s)

Know what Hydraulic Fracturing is and what it has meant to the Natural Gas

Industry.

Shale oil from fracking

Know what has made the United States the top oil and gas producer of the world.

America

Know what country is the largest gas producer in the world today.

1800s - Non regulated, Wild Wild West

1930s - Regulation, Overly so

1980s - De-Regulation, Kind of

2000s - Fracking, New Ball Game

2020s - LNG Market, Hello World

Know the Historical Path of the Natural Gas Industry.

1. Acquisitions(Supply):

Supply Commodity- the actual units of gas produced or purchased.

2. Logistics:

Transportation Services- Moving the gas from supply to demand

Processing Services- Making the gas market ready

Storage Service- Storing gas for peak period needs

3. Dispositions(Demand):

Demand Commodity- Actual units of gas sold or consumed

Know the three Major Gas Industry Fundamentals in the supply chain.

Logistics (transport, processes, storage)

Know which of the three Major Gas Industry Fundamentals has multiple parts.

City gates

Consumption meters

Master meters

Where is the city gate found? On the demand side

Know what terms and assets are associated with discussions of Disposition.

Local Distribution Company (LDC)

Know what LDC stands for.

Supply => actual units of gas that are processed or purchased. Supply required to meet demand

Processing => Making the gas market ready

Transport => Moving gas from supply to demand

Storage => storing for peak period needs

Demand => Actual units of gas that are sold or consumed. Driving force in any business endeavor

Know the five moving parts within the natural gas supply chain and their purposes

Gathering Pipeline Systems: Small diameter, Processing Plants, Common Point Meter

Transmission Pipeline Systems: Large diameter, Crosses state line, Long hauls

Distribution Pipeline Systems: Small diameter, End of line, End-user delivery, City Gates

Know the three Pipeline types.

Gathering Pipeline Systems: Small diameter, Processing Plants, Common Point Meter

Transmission Pipeline Systems: Large diameter, Crosses state line, Long hauls

Distribution Pipeline Systems: Small diameter, End of line, End-user delivery, City Gates

Know the characteristics of the three major Pipeline types.

Gathering and distribution bc they both have small diameters

Know which of the three have similar characteristics.

Seasonal Demand:

- Gas usage increases with the season

- For example, gas usage would increase in the winter than the summer in the north

-Most storage are located underground, commonly in depleted gas or oil reservoirs. Traditionally held in the Summer, till needed in the Winter

Peak Demand - they increase/decrease in a day.

In what area of the country would u find predominant storage -> NORTH because there's more demand

Demand = north

Supply = south

Know where the predominant number storage facilities located for meeting peak and seasonal demands.

WHAT ARE the buildings along the pipeline that propel the gas -> compressor station

Compressor Stations provide the power that drives Natural Gas to its destination. A facility that propels gas through transmission lines or into storage by increasing pressure.

Know what propels natural gas to its destination.

A device used to clean and inspect the inside of the pipeline. Pigs may be used in hydrostatic testing and pipeline drying, internal cleaning, internal coating, liquid management, batching, inspection.

Know what Pipeline Pigs are used for.

Interstate

Know what Pipelines that cross state lines are called.

Market Ready

Know what gas is called once it has been processed at a plant.

Natural Gas

Know what Compressor Stations use for fuel and what is their primary purpose.

For tomorrow

Know for what day are traders and scheduler nominating gas for in the Natural Gas Industry.

First Purchaser

Know what the State of Texas calls taxes charged on Natural Gas production.

Net Invoicing

Know the Naesb contract provision that the banking institution may not have liked. (bankers hate)

Firm/Non-firm

Know the Two Contract Types that we discuss. The industry has many, but discuss how we could group them into two.

BTU Value is determined in a laboratory based on chemical analysis.

Know at what type of facility the BTU (British Thermal Unit) factors determined.

No, the pipeline operators are not concerned with ownership of the gas.

