the name given to the periodic cooling of the tropical Pacific Ocean, hence the name: it means ‘little girl’ in Spanish, the opposite of El Niño. La Niña occurs after some, but not all, El Niños. During a La Niña year, US winter temperatures are warmer than normal in the southeast and cooler than normal in the northwest.
see gearing
the amount of time specified as allowable in a shipping charter contract for loading and unloading of cargo. Demurrage is incurred if the laytime is exceeded.
see London Clearing House
see local distribution company
see local distribution zones
Liquefied natural gas (LNG) that is of a specification with very low high heating value (HHV). Lean LNG liquid stream is predominately methane with some minor quantities of ethane. Lean LNG may be required to meet fuel quality specifications and standards required by LNG-powered vehicles and other LNG-fuelled equipment. Leaner LNG can be produced through the extraction of the heaviest components, namely the LPGs, propane and butane. Rich LNG, or Hot LNG, with high HHV also produced for some market segments. see also Hot LNG
the risk that a counterparty to a transaction will not be liable to meet its obligations under law. Such difficulties may arise from a number of causes, one of the most common being that the transaction was not sufficiently well documented to be legally enforceable.
the property of a statistical distribution to have more occurrences far away from the mean than would be predicted by a normal distribution. Also referred to as ‘fat tails’.
instrument or document issued by a bank guaranteeing the payment of a customer’s drafts up to a stated amount for a specified period. It substitutes the bank’s credit for the buyer’s and eliminates the seller’s risk. see also performance letter of credit
the ability to control large amounts of an underlying variable for a small initial investment. Futures and options are leveraged products, because the initial premium paid is usually much smaller than the nominal amount of the underlying. Leverage is usually measured as the effective gearing. see also gearing
see load factor
the London Interbank Offered Rate. The rate of interest at which banks borrow funds from other banks, in marketable size, in the London interbank market.
the loading of crude oil or oil products on to a vessel.
typically crude oil with an API gravity of more than 28 degrees.
volatile hydrocarbon products, such as propane, butane, gasoline and naphtha.
the difference between the quantity of electricity generated and the quantity delivered at some point in the electricity system. Losses vary depending on temperature, voltage level and load levels.
raising the pressure within a gas pipeline system in order to increase the system’s storage capability – important for system operation.
the principle or method by which the fit of a function to data is such that the sum of the squared residuals is minimised. In linear regression, the function is a line. The sum of the squares of the residuals is used instead of the absolute values because this allows the residuals to be treated as a continuous differentiable quantity. However, because squares of the residuals are used, outlying points can have a disproportionate effect on the fit, a property that may or may not be desirable depending on the particular problem being considered.
a facility that converts natural gas from its natural gaseous state to a liquid state. The gas is first cleaned of all traces of CO2, water, mercury and sulphur. It is then cooled to -160°C in cold boxes until it becomes liquid. In this form, it is stored in tanks.
LNG is compressed natural gas (mainly methane and ethane), which (unlike liquefied petroleum gas) is reduced to a liquid form by cooling it to -258° Farenheit. The volume of LNG is 1/600th of its volume as gas vapour. It is odourless, colourless, non-toxic and non-corrosive. LNG is much easier and more cost-effective to store and to transport, especially where pipelines do not exist.
a light hydrocarbon composed mainly of propane and butane, occurring naturally in crude or from refining processes such as crude distillation, catalytic reforming or hydrocracking. Gaseous at atmospheric pressure and temperature, LPGs are liquefied by reducing temperature or increasing pressure for ease of transportation and storage.
this clause allows a counterparty that is owed power to charge the defaulting counterparty for the price of having to buy elsewhere. The higher the price, the higher the charge when a company defaults on its supply obligations.
a market is liquid when it has a high level of trading activity.
the risk that a firm unwinding a portfolio of illiquid instruments may have to sell them at less than their fair value. An illiquid market may be defined as one characterised by wide bid/ask spreads, lack of transparency and large movements in price after any sizeable deal.
H See Louisiana light sweet
see liquefied natural gas
the components in the liquefied natural gas process for transporting from producing areas to consuming regions, typically comprising stages for liquefaction, transportation and regasification.
an acronym for a liquefied natural gas regasification vessel.
the amount of power carried by a utility system or sub-system, or the amount of power consumed by an electrical device, at a specified time. Load is also referred to as demand.
the ratio between average and peak usage for electricity or gas customers. The higher the load factor, the smaller the difference between average and peak demand.
continuous balancing of generation and load accomplished by committing online generation whose output is raised or lowered as necessary to follow moment-by-moment changes in load.
a combination of electricity contracts covering a period of weeks or months, which reflects the profile of the daily power requirements of a customer or distribution of energy requirements over time. see also load shape 44
a benchmark load shape traded on the UK electricity forward market. It comprises 5 megawatts (MW) of baseload power and 5MW of additional power between 0700 hours and 1900 hours UK time on week days. see also load shape
the process of removing certain sections of customer demand from the supply system in response to a shortfall.
a company that operates or controls the retail distribution system for the delivery of natural gas or electricity.
the zones into which National Grid Transco has divided the UK for the purpose of calculating shippers’ charges for transporting gas within the national transmission system.
members of a futures exchange who trade exclusively on their own account.
the differential between the prices quoted for the same commodity at two locations.
a method of pricing the cost of congestion into electricity prices. The Federal Energy Regulatory Commission is introducing LMP under its standard market design proposals. LMP aims to encourage the efficient use of the transmission system by assigning costs to users based on the way energy is actually delivered.
a probability distribution such that the natural logarithm of the variable is normally distributed.
a member-owned clearing house that merged with Clearnet.SA to form the LCH.Clearnet Group. In October 2008, LCH.Clearnet signed a new clearing arrangement with LIFFE, the international derivatives market of NYSE Euronext (NYX).
the buyer of a financial contract.
a position that appreciates in value if the value of the underlying instrument or market price increases.
a lookback call (put) option grants the right to buy (sell) the underlying energy commodity at the lowest (highest) price reached during the life of the option. Effectively, the best price from the point of view of the holder becomes the strike price.
Louisiana Offshore Oil Port. A US deepwater port that can accommodate vessels as big as ultra-large crude carriers with a loaded weight of over 200,000 deadweight tons.
unintended flows on electricity transmission systems that occur as a by-product of the dispatch of electricity down an intended path.
the unit size for transactions on a given futures exchange.
A low viscosity (‘light’), low sulphur (‘sweet’) crude oil produced in the Gulf of Mexico.
see liquefied petroleum gas