05.07.2009

LNG terminals work with low storage to throughput ratios compared with an oil terminal. The reason for the low storage levels is the cost of building LNG tanks, which are the most expensive part of a conventional terminal and take upwards of three years to construct. Because of the expense of the tanks, most terminals designed for throughput up to 5 mtpa will be constructed with only two tanks – each of which will have roughly the same capacity of an LNG ship (approx. 130,000 – 160,000 cubic meters). Although it is possible to operate a terminal with only one tank, the logistics of this require very reliable delivery and offtake

Standards required for a particular LNG installation facility, which can differ depending on the type of siting (e.g. onshore versus offshore, etc.)

Location on which an LNG facility is to be constructed. Can be onshore or offshore

Production and export capacity of LNG has increased but not as fast as demand. In addition, there have many delays and cancellation of LNG projects mainly because of increasing construction costs, higher steel costs, difficulties to access sufficient sources of natural gas and geopolitical reasons

The use of credit or borrowed funds to improve one’s speculative capacity and increase the rate of return from an investment, as in buying securities on margin

In Israel, a Lease is granted to the license holder, if oil has been discovered in commercial quantities. The lease maximum period is 50 years. The royalty paid for oil and gas is 12.5%

Japan is the largest world LNG importer, followed by South Korea and then Spain. In 2007 LNG global trade stood at 226.4 bcm. LNG’s share of world natural gas trading rose to 25%. Japan, South Korea and Spain are known as the “big three” importers of LNG

Diversion of LNG cargoes destined for one market place to a higher priced market, such as the diversion of LNG from Oman destined for the Spanish market and shipped instead to the higher paying Asian market. Under certain circumstances the original consumer has even been approached with a request to agree to forfeit their deal and split the extra profit from the Asia deal with the supplier >

A market in which selling or buying can be accomplished with minimal price change. A market is said to be ‘liquid’ when it has a high level of trading activity and open interest