Know whether Operational personnel are concerned with the Ownership of the gas.

Death

Know what could happen to gas customers if gas is not delivered to them during frigid weather.

Best effort

Know what type of effort is required for a Non-firm Contract.

Firm contract

Know in which type of contract will you find a Keep Whole Provision

Consumer

Know who in the end pays for all the cost incurred.

Marketers

Know who the new player at De-regulation.

Check meters

Know which type of meter is used in determining leaks.

Electric Generation Customers (Electricity)

Know who the number one consumer of gas today is.

Long term(1-3 years) and Short term (day to day/ month to month) planning models

Know the two types of planning model/types.

Base loading end of every month (last week).The period near the end of each month when the bulk of contracts for monthly gas supply for the following month are finalized.

Bid week occurs in the first week of the flow month -> false IT occurs the last week prior to the month

Know about Bid-week. When does it occur and what is its purpose?

Planning for the following day's operations/trading

Meeting held everyday -> morning meeting

Know what morning meetings are for.

MCF = one thousand cubic feet, measurement of quantity of gas

WHAT is measured in a pipeline-> MCF

BTU = British Thermal Unit, measurement of heat content of gas, i.e. how much energy it contains/provides

MMBTU = one million BTU

Know what MCF, BTU and MMBTU represent.

British Thermal Unit (BTU)

Know what BTU stands for.

MCF x BTU = MMBTU

MMBTU/BTU = MCF

Know how to determine (calculate) MMBTU given an MCF quantity and a BTU Factor.

Gas is bought and sold on quality

MMBTU=Quality

MCF=Quantity

Know the difference between the quantity and quality of gas, and what each is called.

Either measured by volume or energy content. Measured with orifice plates, measured by MCF's

Know how gas is measured in the pipeline and what quantities are called.

The safety of their customers

Know what is the main concern of the Natural Gas Industry for their customers.

Christmas tree is an assembly of valves, spools, and fittings used to regulate the flow of pipes in an oil well, gas well, etc..

Know what a Christmas Tree is in the Natural Gas Industry.

Coal

Know what hydrocarbons that are found close to the surface of the earth's surface called.

Legacy Purchase Contract

Single purpose contracts: Purchase Only

Firm Purchase Agreement: Generally longer term in nature and used as base load gas

Assures delivery on a guaranteed basis other than an Act of God

Highest performance priority

Legal Recourse is generally available for Non-Performance

Keep-Whole Provision

Non-Firm Purchase Agreement (Spot / Swing)

Generally shorter term in nature and provide greater flexibility

Assures delivery on a best efforts basis

Subject to being cut or zeroed out

No legal recourse available for Non-Performance

Non Performance resolved via penalty

GISB Purchase Contracts(1996)

Gas Industry Standards Board (GISB)

Dual purpose contracts: Purchase and Sales

Standardized the contract language

NAESB Purchase Contracts(2002)

North American Energy Standards Board

Dual purpose contracts- Purchase and Sales

Non Performance resolved via Keep-Whole Optimized Settlement Process via Net Invoicing

Know the differences between Legacy, GISB and NAESB Purchase

Contracts, and for GISB and NAESB, when they came into existence.

Commodity charge - this is an amount paid by the shipper based only on the actual capacity used on a given day

Demand charge - this is an amount, based on capacity contracted that must be paid whether the shipper used the capacity or not. this is also known as a reservation charge because it entitles the shipper to reserve space on the pipeline

Know the properties of Commodity and Demand charges.

Acquisition or supply

Know what word is most associated to Commodity.

Disposition

Know what word is most associated to Demand.

Purchase price is what the producer sells it for

Logistical price is the cost to move the gas from seller to buyer

Landed price is the sum of purchase price and logistical price

Sale price is the landed price plus profit.

Know the different prices associated with purchase, logistical, landed and sales prices.

Landed price is about cost: purchase price + logistical price

In particular know what Landed Priced is composed of.