Risk Management LNG Contract Review and Consultancy
As world leaders in the field of LNG trading, SGS provides a range of services to the LNG industry to support new contracts and project development.
In addition to reviewing any new contracts through our comprehensive Sales and Purchase Agreement (SPA) review process, we also offer consultancy services to ensure the highest accuracy of sampling systems and compositional monitoring and can provide tailored custody transfer training.
Sales and Purchase Agreement review
We will conduct a review to:
- Verify that the SPA is in line with the terminal set-up, ensuring that the terminal can comply with the requirements as agreed between buyer and seller
- Verify that all measurement, testing and calculation undertaken is in line with latest international (industry accepted) standards
- Verify that the calculation section is complete and that full calculation can be done on the basis of complete information
- Identify your final results against all the other calculation possibilities, due to the different norms/standards through which final energy calculation can be made
We will undertake a full audit of the drawings and of the system in place to identify and rectify any potential issues during the start-up phase.
Composition change monitoring
Due to the instability of LNG, the molecular composition of a particular cargo will change during transport. Once loaded on board a vessel, the components with the lowest boiling points, nitrogen and methane, will evaporate first. As a result of this natural “boil off” process, the change in composition produces a new Gross Heating Value (GHV) and Density, thus altering the value of the LNG itself.
SGS has developed a database to monitor the changes in quantity and quality of LNG during transport. By entering the LNG data from the load and discharge ports for each voyage, we can identify trends and predict compositional changes based on experience. Our database currently holds data on several thousand operations out of several load and discharge ports. All client information that we hold is treated as confidential.
This database is not only used to predict the expected composition at the discharge port, but has also proved useful in showing the correctness of the sampling and analysis at the load port, the recalculation of the Density and GHV according to different norms and reference temperatures and the comparison of the performance of different vessels within a client’s fleet.
In cases where the main and/or backup sampling systems failed, or where the results were questioned and not in line with the expectations, we have been asked by our customers to create a simulation based on historical data to help resolve disputes. Our database can also be used to identify or confirm whether the sampling system in the load or discharge port has failed.
Custody transfer training for your staff
We can design tailor-made training in custody transfer for you and your personnel as required.
Find out more about LNG contract review and consultancy services from SGS.