05.07.2009

Issues regarding sellers failure to deliver nominated quantities of gas. If underliveries were due to FM, then the buyer’s ToP obligation will be reduced by the amount of gas that the seller failed to deliver. If seller cannot claim FM, then the buyer can also impose sanctions for damages caused or demand that the under-delivery be classified as shortfall gas. Shorfall of gas is a seller’s default. If a natural gas seller, on a day, fails to provide the quantity of sales gas nominated by the Buyers and providing that the reason is not the fault of the Buyer or of the Sellers’ Force Majeure or Political Force Majeure effecting any Party, then the Buyer shall be entitled to a quantity of Sales Gas during the next [x] Years equal to the difference between the quantity of Sales Gas properly nominated by the Buyer (excluding for the avoidance of doubt Excess Gas) and the amount actually delivered by the Sellers (the Shortfall Quantity). The Shortfall Quantity will be supplied at a price equal to the prevailing price in the year in which it is supplied times [x%] (the Shortfall Price). Usually a buyer will want to give a seller no more than a 2% operating tolerance as the norm. A buyer should also try to get near to 80% of the Contract Price for the Shortfall Price.

The UIOLI method are not easy to draft, since storage of course mixes the gas of a number of different players and the spot gas that is stored based on the UIOLI method is mixed also with gas that is ordered based on long term contracts.

What is special about uranium? Some atoms are so unstable that they can split, or fission, thereby releasing energy. Some atoms need only a nudge from a neutron to fission. They are called “fissile”. In nature, there is only one fissile isotope, uranium-235. This makes uranium unique among the chemical elements. Uranium ore is mined and refined into a yellow colored solid uranium compound referred to as “yellow cake”. The yellow cake is converted into various uranium metal alloys or compounds to be used as nuclear fuel What is the composition of natural uranium? Uranium in nature has three isotopes. Only 0.72 percent of uranium isotopes is the fissile isotope, uranium-235. Most uranium, 99.2745 percent, is uranium-238. The rest, 0.0055 percent, is uranium-234. Uranium-238 and uranium-234 are not fissile, but they are still valuable. They are called “fertile,” which are atoms that become fissile when they absorb or capture a neutron. Uranium-234 absorbs a neutron and turns into uranium-235. Uranium-238 absorbs a neutron and eventually turns into plutonium-239, which is fissile but not found in nature. What is enriched uranium? The amount of uranium-235 compared to uranium-238 determines how energetic nuclear fuel is. Natural uranium is not energetic enough to use as fuel in light water reactors; it cannot sustain fission reactions. Instead, such reactors need uranium with a higher fraction of uranium-235 than is found in nature, which is called “enriched”. Light water reactors use fuel that is generally three to five percent uranium-235. When used in current nuclear power plants, one uranium pellet the size of the tip of your little finger is equivalent to the energy provided by 1,780 pounds of coal, 17,000 cubic feet of natural gas, or 149 gallons of oil. One ton of uranium produces the same energy as between 10,000 tons and 16,000 tons of oil. Some of the added advantages of uranium is that it comes from diverse sources with the main suppliers operating in politically stable countries which supplies potentially available for hundreds of years. In addition, the high density of uranium means that transport is less vulnerable to disruption and storage than is the case with fossil fuels.

Upstream (exploration and production), midstream (processing and transportation) and downstream (refining and marketing) operations.

Three component sectors define the global oil and gas industry: upstream, midstream, and downstream:

1. Upstream segment of natural gas business – Exploration and Production (E&P) – The E&P cycle includes exploration, appraisal, development, production and abandonment. This phase includes exploration, development, production and marketing of natural gas. Everything from acquiring the seismic data (acquisition, processing and interpretation thereof), processing other data such as well logs, core analysis, integrating all the data, carrying out appraisals, making reserves estimations and chances of success, making decision as to drill or not to drill exploration well, carrying out drilling with the appropri9ate rig, to the phase of development of the field which includes to safely and economically install the appropriate facilities to produce the hydrocarbons discovered in the field.

2. Midstream segment of natural gas business – This is the link between the exploration and production of natural gas or oil and its consumption by end-users. It consists of natural gas gathering, processing, storage and transportation of Petroleum (crude oil, natural gas, LNG). The transportation is done via the construction and operation of high pressure transmission systems and low pressure distribution networks and/or Liquefied Natural Gas facilities (liquefaction, shipping and regasification). The processing phases includes the process of converting the raw fluids from the wellbore into sales quality hydrocarbons and wastes. The process includes inter alia issues such as separators (separates oil, gas and water): compressors (increases pressure to drive the gas); dehydration (removes water from gas); metering (measures volumes/energy of the gas); slug catcher (entry separator designed to cope with surges of fluids). The Transmission and Distribution (T&D) section includes high pressure transmission system and low pressure distribution network pipelines to supply natural gas to the end consumer

3. Downstream segment of the oil and gas business – refers to the refining of crude oil and the Sale & Marketing of natural gas and products derived from the refining of crude oil to end consumers. The end consumers include mostly the gas fired power generation plants and/or industrial and commercial consumers

Thus we have:
Exploration and production
Processing
Transmission and Distribution
LNG
End-Users

The exploration and production portions of the oil and gas industry.

A well located high on a structure where the oil-bearing formation is found at a shallower depth

Located up the slope of a dipping plane or surface. In a dipping (not flat-lying) hydrocarbon reservoir that contains gas, oil and water, the gas is updip, the gas-oil contact is downdip from the gas, and the oil-water contact is still farther downdip