in a buyer’s contract, take or pay is the obligation to pay for a specified amount of gas, whether this amount is taken or not. Depending on the contract terms, under-takes or over-takes may be taken as make-up or carry-forward into the next contract period. When it is credited into another contract period, this is called make-up gas. see also make-up gas

   a crude oil produced in Malaysia and used as a reference crude for Far East light oil.

   public schedules detailing utility rates, rules, service territory and terms of service that are filed for official approval with a regulatory agency.

   technical analysis is based on the assumption that price takes into consideration all factors that could influence the price of the commodity. It is, therefore, broader than fundamental analysis, which looks at supply and demand. Past price movements can be analysed for indications of future commodity price movements. see also fundamental analysis

   a short rise in commodity futures prices within a general declining trend. Such a rally may result from bargain hunting by market participants or because technical analysts have noticed a particular support level at which the commodity price is expected to increase.

   a significant short-term trend identified through technical analysis of a commodity’s price movement.

   the time to maturity of an asset, liability, trade, transaction or portfolio.

   1,000 gigawatts (1 trillion watts).

   1,000 gigawatt hours.

   the imperial unit of measurement for a quantity of gas, equivalent to 100,000 British thermal units.

   option risk parameter that measures the speed of time decay of the option premium.

   where the owner of a pipeline or electricity network is obliged to transport gas, crude or electricity in a non-discriminatory way – i.e., for any third party at the same rate as all other users. Third-party access can either be regulated by a separate agency or law, or negotiated between the incumbent and the new entrant. Also called common carriage.

   the minimum price movement of a financial contract, expressed in fractions of a point.

   charter party agreement for a fixed period of time instead of for a certain number of voyages. In this type of agreement usually loading and unloading costs are not included in the charter rate.

    see theta

   part of the option premium that reflects the excess over the option’s intrinsic value, or the entire premium, if there is no intrinsic value. At given price levels, the option’s time value will decline until expiration.

   a virtual trading point for natural gas in the Netherlands, created in 2003 by Gasunie in order to facilitate trading in the Dutch market.

   tonnes of oil equivalent.

   The exchange that regulates trading of futures contracts and option products of all commodities in Japan. Since July 1999, this exchange has listed yen-based gasoline and kerosene futures based on the Japanese market.

   a processing agreement for the conversion of an input product for a fee. In the energy sector, tolling agreements are contracts where one party – the toller – provides a company with one form of fuel to be converted into another form of fuel on their behalf. In particular, in the liquefied natural gas (LNG) industry, tolling is a common method for financing liquefaction plants or regasification terminals. In the former case the tollers are natural gas owners who wish to convert their natural gas into LNG for transportation and storage purposes, in the latter, the tollers are LNG owners who wish their LNG to be converted into gas for distribution into the relevant end-market. In the electric power market, tolling agreements are typically between a power buyer and a power generator, under which the buyer supplies the fuel and receives an amount of power generated based on an assumed heat rate at an agreed cost.

   a unit of measure that represents the measurement of mass equal to 1,000 kilograms, or 2204.6226 pounds.

    see third-party access

   used in tandem with hedging, this activity involves selling more production or buying back more volumes than are currently hedged.

   liquefied natural gas production units; liquefaction facilities.

   US industry jargon for transmission facilities, or for a company engaged almost exclusively in the provision of transmission service.

   equipment used to deliver power at high voltages in bulk quantity, from generating facilities to local distribution facilities, for final retail use. see also distribution

   a by-product of refined petroleum products pipeline operations. Transmix of refined petroleum products is created by the mixing (co-mingling) of different specification products during pipeline transportation.

   the capacity of the UK natural gas system, which is assessed by the National Grid in three places: 1) The entry capacity at the entry to the national transmission system (NTS). 2) The exit capacity at the NTS offtakes. 3) Local distribution zone (LDZ) capacity within the LDZs.

   the payout of path-dependent options, such as barrier options and digital options, depends on a specified market variable satisfying a specific trigger condition. The most common condition is that the spot rate (or price) of the underlying must trade through a specified level before the option becomes active (or inactive), but many other types of condition are possible. see also corridor option, range binary