ON GAS SUPPLY TO OTHERS

A CLIENT ONLY NEEDS 60 % OF WHAT HE ASKS. Examples are not difficult to

name. In countries with long gas supply histories it is not that bad.

Ensure that a "TAKE OR PAY" clause in the gas supply contract guarantees the supplier a minimum income.

Be aware of the fact that the condensate production associated with the gas production is proportional with the gas production. THEREFORE 60% GAS MEANS (roughly) ALSO 60% CONDENSATE. As the condensate often contributes significantly to the economic robustness of a project and as a take or pay clause does not cover loss of condensate income, the effect of the "60% rule" can be dramatic. Where this happens always a "GAS CYCLING" project is proposed, many are subsequently ruled out again but some have paid out rapidly.

The LOAD-FACTOR is very important as the MAXIMUM INSTANTANEOUS requirement determines the SIZE of the facilities while the AVERAGE YEARLY OFFTAKE rules your ECONOMICS.

LINE-PACK is a magic word but it is only of significance if the gas pipeline is too large for the flow of the moment and/or when there is a fluctuating off-take.

Being the supplier make sure that    Y O U    MAKE THE FIRST DRAFT OF THE GAS SUPPLY CONTRACT. Let the client try to change YOUR wording rather than the other way around.

The CLIENT ALWAYS WANTS THE CLEANEST GAS in the world. As a negotiator for the company get yourself well informed on what the real requirements of the client ought to be and let him know you know before he comes with his unrealistic demands for CO2 and H2S content,Wobbe-index range, hydrocarbon dew-point, pressure, temperature etc. If he has genuine demands tell him the extra price for conditioning the gas so he can consider to treat in-house (as LNG plants do for CO2, H2S ,Mercury, heavy hydrocarbons etc).